H&T reports fall in first half profits
Pawnbroker H&T has reported a pre-tax profit of £2 million in the first half of its financial year compared to a profit of £4.6 million in the same period last year.
H&T said the fall was mainly the result of reduced profits from its pawnbroking scrap and gold purchasing operations.
In the six months to 30 June, the group’s pledge book decreased by 20.8% to £38.5 million.
However, retail sales grew by 49.3% with gross profit up 20.9% on the prior year after the group improved its retail proposition through investment in store stock, a revised pricing strategy and selected promotional activity. Like-for-like sales increased by 50%.
Having trialled a discount second hand jewellery proposition in a small number of underperforming stores in the second half of 2013, the group says it has refined the concept in 2014 with the development of the ‘est1897’ brand which has been extended to a total of 36 stores. The new concept will be supported by a fully transactional website to be launched in the third quarter of 2014.
H&T closed four stores in the period and opened one, resulting in 191 trading units at 30 June 2014. A small number of stores are expected to close during the remainder of the year.
Total direct and administration costs reduced from £21.9 million to £19.8 million, £0.6 million of which related to discontinued goldbar operations.
In the second half of 2014, the group plans to launch personal loans, jewellery retail and pawnbroking online as it looks to provide a consistent web and online offering, and use the new channel to introduce more customers to its services.
John Nichols, H&T chief executive, said: "Despite the intense competitive environment and the fall in the gold price, the group has delivered a robust performance for the first half and we expect the 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.
“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."
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