The recovery in the price of gold added extra lustre to the full-year results of pawnbroker H&T GROUP PLC (LON:HAT).
The group had advised the market back in January to expect some sparkling numbers, and so it proved, with profit before tax up 42.6% in 2016 to £9.7mln from £6.8mln the year before.
The market had pencilled in a figure of £8.94mln for pre-tax profit.
WATCH: H&T boss on a "Golden Year" ...
The higher gold price resulted in increased gross profits of £6.0mln (2015: £2.4m) from H&T’s Gold Purchasing and Pawnbroking Scrap activities.
The average gold price during 2016 was £926 per troy ounce (2015: £759), a 22.1% increase.
Underlying earnings, or EBITDA, climbed 22.4% to £13.1mln from £10.7mln the year before on revenue that rose to £94.22mln from £89.23mln in 2015.
The market had expected revenue of £91.9mln.
The Pawnbroking business’s revenue was flat year-on-year at £23.38mln, though the average worth of the pledge book during the year stood at £39.1mln, 4.7% higher than in 2015.
The Retail business’s sales grew 3.4% to £30.5mln from £29.5mln the year before, with the group especially pleased with the year-on-year improvement in the second half of the year in terms of increases in inventory, gross profits and margins.
Revenue from personal loans increased 45.8% to £3.5mln from £2.4mln the year before, with the year-end loan book weighing in at £9.4mln, up from £4.2mln the year before.
Subject to shareholder approval, a final dividend of 5.3p will be paid, compared to last year’s final divi of 4.5p. The final dividend will take the full-year pay-out to 9p, up from 8p last year and ahead of the market consensus forecast of 8.83p.
“We are particularly pleased with the growth in our loan books and the increasing significance of FX and Buyback,” said John Nichols, chief executive of H&T Group.
H&T has recently branched out into foreign exchange (FX), while the Buyback service, which is particularly popular with the younger crowd trading in their electronic gizmos as they upgrade to the latest generation of products, is going great guns, with volume up 41.7% year-on-year to £8.5mln.
“High street pawnbroking remains challenging and only those companies that can adapt to the new consumer and regulatory landscape will succeed. We believe that H&T has a robust business model capable of delivering a range of products to our customers in a responsible way. We have demonstrated our ability to develop new revenue streams and are well placed to succeed as the market continues to evolve,” Nichols said.