Source - LSE Regulatory
RNS Number : 9262H
H&T Group PLC
09 August 2021
 

9 August 2021

H&T Group plc

("H&T" or "the Group" or "the Company")

 

UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

H&T Group plc today announces its interim results for the six months ended 30 June 2021.

 

HIGHLIGHTS

·    Profit before tax £4.7m (H1 2020: £5.0m), a robust performance against a background of Covid-19 related trading restrictions from January to April and reduced high street footfall throughout the period

·    Daily average pledge lending back to c.90% of pre-pandemic levels, recovering strongly with continuing month on month momentum

·    Pledge book up 3.9% to £50.2m as at June (Dec 2020: £48.3m)

·    Retail sales up 26.5% to £12.4m (June 2020: £9.8m) at improved margins. Retail gross profit up 139.3% to £6.7m (H1 2020 £2.8m)

·    Cash balances £32.5m (June 2020 £12.9m net)

·    Net Assets up £9.0m to £135.9m (H1 2020: £126.9m)

·    Interim dividend increased to 4.0p (H1 2020: 2.5p)

 

Chris Gillespie, H&T chief executive, said:

 

"H&T has traded strongly since April's progressive relaxation of the pandemic restrictions. Pledge lending is steadily returning to normal levels and demand for our value for money, high quality jewellery and watches has been particularly strong.

 

"Right across the business, our colleagues have done an amazing job throughout the pandemic, ensuring we meet customers' needs whether in stores, over the telephone or increasingly, online. Both our websites are now refreshed, and we continue to invest in improving our IT systems to better support colleagues, and in expanding our reach and appeal across all appropriate channels for our customers.

 

"The positive trading momentum seen in the second quarter has continued in the third quarter with further growth in the pledge book to £52.2m as at 31 July 2021. We enter the second half of the financial year with growing confidence."

 

Financial highlights (£m unless stated)





6 months ended 30 June

2021

2020

Change %

FY2020






EBITDA (Note 3)

£9.6m

£9.6m

0.0%

£26.2m

Operating profit

£5.2m

£5.5m

(5.5%)

£16.9m

Profit before tax

£4.7m

£5.0m

(6%)

£15.6m

Diluted EPS (p)

9.3p

10.2p

(8.8%)

32.1p

Dividend per share

4.0p

2.5p

60.0%

8.5p






Key performance indicators





Net Pledge Book (including accrued interest)

£50.2m

£56.3m

(10.8%)

£48.3m

Pawnbroking revenue less impairment (Note 2)

£18.5m

£16.9m

10.1%

£34.2m

Retail sales

£12.4m

£9.8m

26.5%

£29.8m

Retail gross profits

£6.7m

£2.8m

139.3%

£11.3m

Personal loan book

£3.4m

£10.0m

(66%)

£5.9m

Net assets

£135.9m

£126.9m

7.1%

£134.5m

Number of stores

254

251


253

 

Enquiries:

H&T Group plc

Tel: 0870 9022 600

Chris Gillespie, chief executive

c.gillespie@handt.co.uk

        

Numis Securities (broker and nominated adviser)     

Tel: 020 7260 1000

Luke Bordewich, nominated adviser

 

Haggie Partners (financial public relations)                                                                                       

Office:

Tel:

020 7562 4444 (messaging service)

Damian Beeley:

Mob:

07950 481795

Ben Abbotts:

Mob:

07973 353241 

 

 

INTERIM REPORT

 

Introduction

 

During the lock-down period from January to April 2021, we were able to keep all but two of our stores open, offering pawnbroking and other financial services to continue to support our customers during these challenging times. We were unable to provide our retail sales offering through stores because of the restrictions applying to non-essential retail businesses. Jewellery and watch sales were offered via online channels, supported by a click and collect option from stores.

