H&T is bolstered by pawnbroking as more people seek quick loans
Pawnbrokers chain H&T has reported higher profits as it said more people were looking for alternative ways to source a small loan amid a lack of short-term credit options.
The company, which has more than 280 shops across the UK, also benefited from increased demand for foreign currency and stronger gold prices.
It reported a pre-tax profit of £9.9 million for the six months to the end of June, 12.5% higher than the same period a year ago.
This was largely driven by an increase in pledge lending, which grew by 14% to £146 million year on year.
The service enables people to take out a loan against the value of a piece of jewellery, a watch or a handbag.
Borrowers pay an annual interest rate of 165.5% on the loan, and if the loan is not repaid then their pawned item is sold to pay the debt.
H&T said strong demand for pawnbroking was partly due to wider economic conditions as well as a shortage of regulated small-sum, short-term credit.
Customers have been repaying their loans more quickly than usual, H&T said, but this behaviour has started to slow.
Meanwhile, the company, which also sells jewellery and watches, was bolstered by a 27% jump in retail sales.
This was helped by higher prices and improved sales for some watch brands which had recently been impacted by volatile prices.
It also benefited from increased demand for foreign currency and swelling profits earned from buying and selling gold.
It came as the average gold price per troy ounce during the period was £1,742, up from £1,566 the prior year, H&T said.
Chris Gillespie, H&T’s chief executive, said: “Our core pawnbroking business continues to attract increasing numbers of new and returning customers, for whom alternative sources of small sum regulated lending are much constrained.”
He said the business was focused on growing the pawnbroking division and investing in its chain of stores.
