19th Aug 2014 07:51
LONDON (Alliance News) - H&T Group PLC Tuesday said its first half pretax profit fell by more than half, primarily due to reduced profits from its pawnbroking scrap and gold purchasing operations.
In a statement, H&T said it made a GBP2.0 million pretax profit in the six months ended June 30, compared with GBP4.6 million in the corresponding period last year.
Revenue fell to GBP43.9 million from GBP50.5 million. Total direct and administration costs fell to GBP19.8 million from GBP21.9 million, with GBP600,000 of that saving relating to its discontinued GoldBar operations. Net debt fell to GBP13.5 million from GBP28.5 million, as the group focuses on reducing its borrowing levels.
H&T maintained its interim dividend at 2.1 pence.
H&T said current trading is in line with its expectations, and Chief Executive John Nichols said the group expects full-year results to be in line with market expectations.
"Our focus on delivering excellent service in our bright and welcoming stores continues, with strong progress made in the development of personal loans and lending on other asset types," Nichols said in a statement.
"We have dedicated, professional people delivering great service with the right range of products and are well placed to take advantage of the developments we expect in the market," the CEO added.
The pawnbroker has been battling against the fall in the price of gold and tougher restrictions on pay day lending imposed by the Financial Conduct Authority since taking responsibility for regulating UK consumer credit back in April. H&T said that it has responded by making cost reductions and focusing on jewellery retail to support earnings in the short-term, as it looks to realign the business by focusing on service, products and distribution.
The company said it thinks that demand for small sum, short-term cash loans remains strong, which is why it wants to increase the range of assets it accepts, expand personal loans, and develop its online services as it looks to grow in the next two years.
Having expanded other services including its new personal loan, FX and Buyback, H&T said it will launch personal loans, jewellery retail and pawnbroking online in the second half. The pawnbroker said it wants to ensure consistency across its online and in-store channels.
H&T said it closed four stores in the year and opened one, meaning it had 191 trading units at the end of June. However, it expects a small number of stores to close in the remainder of the year, due to the current trading environment.
Shortly after the market open, H&T shares were Tuesday untraded at 166.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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