Investors are piling into gold funds, and central banks are stocking up on bullion, but the most obvious asset to buy is gold in pawnbroking, with investors spending over £15 billion on gold funds in the first three months of this year. Gold has more than doubled in price since 2022, topping $3,300 last week. Despite the California Gold Rush, miners only prospered, while suppliers and shopkeepers made the real money. Today, many gold mining stocks are soaring, but firms in related industries have yet to catch up. Pawnbroking has been around almost as long as gold has been dug up from the ground, and H&T is the biggest of the breed in Britain, with 285 stores and a market valuation of almost £170 million. H&T customers include not just individuals but, increasingly, small businesses and builders. H&T offers loans of up to £5,000, with repayment terms of just a couple of months. The company’s profits for 2024 rose 10 per cent to £29 million, and the pledge book grew 26 per cent to £127 million. The company’s chief executive, Chris Gillespie, is upbeat about the future, saying that the growing need for quick and easy borrowing is driving demand for pawnbroking. H&T’s revenues are almost entirely dependent on pawnbroking, but the company also deals in foreign exchange, sells jewellery, and buys gold, which it sells on to bullion dealers. The company’s shares have had a rocky ride in recent years but are now undeserved, with a 5 per cent yield and robust prospects. Another company in the pawnbroking sector is Ramsdens, which operates 169 shops and is also benefiting from the strong gold price. The company’s chief executive, Peter Kenyon, expects annual profits of at least £13 million, which is ahead of forecasts and up 14 per cent from 2024. Ramsdens offers a range of services, including pawnbroking, gold buying, jewellery retail, and holiday money. While H&T and Ramsdens are dominating the pawnbroking sector, there are other companies that are also benefiting from the growing demand for alternative lending. Capital, a mining services group, generates about 80 per cent of its revenues from gold miners and is benefiting from the buoyant markets. However, not all companies are seeing the benefits of the growing demand for alternative lending. Weir Group, a company that specialises in pumps and crushing equipment, is expected to see a 9 per cent increase in profits to £467 million this year, but its shares have had a decent run but are still good value at £21.48.

Pawnbroking: A Growing Industry

Pawnbroking has been around almost as long as gold has been dug up from the ground, and H&T is the biggest of the breed in Britain. The company offers loans of up to £5,000, with repayment terms of just a couple of months. H&T’s profits for 2024 rose 10 per cent to £29 million, and the pledge book grew 26 per cent to £127 million. The company’s customers include not just individuals but, increasingly, small businesses and builders.

Benefits of Pawnbroking

Pawnbroking offers a range of benefits, including:

• Quick and easy borrowing
• Fast repayment terms
• No need to sell assets
• Flexibility

Pawnbroking is also a growing industry, with investors spending over £15 billion on gold funds in the first three months of this year. The market is hot, and many people are turning to pawnbroking as an alternative to traditional lending options.

Ramsdens: A Bright Future

Ramsdens is another company in the pawnbroking sector, operating 169 shops and benefiting from the strong gold price. The company’s customers tend to be cautious, with borrowings of around £200 frequently paid back early. However, the company’s growth prospects are bright, with brokers expecting an 8 per cent increase in sales to £104 million this year.

Capital: A Mining Services Group

Capital is a mining services group that generates about 80 per cent of its revenues from gold miners. The company is benefiting from the buoyant markets and is expected to see a sharp recovery in revenues and profits in 2026. Capital’s customers include the world’s biggest goldminers, and the company provides a full range of services, from exploration drilling and earthmoving to fleet maintenance and ore analysis. The company’s shares have had a decent run but are now good value at 66p.

Weir Group: A Resilient Business

Weir Group specialises in pumps and crushing equipment and derives a quarter of its revenues from making kit and the rest from servicing and maintaining it. The company works with major miners across the globe and is benefiting from the growing demand for gold. Weir’s shares have had a decent run but are still good value at £21.48. The company’s chief executive, Jon Stanton, recently spent £650 million on Perth-based Micromine, a market-leading business that should fuel short- and long-term growth.

Conclusion

The gold rush continues, and pawnbroking is a growing industry. Companies like H&T, Ramsdens, and Capital are benefiting from the demand for alternative lending. Weir Group is also seeing growth, despite its shares not having had a decent run. With a 5 per cent yield and robust prospects, H&T shares are now undeserved. Ramsdens shares are also good value at £2.60, with a 5 per cent yield. Capital and Weir Group shares are also good value, at 66p and £21.48 respectively. The future looks bright for these companies, and investors should consider buying now.