TIDMHAT
RNS Number : 5575Y
H&T Group PLC
17 January 2022
17 January 2022
H&T Group plc
("H&T" or "the Group" or "the company")
Trading Update and Notice of Results
H&T Group plc ("H&T or the "Group"), the UK's leading
pawnbroker, today announces an update in respect of recent trading
performance following the financial year ended 31 December
2021.
The company's priority in 2021 was to focus on its core
pawnbroking and retail sales business, rebuilding the pledgebook as
borrowing demand returned and maximising retail sales and other
opportunities once Covid-19-related trading restrictions were
lifted in April.
Following the update provided at the time of publication of the
Group's interim results on 9 August, trading performance during the
second half remained consistently strong and the Group expects to
report profit before tax for the full year within the range of
current market expectations*.
Highlights include:
-- Demand for pledge lending has now fully recovered to
pre-pandemic levels, with positive momentum across the customer
spectrum and in all geographies. The months of November and
December saw particularly strong borrowing demand, with lending
volumes in December ahead of expectations and at record levels.
Loan-to-value ratios have been maintained. Redemption rates remain
stable and above historic norms.
-- As at the end of December, the pledge book had grown to
GBP67m, an increase of 39% over the prior year and up 34% since
June 2021.
-- Retail sales have continued to remain robust, with
consistently strong demand for high quality pre-owned watches and
jewellery both online and in H&T's store network. The important
Christmas trading period was particularly successful, and sales
both of new and pre-owned items exceeded expectations. Overall,
retail sales for 2021 were up 21% on 2020, at improved margins.
Retail performance in the second half of 2021 showed full recovery
to pre-pandemic levels, with both sales and margins slightly above
2019 comparators.
-- Gold purchase and foreign exchange transaction volumes
improved in the fourth quarter and were in line with management
expectations but remain below pre-pandemic levels. Money transfer
and cheque cashing volumes were in line with management
expectations.
-- The personal loan book continues to reduce with repayments,
recoveries, and lower impairment charges more than offsetting new
lending. The book had reduced to GBP2.6m as at 31 December.
The Group had cash balances of GBP17m as at 31 December and its
funding facilities of GBP35m remain undrawn. These facilities have
recently been renewed and extended, and now comprise a GBP15m
revolving credit facility maturing in December 2024 and a GBP20m
overdraft facility. The revised structure is aligned with the
anticipated funding needs of the business.
The company continues to work closely with the FCA and the
appointed skilled person in respect of a review of lending
processes, creditworthiness and affordability assessments
undertaken within the Group's unsecured high cost short term
("HCST") loans business. A methodology for conducting the required
past book review has been developed in close collaboration with the
skilled person. Following initial review by the FCA, "outcomes
testing" was undertaken by the skilled person. This work is under
review by the FCA, and a conclusion to their review is anticipated
in the near term. H&T will update the market further as soon as
it is able to do so.
H&T expects to report its preliminary results for the year
ended 31 December 2021 on 8 March 2022.
Chris Gillespie, chief executive of H&T, said:
"The Group has performed consistently well through the second
half of 2021 and I am particularly pleased by the strong demand for
our pawnbroking loans. We have seen higher month-on-month lending
levels in each successive month since May, with a full return
during the fourth quarter to pre-pandemic lending volumes and very
positive momentum as we move into 2022.
"The impact on trading of the enhanced Covid-19 restrictions
announced during December 2021 across England, Scotland, and Wales,
has thus far been limited. Lending volumes and retail sales
remained strong up until the Christmas break and this has continued
into January.
"Despite higher levels of employee absence due to Covid-19
related self-isolation and illness, our 257 stores have remained
open, and service levels have been maintained across the business.
However, we remain cautious about future trading conditions and
inflationary pressures as the pandemic continues to evolve, and our
priority will always be the safety of our customers and
colleagues.
"Our employees right across the Group provide outstanding levels
of customer service. They are - and will remain - the key strength
of our business. We are investing in modernising and improving our
technology platforms to enable customers to transact with us more
easily and to support our employees to enhance customer service
even further. We look forward to updating more fully on our
progress when we present our 2021 results on 8(th) March."
Ends
* Analysts' estimates of profit before taxation for the
financial year ended 31 December 2021 range from GBP9.0m to
GBP10.1m.
Enquiries:
H&T Group plc
Tel: 020 8225 2797
Chris Gillespie, Chief Executive
Shore Capital Ltd (Nominated Adviser and Broker)
Tel: 020 7408 4090
Stephane Auton/Iain Sexton (Corporate Advisory)
Guy Wiehahn/ Chloë Booker-Triolo (Corporate Broking)
Haggie Partners (Public Relations)
Tel: 020 7562 4444
Damian Beeley
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