Pawnbroker hit by end of gold rush
But H&T Group put faith in its core pawnbroking business to offset the impact of the gold bubble bursting, with double digit growth in both its pledge book and pawn service charge.
%VIRTUAL-SkimlinksPromo%Pre-tax profits fell by 27.2% to £7.5 million in the six months to June 30 following a £2 million drop in profits at its gold business.
Gold prices peaked in the same period a year ago, having soared as investors fled to the precious metal amid increased global recession fears.
Prices have since fallen by around 16%, while competitive pressures in the market have increased.
H&T, which has 175 stores and 55 "GoldBar" units, said it had been braced for the gold rush to end and was shifting the focus on to its core pawnbroking division.
Gross profits in pawnbroking, which accounts for three quarters of gross profit, rose from £20.1 million to £22.8 million.
H&T said it took advantage of the rising price of gold by using profits from its gold arm to finance store expansion, adding 37 outlets since the start of last year.
Retail sales grew 7% to £9.1 million thanks to the extra stores - but with expansion stripped out, like-for-like sales fell 12% in tough high street trading conditions.
H&T said it still believed gold purchasing will be a "steady source" of business for the group, albeit at lower levels than in recent years.