 

Between January and April our stores operated reduced trading hours, reflecting low levels of footfall and reduced demand for borrowing, and we made use of flexible furlough arrangements put in place by the Government. Furlough support received amounted to £1.3m and has been shown in the accounts as "Other Income" (see note 2). We topped up the earnings of affected employees in full, and all had returned to normal working by May.

 

Since the relaxation of Covid-19 restrictions across the UK during April the trading performance of the business has recovered strongly. Daily average pledge lending is already back to around 90% of pre-pandemic levels with some stores starting to show higher levels of lending than before Covid-19, reflecting a gradual but steady return of demand for borrowing. Retail sales have been particularly strong at improved margins, outperforming consistently across all categories since April, with watch sales in particular showing high demand.

 

We are very much on track with our priorities for the remainder of 2021 to rebuild pledge lending to pre-pandemic levels while continuing to invest in our online and stores based retail offering.

 

Financial Results

 

The Group has reported profit before tax of £4.7m, down 6% on the prior year (H1 2020: £5.0m), reflecting the impact of the trading restrictions under which the business operated from January to April and significantly reduced footfall. This was followed by a strong recovery in trading performance during May and June, and which continued into July.

 

H&T operated reduced opening hours in the period January to April and implemented flexible furlough arrangements. The Group received £1.3m Government support in relation to these arrangements.

 

Total direct and administrative expenses reduced 5.6% to £30.1m (H1 2020 £31.9m), reflecting careful management of expenditure, and reduced transactional costs during the trading restrictions of January to April.

 

The Group's balance sheet is strong with net assets of £135.9m, no debt and cash balances amounting to £32.5m, along with an undrawn revolving credit facility of £35m. This places the Group in an excellent position to take advantage of growth opportunities as Covid-19 restrictions are relaxed and Government support to individuals and businesses in the form of furlough and other support schemes begins to be progressively withdrawn. This is expected to contribute to the return of demand for credit to normalised levels.

 

Dividend

 

The Board has approved an increased interim dividend of 4.0pence (2019 interim: 2.5pence) per share, reflecting the positive trading momentum of the business. The Board intends to return dividend distributions to historic levels as soon as trading returns consistently to pre-pandemic levels. See Note 9 to the accounts. 

 

Review of Operations

 

Pawnbroking

 

Pawnbroking is the core business of H&T and recovering pledge lending to at least pre-pandemic levels is a key priority for the remainder of 2021 and beyond.

 

Pledge balances at June 2021 stood at £50.2m. The book had been broadly flat at around £48m since August 2020, and the June 2021 balance of £50.2m represents growth of 3.9% since December 2020, all of which occurred in the months of May and June. Daily average pledge lending has shown week on week and month on month improvements since mid-April and as at the end of June had recovered to c.90% of pre-pandemic levels. 

 

The recovery of lending demand has not been uniform across the customer spectrum, with many self-employed and business owning customers continuing to benefit from Covid-19 related Government support. By way of illustration, the daily average volume of pledge lending in the 70 stores acquired by the Group in 2019 and which have proportionately fewer such customers, has now fully recovered and is slightly above pre-pandemic levels.

 

Average pledge loan value across the business remains at c. £320. Annualised risk adjusted margin (RAM) for the period was 73.9% (H1 2020: 57.1.%), reflecting a revised book composition. RAM is expected to moderate as borrowing demand returns across the full customer spectrum and book composition reverts to pre-pandemic norms. RAM in 2020 was impacted by the temporary closure of all stores from March to May 2020 and the suspension of the charging of interest to customers during that period. 

 

Alongside renewed growth in the pledgebook, annualised redemption rates are ahead of normal levels. This reflects a higher propensity of customers to repay their existing loans from cash resources built up over the pandemic period, and reduced borrowing demand.

 

Pawnbroking is our core business. We continue to invest in our online capabilities to better support our pawnbroking operations and we are investigating ways to broaden our appeal and geographic reach. One new store was opened in the period with one more opening and one relocation in July, two more new stores are due to open in August, and we have a number of store openings and relocations in the pipeline. We also intend to test further ways in which pawnbroking customers can interact with us without necessarily having to visit a store.

