H&t Share Discussion Threads

[kickingking] 25/11/2024 23:31

Most stores only have three staff. When you are in the business dealing with gold, any less would be disaster and dangerous for the staff

[jm6783] 25/11/2024 18:31

Thanks LLOL. That is good to know. No, I have never worked in retail … nor management consulting ;)

[lord loads of lolly] 25/11/2024 17:43

Jm6783 - not sure if you've ever worked in retail?

I have. Still do in fact (online). And your comment about redeploying staff sounds like the sort of thing management consultants would trot out.

Sounds sensible in theory. Until you realise that a) the majority of existing stores may not actually be overstaffed. If you trawl the staff reviews on Glass Door, that's certainly the general consensus there. Also, relatively few would probably be willing - or able - to drop everything & relocate.

I suspect efficiencies are far more likely to be derived from increasingly sophisticated use of IT to up-, cross- & repeat-sell. And from analysing sales trends in their jewellery & watches to finesse the mix & maximise price potential.

[jm6783] 23/11/2024 10:31

No store staff need to get trimmed, in my opinion. If they are going to open 15-20 stores per year, they should use current staff for the expansion rather than hiring, thereby making themselves more efficient and giving opportunities to current staff.

One way of looking at this is that if this is a scale business, then how can they - as the clear market leader with 300 stores - only be making 12% RoE if they are in any way efficient ?

[saint or sinner?] 23/11/2024 09:26

Hard not to be sceptical when the boards track record shows barely adequate performance during optimal times. I'm sure the shop staff (probably on minimum wage) go above and beyond and deserve every penny they get each year.
Any suggestion that a few of them get trimmed in an attempt to marginally boost profitability (blaming it on the governments requirement to raise NI to fund devastated Public Services) is in my mind completely abhorrent.

[lord loads of lolly] 22/11/2024 22:43

Sure, but some of their main fixed - or largely fixed - costs (e.g. salaries & energy) have increased rapidly since 2021 due to external pressures (war/wage legislation), over which H&T has no control.

If costs had proportionately significantly outpaced revenue growth, there’d be far more legitimate cause for concern. But they haven’t.

That said, I agree there’s still room for improvement. Hopefully Jan 2025’s TU will start to deliver on that, though the current share price suggests there are plenty of sceptics out there still. I don’t count myself amongst them. You?

[jm6783] 21/11/2024 19:18

LLOL, with a lot of fairly fixed costs, this company should have strongly positive operating leverage - meaning its operating income should increase at a much faster pace than its turnover. It has not - hence my concerns and disappointment around operating efficiency.

The other thing you fail to mention when looking only at profits is that they did a rights issue in 2022, which increased the number of shares by around 10%. So, the increase in profits has been split over a higher number of shares, meaning EPS has also been negatively impacted by that.

Again, I am hoping beyond hope for better things going forward.

[lord loads of lolly] 21/11/2024 16:54

jm6783 - you only ever seem to see the negatives here.

Over the past 2 years, HAT has increased revenues from £122m (FY 2021) to £220.78m (FY 2023), with a corresponding increase in operating income.

I agree they haven't hit their "mid-teens" RoE target yet. Nor have they set a timescale for achieving it. But it's far from all bad.

[jm6783] 21/11/2024 13:30

Unfortunately, for the past 2 years, they have consistently guided the market down and missed earnings expectations despite a near perfect backdrop of record high gold prices and a continuing cost of living crisis. Yes, there have been steep wage increases over that time, but you would have thought they would have found ways to become more efficient than they have. Overall, it has been disappointing and management need to work really hard to hit their ‘mid-teensR17; RoE target any time soon.

[saint or sinner?] 21/11/2024 08:02

The most highly paid senior staff - those with their noses in the trough doing the least work?

[riverman77] 20/11/2024 15:34

Yes but if the minimum wage rises (eg for the most junior staff) then the next levels up will also expect a rise to maintain the differential. You'll therefore see a knock on effect across all wage brackets (perhaps with the exception of the most highly paid senior staff)

[lord loads of lolly] 20/11/2024 15:28

boonkoh - I agree few if any staff would be on minimum wage.

