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The UK’s largest pawnbroking group, H&T, has revealed that pre-tax profits slumped a hefty 60 per cent to £6.7m, for the full year to 31 December 2013.
Total sales for the full year were £49.9m, down by 19.9 per cent compared with the previous year’s £62.3m.
The figures come as a surprise after the firm reported an 18 per cent rise in profits for Q4 on sales that were up by 56 per cent compared with the same period the previous year.
Pawnbroking firms started to experience tougher trading conditions in 2013 thanks to the levelling-out of the market value of gold scrap, although H&T had hailed its move from scrap sales to bona fide retail as a saving grace. Its sales of jewellery rose 24 per cent to £24.9m in the same period, driven by a turnaround in the second half of the year.
Chief executive John Nichols said: “2013 was a challenging year for the pawnbroking industry, with the sector impacted by a sudden fall in the gold price in Q2 2013, heightened competitive activity and regulatory challenges across the wider UK alternative credit sector.
“Despite this challenging back-drop the group has performed resiliently. We have focused on reducing net debt and increasing retail sales to counter the reduction in revenues from scrap disposition. We have also carried out measured cost reductions which resulted in lower operating costs in 2013, despite the group’s larger footprint. This reduction is expected to continue into 2014 as we benefit from the full year effect of measures implemented in H2 2013.”
It is thought that the firm lent around £100m to 180,000 customers during the 12-month period.