 

Pawnbroking Summary

 

6 Months ended 30 June

2021

2020

FY2020


£m

£m

£m

Period end net pledge book - Note 1

50.2

56.3

48.3

Average net pledge book

48.6

68.9

58.9

Revenue less impairment

18.5

16.8

34.2

Risk adjusted margin - Note 2

73.9%

57.1%

58.1%

Notes:




1.     Includes accrued interest and impairment.

2.     Net Revenue expressed on an annualised basis as a percentage of average net pledge book.

 

Pawnbroking Scrap

 

The average gold price during the period was broadly flat at £1,301 per Troy ounce (H1 2020: £1,306). As at 30 June 2021, the price was £1,274 (30th June 2020: £1,440). 

 

The gold price directly affects margins earned on sales of scrapped gold. Further, the reduction in the size of the pledge book coupled with higher redemption rates has reduced the volume of gold which, having failed to sell at auction, was subsequently sent for scrap processing.

 

No auctions were undertaken from December to April due to pandemic restrictions. Customers whose pledge had become aged during lockdown, were given further time to redeem their items or make alternative arrangements such as a payment plan. No further interest was charged for this period of additional forbearance. Auctions were undertaken during May and June and the backlog was cleared by period end.

 

During the period, the gross value of scrap sales reduced 22.4% to £5.2m (H1 2020: £6.7m) and a combination of product mix, timing of auctions and gold price fluctuations reduced gross profits from the exceptionally high levels seen in H1 2020, to £1.0m (H1 2020: £2.0m).

 

Retail

 

The Group was unable to offer retail jewellery for sale in its stores during the period January to April because of Covid-19 trading restrictions. During this period, we continued to sell via our online websites and a click and collect service from our stores. Retail sales during Q1 - generated overwhelmingly online - were at approximately 25% of normalised pre-pandemic levels. 

 

Since the relaxation of restrictions progressively during April, retail sales have significantly outperformed in terms of volume, value and margins. Online originated sales in May and June have grown in line with overall sales levels, and currently represent approximately 16% of total sales by value (H1 2020: 16%).

 

Retail sales for the period overall were up 26.5% to £12.4m (H1 2020: £9.8m), generating gross profits of £6.7m (H1 2020: £2.8m). Strong demand in particular for high quality watches enabled us to release provisions held in accordance with our normal accounting policy, against previously slow-moving stock items. Headline gross margin of 54% (H1 2020: 28%) reflects this dynamic. Underlying gross margin excluding provision movements was 46% (H1 2020: 41%), reflecting both business mix and strong demand for high quality pre-owned watches and jewellery. 

 

Sales of new items in the period were broadly flat at £1.6m, representing 13% of overall retail sales (H1 2020: 17%). Lack of growth in this category primarily reflects supply related issues caused by Covid-19 disruption within supply chains and significantly lengthened delivery lead times from overseas suppliers. This has been addressed through changes to our ordering processes.

 

Stock holding of retail jewellery and watches at period end was £28.1m (H1 2020: £27.3m).

 

Gold Purchasing 

 

Gold purchasing profits reduced 53.6% to £1.3m (H1 2020: £2.8m) on sales of £8.0m (H1 2020: £9.6m), a reduction of 16.7% and primarily reflecting reduced transaction volumes from January to April 2021. At 16%, the margin on purchased gold has moderated back closer to historic norms after the positive impact in 2020 of a higher gold price (H1 2020: 29%, H1 2019: 17%).

 

Personal Loans

 

The net personal loans book reduced significantly to £3.4m (H1 2020: £10.0m) in line with our plans. Other than a small sample of loans written as part of the s.166 review, no High Cost Short Term ("HCST") loans were written in the period. Non-HSCT lending continues at modest levels, with £1.0m lent during the period (H1 2020: £3.3m).

