H&T Group (LON:HAT) has been in the pawnbroking business for more than a century and is winning the battle against Johnny-come-lately competitors, interim results show.
The company, which grew profits on reduced revenue, said that while the trading environment remains challenging, “the competitive landscape is now easing with the continued closure of competitors' stores.”
Profit before tax in the first half of the year rose 30% to £2.6mln from £2.0mln in the first half of last year, driven by the stabilisation of pawnbroking income and growth in retail, personal loans and other services.
The company, like others in the pawnbroking business, remains a hostage to fortune when it comes to the price of gold, but it has made a concerted effort to broaden its product offerings and services, and this is paying off.
“Allowing for the recent reduction in gold price, we currently expect the full year results to be broadly in line with current market expectations,” according to John Nichols, chief executive of H&T Group.
Half-year revenues declined to £40.8mln from £43.82mln the year before, with the pledge book reducing to £37.4mln from £38.4mln a year earlier, as a result of the competitive environment, improved redemption and a reduction in aged pledges.
Retail sales increased by 1.5% to £13.4mln from £13.2mln and gross profits of the retail estate increased by 9.1% to £4.8mln from £4.4mln, with the improvement due to the introduction of the est1897 Discount Secondhand Jewellers brand and improved margins in H&T stores.
The group believes that the demand for small sum, short term cash loans remains strong and by increasing the range of assets it accepts, by expanding personal loans and other services both in-store and online, it will be ideally positioned to grow as the market adjusts in the next year.
Shares in H&T Group were up 1.4% at 198.65p in a falling market in the first hour of trading.