15th Oct 2013 10:22
LONDON (Alliance News) - H&T Group PLC Tuesday said its trading continues to be in line with market expectations for full-year pretax profit.
The pawnbroker and payday lender said it faces lower returns in the short term as a result of the increased competitive environment and the reduced gold price, as it previously announced.
As a result, it said its focus is now on retail optimisation as opposed to greenfield store expansion, and this has led to significantly increased retail sales, a reduction in net debt, and the successful launch of ancillary products.
H&T said it could yet benefit from opportunities arising from the struggles faced by the alternative credit industry as a whole.
Payday lenders are set to become regulated by the UK's Financial Conduct Authority, which has said it will impose stricter regulations on the industry when it takes over regulation next year.
H&T said its retail operation has been a key focus in the second half of 2013, with the retail sale of jewellery providing the company with a degree of hedging against a drop in the price of gold.
It said its August like-for-like sales in retail were up 13%, a percentage which increased to 27% in September and is being so far maintained in October.
This compares to a first half like-for-like retail sales fall of 12%.
H&T also said the rollout of its new unsecured product to replace its payday advance product was a success, which drove an increase in its KwikLoan loan book to GBP2.5 million, compared to GBP2.2 million on June 30.
The company also expects to decrease its cost base for 2013 and is launching initiatives to reduce its balance sheet's risk and reduce net debt.
H&T shares were Tuesday quoted at 146.0 pence, up 5.38 pence, or 3.8%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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