 

The increase in annualised risk adjusted margin to 106.9% (H1 2020: 61.8%) reflects the ongoing collect out of the book and reversal of impairment charges under IFRS9 accounting, together with further tightening of credit risk and affordability assessments.

 

Personal Loan Summary

 


2021

2020

FY2020

6 Months ended - 30 June

£m

£m

£m

Period end net loan book

£3.4

£10.0

£5.9

Average net loan book

£4.3

£13.1

£10.2

Revenue

£1.7

£6.4

£9.8

Impairment

£0.7

(£2.1)

(£1.7)

Revenue add/less impairment

£2.4

£4.3

£8.1

Risk Adjusted Margin - Note 1

106.9%

61.8%

79.4%

Note 1 - Net Revenue expressed on an annualised basis as a percentage of average net loan book

 

                                                               

Other Services and Other Revenue

 

Other Services comprises trading activities in respect of foreign currency exchange (FX), money transfer, and cheque cashing. A buy-back product was previously offered, but was withdrawn in Q1 2020.

 

Overall, net revenue from Other Services was broadly flat at £2.3m (H1 2020 £2.4m).

 

FX profit reduced to £1.0m (H1 2020: £1.3m). Transaction volumes were down 56% and aggregate transaction value reduced by 45%. Transaction volumes in the period were at c23% of pre-pandemic levels with signs of a modest recovery during May and June. We expect this recovery to continue as foreign travel begins to re-open over the summer.

 

Money transfer revenues grew to £0.8m (H1 2020: £0.3m) on transaction volumes up 66% to 226k (H1 2020: 136k), considerably above pre-pandemic levels. Money transfer, although not significantly profitable in its own right, is a key driver of footfall into our stores.

 

Cheque cashing revenue was broadly flat at £0.4m on reduced volumes, reflecting a systemic decline in cheque usage which has accelerated during the pandemic.

 

Other Income primarily represents funds received from the Government support in the form of the furlough job retention scheme, amounting to £1.3m in the period (H1 2020: £3.5m).

 

Regulation - FCA s.166 Review

 

As previously advised, the Group has been working with the Financial Conduct Authority (FCA) to undertake via a skilled person, a review of the credit worthiness, affordability assessments and lending process within its High Cost Short Term loan (HCST) business since 2014.

 

A methodology for conducting the required past book review has been developed in close collaboration with the skilled person. This methodology is under review by the FCA, following which a process of testing will be undertaken by the skilled person before the methodology and implementation approach can be finalised.

 

Further updates will be provided in due course although it is not currently possible to put a timescale on completion of the review by the FCA, nor completion of the subsequent testing work by the skilled person.

 

Strategy and Outlook

 

The Group's core business is pawnbroking, supported by a strong new and pre-owned jewellery and watches franchise - both online and through our store network - and a range of financial services tailored to the needs of the communities we serve.

 

Our Pawnbroking Customers are usually seeking to borrow a relatively modest sum - typically less than £500 - over a short term. The withdrawal of a number of non-standard lenders from the lending market creates a growth opportunity for pawnbroking, and an opportunity for H&T in particular as the clear market leader. We are investing in broadening our reach and modernising our appeal to new and returning customers across all appropriate channels by further extending our store network, improving our fulfilment and product delivery infrastructure, and upgrading our digital and social media capabilities.

 

The business has positive trading momentum and a strong, debt free balance sheet. The momentum seen in May and June has continued into the third quarter, with further growth in the pledge book to £52.2m as at 31 July. Retail sales continue to outperform and we have seen a recent increase in FX volumes as overseas travel begins to recover.

 

Notwithstanding the ongoing uncertainties presented by the Covid - 19 pandemic, the Board believes there are highly attractive growth opportunities for the Group, including the potential for further market consolidation, and we view the future with optimism and excitement.

