H&T Group: Never mind the gold price ... look to personal loans for growth at H&T

Yesterday's profits upgrade from pawnbroker H&T GROUP PLC (LON:HAT) was welcome, but not unexpected, according to finnCap. The pawnbroking and small loans specialist said full-year profits would be above market expectations, thanks in large part to the rise in the price of gold. The broker, which rates the shares a 'buy', thinks the company's profits will get a £1.2mln boost from the resurgence in the price of the yellow stuff, but says the H&T story is not really about gold. "The real story is how the growth of the personal loans business will play out over the next few years. Increasing the [personal loans] book by £2mln since the interim to £8mln is useful for 2016 but extrapolated beyond could prove transformational for the group in terms of lending growth given that the pawnbroking pledge book is holding at £40mln," the broker said. Stay tuned for more information at the time of the full-year results, finnCap advises.