Pawnbroker rebuilds its pledgebook as borrowing demand returns

Pawnbrokers H&T Group says demand for pledge lending has fully recovered to pre-pandemic levels.

H&T Pawnbrokers in Queen Street, Wolverhampton
H&T Pawnbrokers in Queen Street, Wolverhampton

The group, which has shops in Dudley, Great Bridge, Kidderminster, Walsall, West Bromwich and Wolverhampton, will be reporting its full results for 2021 on March 8.

Its priority in 2021 was to focus on its core pawnbroking and retail sales business, rebuilding the pledgebook as borrowing demand returned and maximising retail sales and other opportunities once Covid-19-related trading restrictions were lifted in April.

Chief executive Chris Gillespie said: "The group has performed consistently well through the second half of 2021 and I am particularly pleased by the strong demand for our pawnbroking loans. We have seen higher month-on-month lending levels in each successive month since May, with a full return during the fourth quarter to pre-pandemic lending volumes and very positive momentum as we move into 2022.

"The impact on trading of the enhanced Covid-19 restrictions announced during December 2021 across England, Scotland, and Wales, has thus far been limited. Lending volumes and retail sales remained strong up until the Christmas break and this has continued into January.

"Despite higher levels of employee absence due to Covid-19 related self-isolation and illness, our 257 stores have remained open, and service levels have been maintained across the business. However, we remain cautious about future trading conditions and inflationary pressures as the pandemic continues to evolve, and our priority will always be the safety of our customers and colleagues."

The group expects to report profit before tax for the full year of between £9 million and £10.1m.

The months of November and December saw particularly strong borrowing demand, with lending volumes in December ahead of expectations and at record levels.

At the end of December, the pledge book had grown to £67m, an increase of 39 per cent over the previous year and up 34 per cent since June

Retail sales have continued to remain robust, with consistently strong demand for high quality pre-owned watches and jewellery both online and in H&T's store network. The important Christmas trading period was particularly successful, and sales both of new and pre-owned items exceeded expectations.

Overall, retail sales for 2021 were up 21 per cent on 2020, at improved margins.

Gold purchase and foreign exchange transaction volumes improved in the fourth quarter and were in line with management expectations but remain below pre-pandemic levels. Money transfer and cheque cashing volumes were in line with management expectations.

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