H&t Share Discussion Threads

[playful] 11/7/2013 09:11

Decided to buy H&T today as they are simply too cheap and the business model has certainly stood the test of time, so I don't see any worries buying below NTAV

[bench2] 01/7/2013 11:58

New NED purchase 5k @200p hardly a vote of confidence ..... probably circa 30% of his annual directors fees ...... hardly skin in the game , but better than nothing
no reason to buy yet . But close to 6% yield if divi held .

[outsizeclothes.com] 31/5/2013 01:31

Gold's rally today will help settle nerves too. $1415 as I write, so that's a $35 move in a day and a half. IF this lasts, (IF) and gold were to range $1400-$1500 H&T could be cheap, and I'd adjust my Sales, Pre-tax and EPS expectations up 20+% from my "worst case" detailed yesterday.
New figures could be £6m from Gold, Sales of £105m, Pre-tax £13m EPS 25p and a maintained or very slightly increased divvy. [ 12p? ]

But until Gold finds a definite floor, it's still a poor short-term outlook.

[cutlosses] 29/5/2013 15:25

OSC

Thanks for your interesting posts, I would usually say x3 profits would be where Imho the debt is high. Not too many companies around with net debt of just x2 profits but agree it is a sensible way of screening shares.

I do see the potential for a divvy cut though H&T may wish to keep up the record of increasing their dividend in recent years.

Pawnbroking is a very old business and will have seen volatily in the Gold price many times before. I paid well over £3 a share so I'm stuck with this one at the moment.

Some directors purchases a this point would be reassuring.

[outsizeclothes.com] 29/5/2013 10:12

If Gold carries on down the way it's doing, these could be the 2013 figures, - using the table format from above. I think as gold price goes down, sales will too as people lose their perception of value in luxury/high end jewellery.
Probably my figures are those of an extreme case, but I'd like to see what others suggest this year's figures might be.

Year Pledge Stores PSC NetDebt Gold Sales Pre-Tax EPS basic

2013 53.0m 192 30.0m. 27.0m 4.0m. 85.0m. 9.0m. 15p

2012 51.6m 186 28.4m 27.6m 12.0m 129.7m 17.0m 35.92p

2011 46.6m 160 26.7m 29.3m 17.2m 125.5m 23.5m 51.12p

[outsizeclothes.com] 29/5/2013 00:12

High on an ongoing basis relative to a deteriorating earnings and profits situation.
Retail sales are falling. Gold price still falling ( $1380 as I write )
Year end: - Purchase margin is down 26%
ROCE is down even more from 26.2% to 17.6%
Profits down from 23.5m to 17m with possibly sub. £13m for this year.( counting for 20+ new stores as not yet generating profits, and possibly now several of the Goldbars )

When net debt passes twice profits I'd count it as getting high. Management might too, and trim the divvy rather than shelve growth plans.

[cutlosses] 24/5/2013 13:39

OSC

On what basis would you say that the debt is high?

[outsizeclothes.com] 24/5/2013 13:26

11 months ago I warned of negative read across from ABM to H&T. The board, yet again, have been slow to release news that the dogs in the street knew already from the read-across.
As well as being tardy about Gold profits being hit, they have said nothing about the OFT and ongoing pay-day profit situation.
Combine 2 areas of falling profit with their debt, which is large, and you have the makings of a 'prudent' divvy cut because of reduced earnings, despite core pawn-broking going reasonably well.

[bench2] 24/5/2013 08:44

Most HAT holders were expecting a negative statement re gold , but the board have been sitting on this since the ABM downgrade . In my view they should have cleared the air at that moment with a statement until leaving shareholders in limbo . We all know they have a solid pledge book and have been running the traditional pawn broking biz better than ABM , but the unknown was gold . At least they have given us a pre tax formula re gold price , but vague statements about ability to hedge do not help . If you are a bear of gold price in £ then avoid for the short term . If you feel gold price has fallen far enough and will recover then 225p a reasonable entry point ( 225p the low point in 2010 , 152p the low in 2009 )

[pugugly] 24/5/2013 08:29

Humm:- Trading profit likely hit to tune of £2 million. Minimal volume response - Some buying at 240p - Opportunity or bear trap ?

Not sure - Thoughts ?

[cutlosses] 27/3/2013 16:51

Some good buying today yet the share price drops by 4%

Hard to comprehend.

At least a nice dividend is in the pipeline.

[mikey62] 08/3/2013 12:46

The pay day loans situation actually helps HAT.

[cutlosses] 08/3/2013 10:19

The market has reacted well to the results this week.