 

 

Interim Condensed Financial Statements

 

Unaudited statement of comprehensive income

For the 6 months ended 30 June 2021



6 months

ended 30 June 2021

6 months

ended 30 June 2020

12 months

ended 31 December 2020


Note

Total

Total

Total



Unaudited

Unaudited




£'000

£'000

£'000






Revenue

2

51,929

55,830

129,115

Cost of sales


(16,619)

(18,478)

(46,316)



________

________

________

 

Gross profit

 

2

35,310

37,352

82,799






Other direct expenses


(21,190)

(21,567)

(50,188)

Administrative expenses


(8,917)

(10,324)

(15,727)



________

________

________

 

Operating profit

 

3

5,203

5,461

16,884






Investment revenue


-

-

5

Finance costs

5

(549)

(446)

(1,257)



________

________

________

 

Profit before taxation


4,654

5,015

15,632






Tax on profit

6

(1,015)

(1,132)

(3,070)



________

________

________

 

Total comprehensive income for the period


3,639

3,883

12,562



________

________

________








Pence

Pence

 Pence






Earnings per ordinary share - basic

7

9.29

10.21

32.11

Earnings per ordinary share - diluted

7

9.29

10.20

32.11






 

All results derive from continuing operations.

 

 

Unaudited condensed consolidated statement of changes in equity

For the 6 months ended 30 June 2021

 

 


Note

6 months ended

30 June
2021

6 months ended

30 June
2020

12 months ended

31 December

2020



Unaudited

Unaudited

Audited



£'000

£'000

£'000






Opening total equity


134,549

122,606

122,606






Total comprehensive income for the period


3,639

3,883

12,562

Issue of share capital


-

313

313

Share option movement taken directly to equity


120

102

64

Dividends paid

9

(2,392)

-

 (996)



 

 

 

Closing total equity


135,916

126,904

134,549



 

 

 

 

 

Unaudited condensed consolidated balance sheet

At 30 June 2021



At 30 June

2021

At 30 June

2020

At 31 December

2020



Unaudited

Unaudited



Note

£'000

£'000

£'000

Non-current assets





Goodwill


19,330

19,330

19,330

Other intangible assets


2,229

3,264

2,729

Property, plant and equipment


9,721

7,595

8,635

Deferred tax assets


2,749

2,184

2,822

Right-of-use assets


18,311

18,689

18,337



 

 

 



52,340

51,062

51,853

Current assets





Inventories


28,159

27,306

27,564

Trade and other receivables


55,951

68,809

55,751

Other current assets


-

38

1

Cash and cash equivalents


32,493

13,938

34,453



 

 

 



116,603

110,091

117,769



 

 

 

Total assets


168,943

161,153

169,622



 

 

 

Current liabilities





Trade and other payables


(10,266)

(8,842)

(10,807)

Lease liability


(3,260)

(5,708)

(3,568)

Current tax liabilities


(919)

(890)

(1,972)



 

 

 



(14,445)

(15,440)

(16,347)



 

 

 

Net current assets


102,158

94,651

101,422



 

 

 

Non-current liabilities





Borrowings

4

-

(1,000)

-

Lease liability


(16,909)

(16,298)

(17,077)

Provisions


(1,673)

(1,511)

(1,649)



 

 

 



(18,582)

(18,809)

(18,726)



 

 

 

Total liabilities


(33,027)

(34,249)

(35,073)



 

 

 

Net assets


135,916

126,904

134,549



 

 

 






EQUITY





Share capital

8

1,993

1,993

1,993

Share premium account


33,486

33,486

33,486

Employee Benefit Trust share reserve


(35)

(35)

(35)

Retained earnings


100,472

91,460

99,105



 

 

 

Total equity attributable to equity holders of the parent


135,916

126,904

134,549



 

 

 

 

 

Unaudited condensed consolidated cash flow statement

For the 6 months ended 30 June 2021


 

