H&T says full-year profits will be in line with expectations despite slump in gold price
H&T Group has said it expects its full year pre-tax profits in the year to 31 December to be in line with expectations despite its business being impacted by a sharp fall in gold prices.
In a trading statement issued today, the pawnbroker said the 29% reduction in gold price during the year had resulted in reduced earnings for the business from both gold purchasing and pawnbroking scrap. It had also put pressure on lending rates as the group sought to maintain its loan to value ratio.
H&T said it had responded to the challenging trading environment by suspending its new store opening programme, measured cost reductions and a focus on driving retail sales to reduce the exposure to gold price on disposition.
The cost savings resulted in lower operating costs for 2013 and this reduction is expected to continue into 2014.
H&T said it had benefited from its continued presence in the retail jewellery market with like-for-like sales in the fourth quarter up 56% on the prior year and gross profit up 18%. This compares to a like-for-like sales fall of 12% in the first half of the financial year.
The company’s pledge book dropped by 14.5% to £44.1 million at the year-end principally as a result of a competitive environment and reduced lending rates.
H&T said it plans to close a small number of non-contributing stores in 2014 while looking to acquire profitable pawnbroking opportunities.
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