Pawnbroker H&T Group full-year pre-tax profits plunged 27.7% to £17m due to “competitive gold margins” and store expansion costs.
H&T chief executive John Nichols said that the profit drop was in line with market expectations. He said: “The board has always expressed its view that the high level of profits from gold purchasing has been a short-term opportunity rather than a core earnings stream.”
However, he said its pawnbroking operations continue to “perform strongly” and it is the first UK pawnbroker to secure a pledge book of more than £50m.
Nichols said: “At a time when the availability of standard forms of credit is diminishing, the group continues to expand its presence, offering immediate access to cash and credit from convenient high street locations.”
Last year, H&T opened a net 26 stores and a further six in 2013 taking its total store numbers to 192.
H&T’s retail sales edged up 1% to £20.1m over the year to December 31.