Retail financial service provider Albemarle & Bond posted half-year gross profits of £36.5 million this morning, reflecting strong trading for the business at a time of squeezed consumer finances.
The business, which offers pawnbroking & payday loans, increased its profit before tax by 12 per cent during the six months ending December 31st 2011 to total £12.1 million, while its pledge book grew seven per cent compared to the same period last year.
Traditional forms of credit are proving persistently difficult for many consumers to arrange and with personal finances so stretched at present the UK is proving a fertile market for pawnbrokers.
Barry Stevenson, CEO of Albemarle & Bond, commented: “We are pleased to be reporting on another successful period together with continued investment to support long term growth.
“Meeting the short term cash needs of our customer base is a specialised business and we believe the high redemption level across our pawnbroking business is a good indicator of how we have improved understanding of our customers’ requirements and tailored products to suit their needs.”
Albemarle & Bond opened 14 new stores during the six month period and hopes to open another 11 before the end of its full year, which will mean 226 across the UK in total.
Of its current stores, 40 are gold-buying pop-up shops and this format has benefited greatly from the rising price of the precious metal, meaning gross profits at this division climbed 88 per cent as volumes bought rose 57 per cent in the period.
The group has also reported strong demand for pawnbroking loans both from individuals and small businesses and anticipates this trend to continue, while its new Payday Anyway product, a debit card based payday loan offer, has also proved very popular since it was launched last July.
Stevenson continued: “Two years into the new store opening programme we are now in a good position to assess the performance of these new stores and, as expected, gold buying has halved the time to break even. More importantly pledge book growth across the new outlets is ahead of original forecasts.”
According to a recent report from the Local Data Company, pawnbrokers have been one of the main business types to regularly replace traditional retailers on the UK’s high street in the last few years.
Many retailers will see the strength of the pawnbroking sector as a measure of the current weakness seen in the retail market, which relies so heavily on buoyant consumer spending.
“We are now nearly half-way through our five year growth plan and I believe we have made good progress against the targets set,” Stevenson added.
“The overall trading environment has remained positive and we are therefore well positioned to capitalise further on the market opportunity.”