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Jeffrey Hutton is a Morningstar contributor.

Thorn Group (TGA) chief executive officer John Hughes has got to be one of the few corporate bosses linked to the retail sector who welcomes weaker consumer sentiment.

The consumer credit company, whose biggest business is Radio Rentals, reported a 30 per cent jump in net profit after tax during the six months ended 30 September. That's the company's fifth consecutive rise in half-year profit since 2007, as it expands it loan book to consumers who lease TVs, couches or refrigerators but don't have the cash to buy them outright.

"We're a niche player in the financial services sector," Hughes told Morningstar this week after the company's earnings announcement in Sydney.

"And we happen to be bloody good at it."

The results underline a potential area of interest for retail investors keen on steady returns, as sharemarket turmoil and the rising cost of electricity and other once-cheap services erode confidence. Many consumers are holding onto their cash - or going into debt to buy household necessities if cash is tight.

"This is the perfect economic environment for them," says Morningstar analyst James Levien.

"People are looking to cut back and renting furniture is an attractive option."

Thorn Group makes its money by making small unsecured loans of a few thousand dollars, as well as hiring out whitegoods and household appliances which the user can then own after a set payment period.

In March, the company bought loan recovery business National Credit Management Limited (NCML) for $32.5 million. NCML will contribute to a "substantial increase in earnings," Thorn said in its earnings presentation.

Despite an overall trend to pay off debt, many consumers living on the margins are struggling with the higher prices of utilities. Some 42 per cent of Thorn's customers are on unemployment insurance. The government pays the expense of furniture rentals directly to Thorn and then sends the remainder to insurance recipients.

The company says that consumer impulse or efforts to rehabilitate their credit history underpin the company when times are good.

"We're a port of call for our customers on their way to credit repair," says Thorn chief financial officer Peter Eaton.

"Our performance has been strong in both good and negative economic times. It doesn't dip like retailers do in challenging conditions."

Thorn, which listed its shares in December 2006, said rental customer numbers rose 4 per cent during the half, while its loan book for its Cashfirst lending business grew by a quarter to $15 million. Average furniture and appliance rental contracts now run 27 months, up from 23 months four years ago.

Longer contract terms mean more earnings stability and less customer churn. Thorn's debt is about 8 per cent of the company's overall equity. Retail investors, which make up about a quarter of the company's share register, should take note, Hughes says.