The group, which operates 136 pawnbroking shops across Britain


The group, which operates 136 pawnbroking shops across Britain, said pre-tax profits had risen 37.7pc to £25.5m last year on revenues up 50pc to £126.4m.

Gold price and economy helps H&T to record profits
H&T said the gold price has helped drive a growing awareness among consumers of the commodity as "a source of cash".

John Nichols, chief executive, said a strengthening gold price had helped drive revenues higher but warned that there was limited visibility over future profits from the gold purchasing business given the volatility of commodities.

H&T said the gold price had been driven by the "uncertainty of world currencies and prevailing low interest rates" and had helped drive a growing awareness among consumers of the commodity as "a source of cash". More recently the price has also been boosted by safe haven buying in the face of unrest in the Middle East.

"Everyone's got broken jewellery and they think it's worthless. You'd be surprised what it's worth," said Mr Nicholls, adding that he was now more positive on the long-term future of the gold purchasing business than he had been a year ago. "It's got legs," he said.

H&T's chief executive said the group had signed 14 leases for new shops over the next quarter and retained his long-term target for 250. The group added 13 shops in 2010.However, Mr Nichols added that the pace of expansion and H&T's long-term shops target could grow if the company made acquisitions. "There are still a lot of independent pawnbrokers and small groups of pawnbrokers out there," he said.

H&T raised its full-year dividend 7.1pc to 6p a share, payable on June 2. The shares fell 0.63 to 320p despite the group claiming it had built a pledge book – the volume of outstanding loans – of £39.5m at the end of 2010, up 3.4pc.

Analysts reacted favourably to the results but left their forecasts largely unchanged. "H&T continues to expand its store base quickly, providing solid foundation to long-term growth prospects. Gold buying volumes remain strong, although we expect margins to return to normal levels in 2011," said John Stevenson at Peel Hunt.

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