Note

6 months ended

30 June

2021

6 months ended

30 June

2020

12 months ended

31 December

2020



Unaudited

Unaudited




£'000

£'000

£'000

Cash flows from operating activities





Profit for the period


3,639

3,883

12,562

Adjustments for:





Investment revenue


-

-

(5)

Finance costs


549

446

1,257

Increase in provisions


24

21

160

Income tax expense


1,015

1,132

3,070

Depreciation of property, plant and equipment


1,250

1,097

2,204

Depreciation of right-of-use assets


2,517

2,239

5,122

Amortisation of intangible assets


655

785

1,428

Right of use asset impairment


-

-

531

Loss on disposal of property, plant and equipment


11

92

99

Share based payment expense


134

69

(35)



 

 

 

Operating cash flows before movements in working capital


9,794

9,764

26,393






(Increase)/Decrease in inventories


(595)

1,851

1,679

Decrease in other current assets


1

676

713

(Increase)/Decrease in receivables


(200)

22,022

35,200

(Decrease) in payables


(917)

(3,734)

(3,842)



 

 

 

Cash generated from operations


8,083

30,579

60,143






Income taxes paid


(2,010)

(2,279)

(3,707)

Interest paid on loan facility


(170)

(259)

(350)

Interest paid on lease liability


(502)

(108)

(736)



 

 

 

Net cash generated from operating activities


5,401

27,933

55,350



 

 

 

Investing activities





Interest received


-

-

5

Purchases of intangible assets


(155)

(160)

(233)

Purchases of property, plant and equipment

(2,325)

(1,037)

(3,005)

Purchase of right-of-use assets

(2,489)

(365)

(2,934)

Acquisition of trade and assets of business

-

251

(50)


 

 

 

Net cash used in investing activities

(4,969)

(1,311)

(6,217)


 

 

Financing activities




Dividends paid       

9

(2,392)

-

(996)

(Decrease) in borrowings

-

(25,000)

(26,000)

Proceeds on Issue of shares

-

313

313


 

 

 

Net cash used in financing activities

(2,392)

(24,687)

(26,683)


 

 

 

Net (decrease)/increase in cash and cash equivalents

(1,960)

1,935

22,450





Cash and cash equivalents at beginning of period

34,453

12,003

12,003


 

 

 

Cash and cash equivalents at end of period

13,938

34,453


 

 

 

 

 

 

Unaudited notes to the condensed interim financial statements

For the 6 months ended 30 June 2021

 

Note 1 Basis of preparation


The interim financial statements of the Group for the six months ended 30 June 2021, which are unaudited, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the Group and set out in the annual report and accounts for the year ended 31 December 2020. The Group does not anticipate any change in these accounting policies for the year ended 31 December 2021. As permitted, this interim report has been prepared in accordance with the AIM rules but not in accordance with IAS 34 "Interim financial reporting". While the financial figures included in this preliminary interim earnings announcement have been computed in accordance with IFRSs applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in the interim report also does not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006. The financial information for the year ended 31 December 2020 is based on the statutory accounts for the year ended 31 December 2020. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The Board have conducted an extensive review of forecast earnings and cash over the next twelve months, considering various scenarios and sensitivities given the Covid‐19 situation and uncertainty around the future economic environment. The Board have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim condensed financial statements.

 

 

Unaudited notes to the condensed interim financial statements

For the 6 months ended 30 June 2021

 

Note 2 Segmental Reporting

 

2021

Revenue

Pawnbroking

£'000

Gold

purchasing

£'000

Retail

£'000

Pawnbroking scrap

£'000

Personal

Loans

£'000

Other

Services

£'000

Other

Income

£'000

Consolidated

for the 6 months ended

30 June 2021

£'000










External revenue

20,949

7,995

12,438

5,240

1,715

2,322

1,270

51,929


 

 

 

 

 

 

 

 

Total revenue

20,949

7,995

12,438

5,240

1,715

2,322

1,270

51,929


 

 

 

 

