Britain’s biggest pawnbroker has reported a rise in profits as customers sought small, quick loans against jewellery and watches, a sign of the ongoing strain of the cost of living crisis.
H&T, which operates 280 stores in the UK, said pre-tax profits rose 12.5% to £9.9 million in the first six months of 2024 compared with the same period last year.
The company’s lending business rose 14% year-on-year to £146 million, which the company said was due to “broader macroeconomic conditions” and the growing shortage of regulated firms offering small, short-term loans.
The cost of living crisis, which worsened in 2022 as runaway inflation pushed up the prices of essential consumer goods, has put pressure on household finances, leading Britons to increasingly turn to pawnbrokers to make ends meet.
H&T and its competitors are often seen as an indicator of consumers’ financial health. The company said current market conditions “create growth opportunities for the pawnbroking business and particularly for H&T as a market leader.”
Consumers who take out a H&T loan pay an annual interest rate of 165.5%. If the loan is not repaid, the pawned item is sold to pay off the debt.
The company said loans were generally being repaid faster than in the past, taking 94 days in the first half of this year, compared to 97 days last year. The value of loans against watches had fallen as certain high-end brands had experienced “price volatility,” it 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 regulated small business loans are severely limited.”
Gold prices hit a record high on Tuesday as growing hopes of a rate cut by the US Federal Reserve prompted investors to buy. H&T said: “Gold purchases are benefiting from current high gold prices while volumes remain largely unchanged.”
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H&T was founded in London in 1897 by Walter Harvey and Charles James Thompson. They built the company into a chain of 19 stores before they died within weeks of each other in 1915.
