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Payday Loans News – H and T Group Expecting High Profits Following Gold Rush

by Jim ONeil on January 13, 2011

in Payday Loans News

H&T Group offers check cashing, unsecured loans, and payday loans to residents of the UK. During 2010, 13 new stores were added by the company. It experienced record-breaking profits in the pawnbroking sector and expects that its 2010 profits will reach the high end of City expectations.

H&T is currently the largest pawnbroker in the UK and experienced record levels of lending in 2010. This was mainly due to the increased value of the average loan. In late December, there was £39.5 million on the company’s pledge book, an increase from the June 30 figure of £37.3 million. Though the economy played some part, the main sources of growth were the increasing gold price and addition of stores.

The price of gold increased by one-third during 2010. H&T Commercial Director Steve Fenerty reported that the rising gold price helped increase the profit margins of the company. According to him, this market was long underserved and H&T was engaged in expansion prior to the recession. The positive news regarding 2010 profits for H&T led the company shares to close at 335p, up 15.

Though H&T is happy about its 2010 performance, it is not certain the numbers will be as favorable in 2011. This company is keeping its eye on the uncertainty that characterizes gold buying volumes.

It is also wary about whether the margin within this segment of its business can be sustained. H&T acknowledged that competition has become tighter.

Tesco recently announced that it would be starting a cash-for-gold business. In addition to this new competition, H&T vies for share with companies like Albermarle & Bond. However, some analysts remain optimistic about H&T, maintaining their buy recommendation. They feel that the addition of 13 stores and the growth of six percent in its pledge book illustrate the progress that H&T has made.

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