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(Alliance News) - H&T Group PLC said Monday its annual profit is likely to reach "the top end" of market expectations thanks to a strong second half and good performances from newly acquired businesses.
Shares in H&T were up 5.3% at 384.45 pence in London in morning trading.
The pawnbroker, which has its headquarters in Surrey, said it expects its 2019 pretax profit "to be at the top end of current market expectations". This was attributed to "solid trading" from its two recent acquisitions. Those acquisitions are Money Shop, announced July of last year, and Speedloan, announced in October 2018.
Another factor in profit growth was "strong second half-year trading". H&T's core estate performance improved by 25%, or GBP13 million, thanks to increased lending to new customers and organic transaction growth.
On top of this, H&T's year-ending pledge book was 39% higher than the previous year, an increase of GBP20 million from GBP52.0 million at the end of 2018.
Jewellery retail sales increased 7% year-on-year, including 5% growth from core stores. Foreign exchange also generated higher income, H&T said, with group foreign exchange income up 45% and core store foreign exchange income 20% higher. Precious metal scrappage produced "strong returns" thanks to an increase in the price of gold.
Further, the company saw reduced impairment charges on unsecured lending.
As announced back in November, H&T is working with the UK Financial Conduct Authority, as well as "industry experts", as it undertakes a review of H&T's "high-cost short-term-credit unsecured loans business". This includes reviewing files from the business.
Chief Executive John Nichols said: "We have made good progress in delivering our strategic goals in the past year, particularly in consolidating the pawnbroking industry by acquiring trading sites and pledge book purchases. I am delighted with progress to date regarding the operational integration of these trading sites and assets with financial performance meeting expectations. We continue to develop our digital strategy complementing our enlarged store estate."
Nichols added: "The group's momentum over recent years demonstrates the success of our strategy to access new customers and markets. Demand for our products remains strong and we look to the future with confidence."
By Anna Farley; annafarley@alliancenews.com
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