 

 

 

 

Gross profit

20,949

1,319

6,718

1,017

1,715

2,322

1,270

35,310


 

 

 

 

 

 

 

 

Impairment

(2,414)

-

-

-

681

-

-

(1,733)


 

 

 

 

 

 

 

 

Segment result

18,535

1,319

6,718

1,017

2,396

2,322

1,270

33,577


 

 

 

 

 

 

 

 

Other direct expenses excluding impairment


(19,457)

Administrative expenses

(8,917)


 

Operating profit

5,203

Finance costs

(549)


 

Profit before taxation

4,654

Tax charge on profit

(1,015)


 

Profit for the financial year and total comprehensive income

3,639


 

 

 

 

2020

Revenue

Pawnbroking

£'000

Gold

purchasing

£'000

Retail

£'000

Pawnbroking

scrap

£'000

Personal

Loans

£'000

Other

Services

£'000

Other

Income

£'000

Consolidated

for the 6 months ended

30 June 2020

£'000










External revenue

17,399

9,607

9,768

6,698

6,426

2,434

3,498

55,830


 

 

 

 

 

 

 

 

Total revenue

17,399

9,607

9,768

6,698

6,426

2,434

3,498

55,830


 

 

 

 

 

 

 

 

Gross profit

17,399

2,831

         2,775

1,989

6,426

2,434

3,498

37,352


 

 

 

 

 

 

 

 

Impairment

(642)

-

-

-

(2,147)

-

-

(2,789)


 

 

 

 

 

 

 

 

Segment result

16,757

2,831

2,775

1,989

4,279

2,434

3,498

34,563


 

 

 

 

 

 

 

 

Other direct expenses excluding impairment





(18,778)

Administrative expenses





(10,324)






 

Operating profit





5,461

Finance costs





(446)






 

Profit before taxation





5,015

Tax charge on profit





(1,132)






 

Profit for the financial year and total comprehensive income





3,883






 

 

 

Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2021

 

Note 2 Segmental Reporting (continued)

 

 

2020

Revenue

 

Pawnbroking

£'000

Gold

purchasing

£'000

Retail

£'000

Pawnbroking scrap

£'000

Personal

Loans

£'000

Other

Services

£'000

Other

Income

£'000

For the year

ended 2020

£'000


 

 

 

 







External revenue

38,970

21,508

29,827

19,249

9,781

6,014

3,766

129,115

 

 

 

 

 

 

 

 

 

 

Total revenue

38,970

21,508

29,827

19,249

9,781

6,014

3,766

129,115

 

 

 

 

 

 

 

 

 

 

Gross profit

38,970

6,802

11,303

6,163

9,781

6,014

82,799

 

 

 

 

 

 

 

 

 

 

Impairment

(4,763)

-

-

-

(1,675)

-

-

(6,438)

 

 

 

 

 

 

 

 

 

 

Segment result

34,207

6,802

11,303

6,163

8,106

6,014

3,766

76,361


 

 

 

 

 

 

 

 

Other direct expenses excluding impairment





(43,750)

Administrative expenses





(15,727)






 

Operating profit





16,884

Interest receivable





5

Finance costs





(1,257)






 

Profit before taxation





15,632

Tax charge on profit





(3,070)






 

Profit for the financial year and total comprehensive income




12,562






 

 

 

Note 3 Operating profit and EBITDA

EBITDA

 

The Board consider EBITDA to be a key performance measure as the Group borrowing facility includes a number of loan covenants based on it.

