Shares in H&T (HAT:AIM) were down over 17% to 329p in morning trading despite the UK’s biggest pawnbroker reporting a ‘robust’ performance in the fourth quarter of the year.

Aggregate lending in 2023 amounted to £260 million, an increase of 19% compared to £218 million in 2022.

As of 31 December 2023, the pledge book amounted to circa £131 million, up 30% on the 31 December 2022 balance of circa £101 million.

Weakness in the shares had a knock-on effect on peer Ramsdens Holdings (RFX:AIM) which dropped 4% in sympathy.

On 15 January Ramsdens also flagged tough festive trading.

WHY ARE THE SHARES DOWN?

The company said pre-tax profits for the year are expected to be approximately 10% below current market forecasts due to challenging retail trading conditions in the peak pre-Christmas period, particularly in December due to ‘pressure on customers’ disposable income.’

Slower then expected progress in foreign currency also had a knock-on effect for H&T pre-tax profits for the year.

Shore Capital analyst Gary Greenwood remained upbeat despite it being a challenging year for H&T saying there was ‘continued strong momentum in pawnbroking.’

‘H&T is well-positioned to deliver good earnings and dividend growth over the medium-term, given strong underlying demand for pawnbroking services,’ said Greenwood.

Greenwood has downgraded his earnings per share estimates for 2023, 2024 and 2025 by 10%, 8% and 10% respectively.

Volatile pre-and post-Christmas trading hits Watches of Switzerland

WATCHES OF SWITZERLAND WARNING

Today's warning from H&T comes hot on the heels of a similar warning from watch retailer Watches of Switzerland (WOSG) which recently revised its full year 2024 guidance downwards after volatile pre- and post-Christmas trading citing a slowdown in consumer demand for luxury items due to the cost-of-living crisis.

The luxury watch-to-high end jewellery retailer shares fell 30% on the news and are down 58% over the past year.

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