H&t Share Discussion Threads

[brownie69] 05/3/2015 13:22

I guess the other thing is that the new regulations on the Payday loan operators swing the pendulum back in favour of Pawnbrokers.

I'm trying to top up but its hard to buy at present!

[proactivest] 05/3/2015 10:52

Video interview with Finance Director Steve Fenerty



Steve Fenerty, finance director of pawnbroker H&T Group (LON:HAT), is upbeat about the prospect of online pawnbroking, which he says opens up a whole new marketplace for the group.
Speaking to Proactive Investors, Fenerty discusses the competition, why the group’s personal loans division is different from payday loan companies like Wonga and how H&T hopes to do ‘better pawnbroking’.
The company’s full-year financial figures revealed pre-tax profits for 2014 were 18% lower at £5.5mln from £6.7mln the year before, while revenues fell from £99.3mln in 2013 to £87.7mln last year.

[spooky] 05/3/2015 09:18

Results were better than expectations, the company is well positioned following the introduction of new regulations. If they continue to execute in line with their strategy then they are cheap and new investors will pick up on the story as it unfolds.

[brownie69] 05/3/2015 08:36

Results look OK. Although profit is down shareholder equity up as a result of deleverage.
If management can deliver on the re purposed strategy and investment made then this is cheap.
Cheap because it trades at a big discount to NAV. Assuming £7m profit this year the PE is single digit. On a PE of 14 we would be looking at an share price of 230p.

[pugugly] 05/3/2015 08:00

Results out: As expected profits down - Debt also down - turnover up. will ahve to wait to see how the market reacts.

[brownie69] 26/2/2015 09:21

Recent drop in share price looks to present and interesting buying opportunity.

Stable business and cheap as chips on fundamentals and has the firepower to pick up pledge books from hard pressed rivals.
Tougher regulation of pay day lenders will do not harm either.

[jeffcranbounre] 09/1/2015 19:20

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[rjmahan] 05/12/2014 15:08

Brilliant article on the alternative finance industry in the US - some read across...

[rainmaker] 28/10/2014 20:57

Thanks Scotches, I believe the vast majority were loans that Wonga refused to roll over ie to extend the credit period. I remember Wonga claiming that they refused the majority of pay day loan applications, some 70%. It's a thought that perhaps some pay day loan Companies have been making loans knowing that Customers can't pay them back as they will make greater profits than would otherwise be the case, through excessive penalty charges.

regards

[scotches] 28/10/2014 13:27

Wonga claim that only 4% of users fail to payback their initial loan within one month. That seems a remarkably low figure. If it was that low you wonder how they managed to rack up 375,000 borrowers where they had to write off loans. According to another Guardian article some of these loans were over a year old.

This article from 2012 claims half of borrowers take out payday loans and cannot pay them back.

The 4% figure also doesn't match the US experience where a recent report indicated 80% rolled over or renewed every 14 days - although that may be related to a less generous social security system than the UK.


The pawnbroking model wants repeat business of a relatively small charge rather than wiping out clients who cannot repay. Of course you need something of value on which to raise the loan initially.

[rainmaker] 28/10/2014 10:04

I'm sure the reduction in competition from Albemarle & Bond is a far bigger positive










Ok so 128 have been bought from the administrator and 59 remain.

regards

[rainmaker] 27/10/2014 13:28

Guys I have to say that new restrictions to the pay day loan Companies having a favourable effect on the Pawnbroking business, would seem to be so infintesimally small, as to be inconsequential. Changes relate to the rolling over of pay day loans which, at some 4% of loans, is just 1 in 25, according to Wonga.Those that are rolled over the following month are just 1%.

regards

[pugugly] 26/10/2014 10:47

Hydrus;. Good points which is why I am not bailing out at the moment

[hydrus] 26/10/2014 10:43

I am not sure there are clear drivers for growth. There are possibilities around taking market share from pay day lenders plus the online stuff. However at this stage I would discount these until there is clear evidence of these contributing significantly to profit. For me the company is a good investment prospect without clear growth. The cash generation is excellent, note that borrowing is now £13m (probably lower than that actually) reduced by 50% year on year. Soon i expect they will be debt free. At that point cash being generated can be used for investing in the growth areas or increasing the dividend or both. The company appears to have stabilised now and there is not much direct competition around so I wouldn't expect any significant deterioration in their pawn brokering market. I am happy to sit earning an ok dividend of 3% with what I believe is very little downside based on the mcap/nwc. In time the cash generation will I believe result in a good return on my investment. Not exciting but solid.

[pugugly] 25/10/2014 14:52

Another point is suggest we need to consider is the changes to the business model implemented by the board to make uo for the fall in revenue from gold sales and whether this has long term potential to increase turnover and margins in the medium (1-3 years) term. If so by how much.

October REfs does not give much support to teh BUY proposition

Proportional figures at 175p

Dividend 2.74% 2014 cash estimate 4.14 average (but no update fro participating brokers from March.

ntav Again refs 187p and for 2013 net borrowings £20.4M

2013 AR gold purchasing 25% to t/o and 10% of profit.

I am very much on the side at teh moment and nursing a paper loss - I was considering an average down but have been unable to identify strong drivers for growth.

[hydrus] 25/10/2014 00:32

Rainmaker if we take off long term borrowings, NWC is £65m which is a far bit higher than MCAP still.

[rainmaker] 24/10/2014 10:09

Another factor I want to examine is the reduction in turnover from defunct competitor, Albemarle & Bond.

regards

[hydrus] 24/10/2014 09:33

Hi rainmaker I made NWC as £78m from last set of results. Therefore current mcap significantly below that.Good point re gold purchasing. What's your overall view of HAT taking that into account? The most interesting thing for me is that in the last two years free cash flow per share has been much higher than EPS. That's something that I look for in my investments, this has of course helped them with paying down that debt.

[hydrus] 24/10/2014 08:42

Can't remember the exact figures but the NWC is significantly larger than the market cap. Perhaps what is unusual though (as there are other companies in this situation) is that HAT is profitable and generates a lot of cash.

[hydrus] 24/10/2014 08:38

I've been watching for a while and bought in at 161 yesterday PM. It's incredibly cheap.

[aomar] 24/10/2014 00:16

Options_Guru is now using twitter , spread the news