 

EBITDA is defined as Earnings Before Interest, Taxation, Depreciation and Amortisation. It is calculated by adding back depreciation and amortisation to the operating profit as follows:

 

6 months ended 30 June 2021

Unaudited

6 months ended

 30 June

 2021

Unaudited

6 months ended

 30 June

 2020

Unaudited

12 months ended

 31 December 2020

Audited


Total

Total

Total


£'000

£'000

£'000

Operating profit

5,203

5,461

16,884

Depreciation and amortisation

1,905

1,882

3,633

Depreciation of right-of-use assets

2,516

2,239

5,122

Impairment of the right-of-use-assets

-

-

531


 

 

 

EBITDA

9,624

9,582

26,170


 

 

 

 

Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2021

 

Note 4 Borrowings

 


6 months ended

 30 June

2021

6 months ended

 30 June

2020

12 months ended

 31 December

 2020


Unaudited

Unaudited

Audited


£'000

£'000

£'000









Long term portion of bank loan

-

26,000

26,000

Cash flows

-

(25,000)

(26,000)





Amount due for settlement after more than one year

--

1,000

-









 

Note 5 Finance costs


6 months ended

 30 June

 2021

6 months ended

 30 June

 2020

12 months ended

 31 December

 2020


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Interest payable on bank loans and overdraft

(10)

280

404

Other interest

-

-

1

Amortisation of debt issue costs

58

58

117

Interest on expense on the lease liability

501

108

735


 

 

 

Total finance costs

549

446

1,257


 

 

 

 

 

Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2021

 

Note 6 Tax on profit

 

The taxation charge for the 6 months ended 30 June 2021 has been calculated by reference to the expected effective corporation tax and deferred tax rates for the full financial year to end on 31 December 2021. The underlying effective full year tax charge is expected to be 19% (six months ended 30 June 2020: 19%).

 

 

Note 7 Earnings per share

Basic earnings per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period.

 

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. With respect to the Group these represent share options granted to employees where the exercise price is less than the average market price of the company's ordinary shares during the period.

 

Reconciliations of the earnings per ordinary share and weighted average number of shares used in the calculations are set out below:

 

 


Unaudited

Unaudited



6 months ended 30 June 2021

6 months ended 30 June 2020

12 months ended 31 December 2020


                                                              

                                                                

                                                                


Earnings

£'000

Weighted average number of shares

Per-share amount pence

Earnings

£'000

Weighted average number of shares

Per-share amount pence

Earnings

£'000

Weighted average number of shares

Per-share amount pence











Earnings per share -

basic

3,639

39,162,612

9.29

3,883

38,039,328

10.21

12,562

39,124,959

32.11











Effect of dilutive securities










Options

-

-

-

-

18,201

(0.01)

-

1,278

(0.00)


 

 

 

 

 

 

 

 

 

Earnings per share diluted

3,639

39,162,612

9.29

3,883

38,057,529

10.20

12,562

39,126,237

32.11


 

 

 

 

 

 

 

 

 

 

 

Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2021

 

Note 8 Share capital

 

 


At

 30 June 2021

At

30 June 2020

At

31 December 2020


Unaudited

Unaudited

Audited

Allotted, called up and fully paid

(Ordinary Shares of £0.05 each)




£'000 Sterling

1,993

1,993

1,993


 

 

 

Number

39,864,077

39,864,077

39,864,077


 

 

 

 

 

Note 9 Dividends

 

On 5 August 2021, the directors approved a 4 pence interim dividend (30 June 2020 Interim: 2.5 pence) which equates to a dividend payment of £1,595,000 (30 June 2020 Interim: £997,000). The dividend will be paid on 1 October 2021 to shareholders on the share register at the close of business on 5 September 2021 and has not been provided for in the 2021 interim results. The shares will be marked ex-dividend on 3 September 2021.

 

Note 10 Contingent Liabilities

 

As set out in the market release issued on 18th November 2019 by H&T Group plc , we are working with a skilled person subsequently appointed in conjunction with the FCA in September 2020 on a past-book review of our lending since April 2014 within the High Cost Short Term unsecured lending (HCSTC) market. At this stage, under the criteria in IAS 37 Provisions, Contingent Liabilities and Contingent Assets it is possible that a liability may exist, but H&T is currently unable to estimate the quantum of any such possible liability.

 

 

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