Pawnbroker H&T raises £17m to open more stores as cash-strapped Brits pledge valuables in exchange for loans
- H&T wants to open 20 more stores in 2023
- Pledge book is up 78% to £89.6m between the end of June and the end of August
- Share placement for institutional and retail investors at 425p was ‘oversubscribed’
Britain’s largest pawnbroker, H&T, has raised £17 million from investors to expand the business amid rising demand from clients struggling with the cost of living.
The company’s boss, Peter McNamara, said they will use the money raised to grow his “book of promise” and open more stores “in a careful and deliberate manner.”
It comes as H&T said this summer that levels of “collateral lending” — where customers borrow money against valuable items, including watches and jewelry — were at an all-time high.
H&T said income shortages are causing more customers to borrow money for valuables
Demand has continued to rise since then, with H&T pledging at £89.6 million at the end of August, up 78 percent from £50.2 million at the end of June.
Bosses said the strong demand was the result of both a reduction in the number of lenders offering short-term loans and the shortage of disposable income.
“Current market conditions are encouraging for us given the decline in the number of lenders offering small-value short-term loans and the increasing impact of inflationary pressures on disposable incomes,” said CEO McNamara.
“This demand is not expected to decline in the short to medium term,” the company added.
This demand is not expected to decline in the short to medium term
It saw “consistently strong sales throughout the summer,” with used jewelry and watches among the most pawned items.
This market “remains an attractive growth segment of the overall jewelry market,” the company said.
Given strong demand, it plans to open another 20 new stores in 2023 to support growth.
H&T announced the stock’s placement last night at the price of 425p and today said it was oversubscribed.
The total number of new shares represents approximately 10 percent of the group’s total share capital.
It raised funds from institutional investors, as well as retail investors through the PrimaryBid platform.
AIM Listed H&T Shares fell 0.4 percent to £4.36 in morning trading on Friday.