H&T Group PLC (AIM:HAT) reported a 42.6% increase in profit for the first six months, supported by its core pawnbroking business and a return in demand for gold and foreign exchange.
The UK’s largest pawnbroker, founded 125 years ago, made a pre-tax profit of £6.7m in the first half to June 30, 2022, from £4.7m in the same period last year, on revenue of £77.7m, up from £52m.
The core pawnbroking business saw pawn book growth of 27% to £85.1m as demand for pawnbrokers remained at record levels.
Customers’ need for access to small amounts of short-term credit comes at a time of reduced market supply following the departure of several companies from the unsecured loan market, H&T noted, adding that volumes of loans are now more than 40% above pre-pandemic levels. .
Meanwhile, retail sales jumped to £20.8m in the first half, from 12.4m last year, on rising demand for second-hand jewelery and watches.
The purchase of gold and growing demand for foreign exchange as travel resumes led to an increase in other services income to £9.4m from £8.3m.
H&T expects demand for its services to continue to grow in the coming months.
“We anticipate continued strong demand for our core pawnbroker product as the impact of inflation on the consumer increases the need for small sum short-term loans at a time when the supply of credit is more limited than it has been for many years,” he said. said.
The company said the acquisition of Swiss Time Services for £4.3m during the period will add watch repair services to its product offering, which “aligns well” with its watchmaking strategy wider.
It opened four stores in the first half and added another store in July and three more in August, bringing the total number of stores to 265.
More openings are planned for the rest of the year and beyond, he added.
It has started rolling out the new point-of-sale (POS) system to its stores, with the full rollout expected to be completed before the end of the year.
The company increased its interim dividend to 5p from 4p.
Net debt stood at £8.6 million at the end of June, compared to net cash of £17.6 million at December 31, 2021.