Pawnbroker H & T Group (LON:HAT) expects to deliver full-year results in line with expectations, despite the continued weakness of the gold price.
In a trading update covering the first half of 2015, the company said it believes the steps taken over the last two years to mitigate the effects of the slumping value of gold position the company well to prosper when market conditions improve,
As at the end of June, net debt had shrunk to £8.9mln from £13.5mln a year earlier, and with the balance sheet looking a lot healthier H & T said the focus has now shifted to achieving revenue growth.
The pawnbroking business's pledge book at at the end of June was £37.4mln, versus £38.5mln a year earlier. The modest reduction put down to improved redemption rates which, combined with the increase in interest rates in December 2013, has improved the yield and resulted in a small increase in income interest year-on-year (YOY).
Retail has performed well with sales and gross profits up YOY. Recently established products in the retail offering have shown encouraging growth, contributing to a growth in the Personal Loan book to £3.4mln at the half-year point, from £2.6mln the year before.
Activity on both Buyback and FX has more than doubled since the first half of 2014, the company said.
The group closed one store in the first half of the year and expects a few more will fall by the wayside during the rest of the year as leases come up for renewal.
H & T said it expects its competitors will also be reducing the size of their estates, and that it is “well positioned to take advantage of this changing marketplace as and when opportunities arise”.