Chief executive John Nichols described the results as excellent, but said it would be wrong to assume the economic downturn was responsible for the improvement to £5.5m in the six months to June 30.

He added: "Against wider perception, pawnbroking is not overall a cyclical business and the weaker economic climate is not necessarily a driver for our business.

"This ongoing strong performance has been the result of a successful overall strategy based on sustained growth in the established estate, along with investment in new stores."

H&T, which was established in 1897, currently operates from 95 stores after it acquired sites in Darlington and Wallsend and opened four more in the year to date, including outlets in Cosham and Kilmarnock.

The group hopes to have in excess of 100 stores trading by the end of 2008.

However, it warned acquisitions had become more difficult as the high price of gold resulted in "unrealistic valuations" from potential vendors.

The company's profit from scrap reached £2.4m in the first half, up from £700,000 a year earlier and reflecting a rise in the gold price. Despite trading conditions, retail sales were 14.2 per cent higher on a like-for-like basis.

Mr Nichols added: "While the board is cautious about the impact of the current retail climate on our Christmas trading, we look forward to the rest of the year with confidence." He said it was insulated from the downturn by the capacity of the group to scrap any retail stock at a profit.

Financial services contributed £1.9m of gross profits, up from £1.7m after strong demand for pay day advances.

This offset weakness in cheque cashing, which faced strong competition in a shrinking market.

H&T said two trial stores under the 'Get@Go' brand and focusing on the cheque cashing market will be rebranded as H&T Pawnbrokers.