Numis cuts rating on H&T Group to 'hold' from 'add'

The company posted 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.

Numis said H&T has delivered a “positive set” of first half results, underpinned by a “stable pledge book and progress in buyback, foreign exchange, and personal loans, augmented by the favourable gold price”.

“H&T is successfully diversifying revenue streams and building its business despite a challenging core pawnbroking market,” Numis said.

“We are encouraged by the stability in the pledge book and the clear progress being made in FX, Buyback and, most interestingly, Personal Loan. However, the shares have had a strong run (+57% last six months) and we see more limited upside at this level.”

Numis raised its full year 2016 pre-tax profit forecast from £8.0m to £8.7m, reflecting a broadly flat outturn in pawnbroking and retail, gold-price-led gains in scrap and gold purchasing, and further progress in buyback, foreign exchange and personal loans, partly offset by investments in people and systems.

Shares fell 1.66% to 295.52p at 1056 BST.