H&T Group - 186p

In the recent past we have highlighted Albemarle & Bond as an attractive company to invest in. We remain keen on the shares for the reasons highlighted previously and little has changed with that particular business. However, there is also another pawnbroking business listed on AIM, H&T Group, and given the current economic situation these shares are worth consideration.

The company’s trading statement released in January was upbeat and expansion continues. Retail turnover increased in the second half of 2008 and there was even progress made in a very tough December for the High Street.

Scrap activity has also been buoyant, with strength in the price of gold being helpful. All these factors point to continuing strength,.

In terms of full year figures, 2008 is expected to show a significant increase on 2007. According to the trading statement in January, 2008 was a record year in terms of new store openings, revenue growth and profit.

In the full year 2007 profit before tax and exceptional items came in at £7.2 million and basic earnings per share jumped from 3.65p the previous year to 15.17p.

A final dividend of 3.4p was declared, giving a total of 5p for 2007 versus 3p in 2006. Further improvement is anticipated, which means that the shares trade on a modest multiple of earnings and also offer a progressive dividend, albeit not providing the best yield in the market at this stage.

Although it has to be said that the company is benefiting from the tough economic climate, the business is not merely a play on lean times. Whilst there are still some negative stereotypes attached to pawnbroking, much work is being done to improve the industry’s image and H&T Group has been benefiting from this.

Full year results from H&T Group are expected on March 20 and this may well see the company receive some attention.

On balance, anyone wishing to invest in a smaller company at this stage could certainly benefit from picking up a few shares ahead of the results.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.