"Established 1897" is the new branding adorning some of the shops belonging to pawnbroker H&T (HAT). Its longevity is an achievement of which the group can be proud, as a fluctuating gold price and changes to regulations have caused troubles for many a lender over the past few years.
- Favourable price of gold
- Strong cash generating capabilities
- Decent dividend yield, covered twice
- Varied revenue stream
- Some underperforming outlets
- Increasingly tough regulatory environment
The gold boom of 2009 to 2012 created a wonderful environment for pawnbrokers as the soaring price of the yellow metal boosted both profits on purchasing operations and the value of pledged collateral. H&T's financial performance benefited and pre-tax profit reached £26m in 2010. But, of course, the trend was not to last and, as the gold price flopped, many pawnbrokers found themselves in difficulties. Former Aim-traded rival Albemarle & Bond was one that went into administration. While H&T's profits also suffered, its strategy to open retail outlets for selling jewellery has provided an extra revenue stream, keeping it in business even as turnover from the pledge book fell.