LONDON (ShareCast) - (ShareCast News) - Pawnbroker company H&T Group reported on Tuesday a 42.3% rise in first half pre-tax profit to £3.7m, supported by a strong operational performance and an increase in gold prices.
Retail sales climbed 1.5% to £13.6m and gross profits were flat at £4.8m in the six months to 30 June. Although, during the first half the company closed one Discount Secondhand Jewellery store as it was unable to secure satisfactory lease terms.

The pledge book increased to £39m from £37.4m the same period a year ago as a result of the development of a new distribution channel for pawnbroking services and a slight increase in the aged pledge.

Gold purchasing profits increased to £1.5m from £1.0m as the average price of gold edged up to £852 from £791m the prior year. However, H&T said the impact of an increase in gold price to purchasing profits is "relatively short lived" as there is a delay between purchasing the yellow metal and realising the value through the market.

The group's personal loan product, in-store and online, jumped 25% to £1.5m. The offering allows for loans of up to £2,500 over any term of up to three years, based on affordability.

Net debt was reduced by 22.5% to £6.9m. The interim dividend was raised to 3.9p from 3.5p.

"This is a promising start to the year in the face of challenging trading conditions, with a strong operational performance aided by favourable market conditions around the gold price," said chief executive John Nichols.

Amid challenging trading conditions, the company closed three stores in the first half. H&T said it continues to assess underperforming stores and anticipates a small number of closures in the second half.

"By increasing the range of assets the group accepts, by expanding Personal Loans and expanding our online services we will be ideally positioned to grow as the market adjusts in the future," the firm said in a statement.

H&T said trading is in line with management's expectations. If the recent increases in gold price are sustained, it will benefit the group in the remainder of the year, the company added.

Shares dipped 0.45% to 299.15p.

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