H&T Group PLC (AIM:HAT) announced a 42.6% increase in profits for the first six months, underpinned by its core pawnbroking business and a return in demand for gold and foreign currency.
The UK's largest pawnbroker, which was founded 125 years ago, achieved pre-tax profit of £6.7mln in the first half to 30 June 2022, compared with £4.7mln in the same period last year, on revenue of £77.7mln, up from £52mln.
The core pawnbroking business saw 27% growth in the pledge book to £85.1mln, with demand for pledge lending remaining at record levels.
Customers' need to access small sums of short-term credit comes at a time of reduced market supply after the departure of several firms from the unsecured lending market, H&T noted, adding that lending volumes are now more than 40% above pre-pandemic levels.
Meanwhile, retail sales jumped to £20.8mln in the first half from 12.4mln last year on rising demand for pre-owned jewellery and watches.
Gold purchasing and rising demand for foreign currency as travel recovers drove an increase in income from other services to £9.4mln from £8.3mln.
H&T forecast that demand for its services will continue to grow in the months ahead.
“We anticipate continued strong demand for our core pawnbroking product as the impact of inflation on the consumer increases the need for small sum, short term loans at a time when supply of credit is more constrained than has been the case for many years,” it said.
The company said the £4.3mln acquisition of Swiss Time Services during the period will add watch repair services to its product offering, which “aligns well” with its broader watch strategy.
It opened four stores during the first half and added a further store in July with three more opening in August, bringing the total number of stores to 265.
Further openings are planned for the remainder of the year and beyond, it said.
It has started to roll out the new Point of Sale (POS) system in its stores, with full roll-out expected to be completed before the year-end.
The company upped its interim dividend to 5p from 4p.
Net debt stood at £8.6mln at end-June, compared with net cash of £17.6mln on 31 December 2021.