H&T Group PLC (AIM:HAT) has proposed hiking its dividend 41% after reporting full-year profits in line with expectations and saying that strong trading has continued into the new year.
The pawnbroking group proposed a final dividend of 8p per share, meaning the total pay-out will be 12p compared to 8.5p a year ago.
Adjusted profit before tax of £10.0mln was reported for the 2021 calendar year, compared to £15.6mln in 2020, which the company said was in line with expectations.
The pawnbroking pledge book increased 38.5% to £66.9mln at year-end, with demand for pledge lending fully recovered to pre-pandemic levels after strong lending volumes in December.
After the year began with a period of strict pandemic-related measures until April, which depressed high street footfall, chief executive Chris Gillespie said the primary strategic aim of the business during the year “was to rebuild the core pawnbroking pledge book, which had reduced by a third in 2020 as customers chose to repay their loans at a time of reduced need for credit”.
“It is very pleasing to report strong growth in borrowing demand in the second half of 2021 with no detriment to loan-to-value ratios, record levels of lending in December and an increase in the flow of pawnbroking customers who are new to H&T. This momentum has continued into 2022.”
In-store demand for new and pre-owned jewellery and watches has returned “strongly and consistently”, while online sales grew 40.5%, with both retail businesses being supported by increased marketing activity.
“We have made significant progress with, and continue to prioritise, investment both in our store estate and technology infrastructure, as we work to improve our customers' journey in store and online. We have opened five stores and relocated two in the past 12 months, with more in the pipeline for 2022 as we seek to broaden our reach still further,” Gillespie said.
He also flagged that the regulatory review of the group’s high-cost short-term lending business by the Financial Conduct Authority has seen “positive progress”.
Anticipating an early conclusion to this review, H&T has raised a provision of £2.1mln which represents a best estimate of the expected cost of the customer redress programme.
Looking to trading in 2022, the group sees the trading environment in the near term being positive for its business, with continued strong demand anticipate for pawnbroking from the impact of inflation on the consumer, while the war in Ukraine has led to an increase in the value of gold.