Regarding pay day loans, the following extract highlights what payday loans contribute to profits (total net profit £17 million

"Cheque Cashing
Cheque cashing income fell from GBP4.9m to GBP3.7m due to the reduced number of cheques in circulation. Cheque cashing now contributes 6.0% of gross profit (2011: 7.5%).
The Group's Payday Advance product, contributing two thirds of total cheque cashing profit, has accounted for GBP1.0m of this decline. The product was designed to operate with the benefit of a cheque guarantee card acting as part of the Group's underwriting criteria, but since the banks have gradually stopped issuing cheque guarantee cards, the Group's Payday Advance loanbook has experienced a steady decline. Countering this decline, the Group has since widened acceptance criteria to those customers with only a debit card, and has accordingly developed its own credit scoring and underwriting criteria. While acknowledging that this market represents a significant opportunity for the Group, the Board is seeking to improve the bad debt metrics and move to a more flexible and customer friendly product before expanding the loanbook.
The OFT recently conducted a compliance review into the payday lending"

So pay day loans account for about 4% of profits ( 2/3rds of 6%)

[scotches] 06/3/2013 17:07

CL: The articles on this today have condemned the companies which compete on just how fast they can get the cash to your account. The OFT would prefer if companies competed in relation to the cost of the loan.



The HAT rates seem to compare favourably with Wonga etc.

£100 for 30 days from HAT is payback £120.

£100 for 30 days from Wonga is payback £136.72.

HAT describe themselves as, "cheapest pay day lender"

[cutlosses] 06/3/2013 15:40

Scotches- Do you think this is a serious problem for HAT?

Do we know what percentage of revenue is from payday loans?

Perhaps some more control of the pay day loan sector would be good for the core pawnbroking side in the long run anyway.

[scotches] 06/3/2013 11:43

OFT review says entire payday loans sector has problems, with lenders' revenues heavily reliant on customers failing to repay their loans on time.

[mikey34] 07/1/2013 17:13

Quite happy with the update.....I think the mkt has been pricing in quite a dip in gold price and then a subsequent fall because of our exposure to it.The fact is the pawn business is still the driver here,and everything on that front looks fine.Undervalued on that pe.

[cutlosses] 07/1/2013 16:56

Update today.

A nice increase to the share price (plus 5%).

Lets hope the share price now settles over the £3 mark

[gwatson56] 24/12/2012 10:05

I am anticipating an update post lunch today.... Suspect some parts doing very well other parts average .... share price should be steady ... Hopeful that 2013 is a good year for HAT

edit : Ah well must be next week .....

edit 7/1 .... steady as she goes then.... share price should be supported sub £3 ... I assume market expectation are what are reported in Digital Look....

31-Dec-12 Rev (129.76) PreTax (16.38) EPS (32.65p) PE (8.7) Div (11.16p) Yield (3.9%)

Better than I get at the Post office ..... GLA

[cutlosses] 13/12/2012 16:37

Thank you for the useful summary Scotches.

Notice a large buyer late today.

[scotches] 12/12/2012 16:39

The Chancellor has promised an extension of austerity and thereby perfect conditions for pawnbroker growth in the UK until 2018. Despite that the share price of HAT and ABM continue to decline caused by a reduction in gold profits and the assimilation of new stores.

Stokopedia has a "rolling pe" for ABM of 9.47 and HAT of 7.66. You can pick up 9.75p from ABM when it goes ex-div on the 24th. Dividend announcements will probably be a useful guidance on how the companies really view future prospects.

The poor public regard for payday loans is also a negative for sentiment. Assuming the two majors are not involved in any sharp practice then more robust legislation and a shakeout of the sharks would be positive.

[scotches] 28/11/2012 22:35

...the government has agreed to change the law to give the new Financial Conduct Authority (FCA) powers to set a cap on exorbitant interest rates charged on payday loans.

[cutlosses] 28/11/2012 21:43

Thanks for the interesting link.

At todays price ( 272P) the yield is nearly 4% and has steadily increased.

I agree that "this is a rare share in the current market".

[exv] 22/11/2012 14:05

I've bought into HAT for my online portfolio today after a slight reassessment of how things are doing.



See full post above; the basic premise is that, while I don't trust the stream of profits from gold, it has certainly allowed the company to grow far more rapidly than it would have otherwise. Management seem to be bearish on the gold profits (as they should be) but are using the opportunity well. More traditional revenue streams are increasing, and will increase further as the stores mature - there'll be a big lump in the next few years as their rapid growth works through.

Even if you're not bullish on HAT's prospects, this is a great share for a number of portfolios IMO. HAT's price, to me, implies pessimism in the trends for pawnbroking - a scenario that will only occur if the general economy picks up pretty rapidly. This makes it a rare share in the current market - cheap looking while being (potentially) negatively correlated with wages/economic growth etc.