Pawnbroker H&T strikes gold with shopping centre sites

H&T Group now expects its full-year profits to beat market expectations after television advertising increased awareness of current high market prices and fuelled desire among customers to sell their gold.

The firm has 56 buying sites, known as Gold Bars, in shopping centres across the UK, which have experienced an influx of sellers. Although the outlets were set up as temporary locations, the firm said their success could lead to a more permanent grounding.

Gold purchasing volumes contributed 12.6m, up from 3.3m in the same period last year – bringing in a third of the company's business. Pawnbroking scrap gross profits were 6.4m, up from 1m in the same period last year, though this was boosted by delayed profits from 2009 auctions.

The boom in gold purchasing, coupled with an increase in the number of its pawnbroking outlets, drove pre-tax profits for H&T to 14.5m, up from 8.5m in the same period last year.

H&T finance director Alex Maby said television adverts, which featured during shows including GMTV in the first quarter of 2010, helped the gold-purchasing market expand. He added the wider economic climate would have only made a small contribution to the rise.

The firm now has 130 core pawnbroking branches, in addition to the Gold Bars, and has leases for two more stores in the pipeline.

The group also launched online pawnbroking operations and has plans to develop these services further.

Andrew Wade, of Numis Securities, said the firm's results were "strong".

He said: "On the back of a strong first half, we raise our December

2010 gold purchasing estimate and, consequently, our pre-tax profit forecast to 23.1m from 21.1m."