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H&T Group (AIM:HAT) - positive update and shares look decent value at current levels

21/06/2012 · H&T Group (HAT) 

The trading update from ‘the other’ quoted UK pawnbroker ahead of the half-year to end June 2012 indicates that it sees full year profits in line with expectations – expectations are pre-tax of £16.5m and eps of 33.05p. A full year commitment before the half year end is about as good as it gets, especially after last week’s profit warning from Albemarle & Bond!

The core pawnbroking operations continue to perform strongly, with the Group due to report double digit year-on-year growth in its pledge book and largest income stream, the Pawn Service Charge.

The Group’s gold purchasing operation has experienced competitive pressure on margins (much like Albemarle), but the underlying volumes have remained constant over the last 12 months.

Year to date retail sales are up 7% reflecting the new store additions and the continued focus on retail as the preferred and most profitable route to disposition. Year to date like-for-like sales are down 11% on prior year, while profit margins have been maintained .
A further 14 stores have been added year to date, including 2 acquisitions and the conversion of 2 GoldBar retail mall units into fully fitted stores. Today, the Group’s estate consists of 174 stores and 55 GoldBar units.

Trading at 8.3x 2012 estimates and yielding just over 4% the shares look decent value at current…

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