18th Aug 2015 06:57
LONDON (Alliance News) - Pawnbroker H&T Group PLC on Tuesday said it will raise its interim dividend 67% following an improved performance against a challenging market backdrop in the first half, with pretax profit rising and the group's net debt position falling.
H&T, which operates the H&T Pawnbrokers and est1897 brands, said its pretax profit in the first half was up to GBP2.6 million from GBP2.0 million a year earlier, prompting it to hike its interim dividend to 3.5 pence per share from 2.1p a year earlier. The group also saw its net debt fall 34% in the half to GBP8.9 million.
The improvement in profit was driven by stabilised pawnbroking income in the half and by growth in H&T's retail, personal loans and other services, driven by investments the group has made across the business. The group's pledge book fell 2.9% in the half to GBP37.4 million from GBP38.5 million, but the company said its improved pricing and discounting strategy meant its retail profit grew and said improvements in its personal loan systems and underwriting operations had a similar effect.
In total, revenue for the group was down to GBP40.8 million from GBP43.8 million, but gross margin improved substantially, with cost of sales falling to GBP17.9 million from GBP22.0 million to offset the revenue fall.
"We are pleased with the improved performance and ongoing development of the group in the first half of the year. The trading environment remains challenging although the competitive landscape is now easing with the continued closure of competitors' stores," said John Nichols, H&T's chief executive.
"Fluctuations in the gold price inevitably impact the group's financial performance. Our evolving business model, with a strong focus on the development of our retail offering as well as the broadening of our other product offerings and services, is helping us to mitigate the impact of gold price volatility. Allowing for the recent reduction in gold price, we currently expect the full year results to be broadly in line with current market expectations," Nichols added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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