‘A beneficiary of recent UK economic malaise’: Pawnbrokers are still doing well.
Britain’s biggest pawnbroker H&T reported strong sales in line with expectations for the first six months of the year despite improving an economic climate in the UK.
The value of H&T’s pledge book, which tracks short term loans via the pawnbroker, increased by four per cent to reach £105m in the first half of the year.
Investment group Shore Capital expects growth for the full year to be around five per cent.
Pawnbroking is a counter-cyclical business, and so “a beneficiary of recent UK economic malaise”, equity analyst at Shore Capital, Gary Greenwood, said
The company noted a particular surge in the buying and selling of watches, as consumers look to both sell their timepieces and buy a cheaper, second-hand high-end watch.
Growth is slowing, however: revenue at H&T for the full year 2023 rose by 27 per cent year on year to £220m, the company announced earlier this year.
Pawnbrokers recorded record sales during the cost-of-living crisis as struggling Brits looked to pay ballooning rents and bills.
However, the revenue decline that would signal an end to Brits’ financial woes hasn’t yet materialised: the company expects results for 2024 to be in line with expectations as it continues to grow despite an improving economic outlook in the UK.
Seasonal shifts
H&T noted that redemptions – the process of redeeming pledged items from a pawnshop after having settled a debt – settled more slowly than they expected.
However, they added that they had seen a similar trend the previous year, which was attributed to various factors, including religious festivals and weddings.
“A seasonal trend may be developing for the business,” Shore Capital said, with redemptions spiking in March and settling down in the run up to summer.
The group will provide a more detailed set of interim results on August 20.