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Pawnbroker soars on gold boost

The rocketing gold price sent pawnbroker H&T Group‘s shares soaring this morning, after it said it would beat forecasts on the back of the precious metal’s strength.

Disclosing half-year numbers, H&T said: “The outlook remains positive and on the basis of the current gold price we are pleased to announce our expectation for full year results to be above the top end of current market forecasts.”

H&T now has 45 “Gold Bar” units – which buy unwanted gold from consumers. Gold purchasing profits were £7.5m for the first half of 2011, a quarter of the group’s gross profits.

Its pre-tax profits for the first half were however down on the previous year, falling to £10.9m from £16.9 for the same period last year.

H&T shares were up almost 9% to 400p by 9:30.

The gold price itself broke through ,900 an ounce this morning, with sellers demanding ,912.84 an ounce at one stage, before it fell back to ,883 by 9:30.

Investors were buying again for a second day running, with the FTSE 100 up 1.3%, or 66 points, to 5,162.

G4S was the biggest riser among the FTSE 100, after the security group’s half-year numbers showed turnover up 5% and profits before interest, tax and amortisation up 3%.

Caroline de La Soujeole of Seymour Pierce said:

Organic growth has accelerated in most regions and business sectors in 1H11A, a trend which is expected to continue into the second half. In addition, G4S has a strong pipeline of M&A opportunities. In 1H11, £42m was spent on acquisitions and we expect this to pick up in the second half of the year with anticipated total spend of £200m. Our FY11E top of the range forecasts remain unchanged (adj PBT of £468m and adj EPS of 23.6p/consensus £448m/adj EPS 22.6p). The shares are trading on a prospective P/E of 10.3x compared with a through the cycle average of 14.6x. This is not expensive for a business expected to deliver double digit CAGR over the medium term. We are confident that the operational and geographic diversity of G4S will enable the company to continue to outperform.

The shares rose 6.6% to 260p.

Car dealership Pendragon meanwhile reported profits before tax up 13% as it bore down on costs.

Nick Bubb at Arden Partners said:

The star segmental performance was in Used Cars, with market leading +13% unit sales growth, driving the recovery in the volume car division of Evans Halshaw and the overall 20 bps pick-up in group EBIT margin to 2.4%. The performance of the premium car division Stratstone’s was held back by timing issues related to autumn new model launches, but the important business in California is trading well and some of the Support businesses, eg Leasing, did well in H1. The indication is that September pre-orders for new cars are in line with budget and with last year.

Pendragon looks very cheap at this rock-bottom level against its peers, on less than 5x earnings, and it is highly geared to the future recovery in the UK car market.

The shares rose 2% to 9.84p. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds