H&T knocked by the falling price of gold

H&T, which has 191 outlets, added that the fall-out from the regulatory crackdown on payday lenders was felt across the industry as profits dived to £2m in the six months to June 30, from £4.6m a year earlier.

The period saw rival Albemarle & Bond collapse into administration before the bulk of the business was rescued by a consortium of international investors led by former Bank of Scotland chief executive Sir Peter Burt.

H&T said the average gold price fell by 22 per cent to £773 per troy ounce during the first half, causing profits from gold purchasing to slump from £3.8m to £1.3m and the company to record a small loss from pawnbroking scrap.

Its pledge book fell to £38.5m from £48.6m a year earlier as a result of competition in the industry, as well as a lower lending rate per gram.

Chief executive John Nichols said the group delivered a robust performance and that it was well placed to grow as the market adjusts in the next two years.

He added: “Our focus on delivering excellent service in our stores continues, with strong progress made in the development of personal loans and lending on other asset types.”

The group replaced its Pay Day Advance and KwikLoan products in October 2013 with a more flexible personal loan product.

The company added: “The pricing of our loan products is amongst the lowest, particularly versus larger chains, and almost without exception the 1.6 million customers of pay day lenders would be substantially better off taking a loan with H&T instead.”