Est1897 performing well despite 8% decline in gross profit overall.

H&T Group has released its preliminary results for the year ended December 31 2014, citing a 24.1% increase in retail sales to £30.9m but an 8.4% decrease in gross profits overall to £45.7m.

Profit before tax was also down 17.9% from £6.7m in 2013 to 5.5m in 2014, while the company’s gross pledge book also fell to £38.5m – a fall of 12.7% compared to 2013. This is said to be due to the reduced gold price and an increasingly competitive environment.


Profit after tax was fell to £4.3m in 2014, compared to £4.9m in 2013.

However, more growth could be seen in the retail sector, with retail sales up 24.1% due to brand development, improved point of sale, pricing policy and stock replenishment.

The number of stores decreased slightly by 1.5% in 2014 compared to 2013, yet the Group’s secondhand concept stores Est1897 appeared to be strong.

In terms of operational success, the implementation of the ‘Expert Eye’ system to support store valuations of specialist items has been declared a big hit, as has the continued emphasis on personal loans product and its corresponding online offer.

H&T chairman, Peter D McNamara, explained: “H&T Pawnbrokers has, unlike many in the sector, both survived and generated strong cash flows against a back drop of a low gold price, significant changes in consumer behaviour and a far tighter regulatory regime. The challenge now is to implement strategies to reflect this different environment.”

Net debt also decreased by 53.1% in 2014, down to £9.7m compared to £20.7m in the previous year. McNamara continued: “This reduction has lowered the risk in the business, but from this position we now need to develop a group of profitable products that reduces the impact of gold price volatility. We have seen a strong retail performance which partially addresses the profitability of the Group, but we need to develop new and more valuable product lines, including secured lending to generate a satisfactory return on capital.

The Group will now continue to evolve its strategy into 2015, with plans in place to develop a greater presence in high footfall shopping malls across the UK.

According to McNamara: “The negativity associated with the word “pawnbroking” can prevent us obtaining leases in some high footfall locations such as shopping malls. We need to look at new formats and branding for our business to attract a customer who would not use or enter a shop with a pawnbroking symbol or that shop front description. We will need to relocate stores where their location has a reducing footfall, to those places where it will grow. The combination of on-line presence, high visibility and an attractive range of products will be important.”

This has already partly been achieved through the development of the Est1897 store network, which now incorporates 39 retail locations across the country. This is being supported by a new range of online services both through internet and mobile channels.

Overall, the company has 191 stores, including 152 H&T Pawnbrokers. During the year it closed eight stores, opened one H&T Pawnbrokers store, opened three standalone est1897 stores and acquired one established pawnbroking business.