But the Directors have previously said increases to minimum wage also have an impact higher up the food chain, as you have to remain competitive given the responsibility of the roles.

That said, I find it odd that sentiment is so downbeat here and can only think investors are being cautious, given what happened on the retail side last Christmas. My (slightly contrarian) view is that things continue to remain tough for many and companies like H&T should actually benefit from this. And whilst the gold price has come off its October highs, it remains strong which is also a tailwind.

[boonkoh] 20/11/2024 14:26

At least better than most retail/hospitality businesses. I presume very few employees in minimum wage and part time, given the expertise needed to value items, negotiate amount, handle cash, regulatory procedures, and dealing with difficult customers.But this share is just in such a strong downtrend atm... Won't be surprised if it gets to 320-330p in the next month or so. Cheap can always get cheaper.

[lord loads of lolly] 15/11/2024 09:24

Jm6783 - I agree staff levels will have to be managed carefully. And any planned new stores may have to be re-examined, given the increase in NI.

But where’s your evidence that "the recent investment in IT systems (hasn't) made them more efficient"? Firstly, investment paybacks nearly always take time. Secondly, both H&T’s revenues & profits have consistently increased since 2022. So I don't think you can fairly assess how successful their IT upgrades have been yet.

Buybacks &/or Director buys would be a welcome development. I lobbied for the latter via a question at the last webinar and will be keeping up the pressure there. They need to put their money where their mouth is. And arguing that Directors' personal circumstances may not allow for any significant holdings simply won't wash with me.

[jm6783] 14/11/2024 21:08

They will need to manage staff levels more carefully, in my opinion. If they are opening more shops, can they try to run these with fewer staff per shop ? And why has all the recent investment in IT systems not made them more efficient?

And beyond that, I would argue they should consider buying back shares at current levels. They have the borrowing capacity to do it and appear to have lower pledge book demand than was previously assumed.

[riverman77] 14/11/2024 20:13

Surely the rise in the minimum wage is going to hit them - not sure how much scope they have to increase lending rates to offset.

[jm6783] 14/11/2024 19:00

Really regretting not having sold these. Well below the 425p rights issue level 2 years ago - itself a discount to the share price at the time. And trading at 87% of book value. Time for some management action, me thinks

[lord loads of lolly] 31/10/2024 09:22

wad collector - Some AIM shares had also fallen further than H&T pre-budget.

Mid January will be the real test here. If FY results are in line or above expectations, happy days & prepare for an upwards re-rate.

Conversely, if we get another underwhelming Christmas retail performance, it'll be hard hats all round.

At least the current strong gold price won't be doing us any harm.

[wad collector] 30/10/2024 20:51

Not bouncing as high as some other AIM shares on today's budget news.

[spob] 29/10/2024 08:30

.

Gold hits record high as rate cuts and Middle East tensions fuel demand





Gains of 40% in past year spark predictions of rally to $3,000 a troy ounce



Leslie Hook

Financial Times

21 October 2024


Gold surged to an all-time high on Monday, fuelled by geopolitical tensions and central bank interest rate cuts.

Bullion’s price climbed to $2,740.37 a troy ounce on Monday, representing a 40 per cent gain in the past year.

The war in the Middle East, coupled with uncertainty over the outcome of next month’s US presidential election, have supercharged gold’s allure as a haven asset.

“The outlook for gold is quite bullish,” said Joni Teves, UBS precious metals strategist, who has a $3,000-a-troy-ounce price target next year. “We think that investor holdings of gold have a lot of room to grow over the next year or so, and that should drive prices higher.”



The anticipation of further rate cuts, with the US Federal Reserve next meeting on November 6-7, has also helped propel gold prices this year. Gold does not yield any interest, so prices typically benefit from falling interest rates.

Many global central banks are in easing mode, with recent rate cuts in the eurozone, Canada and the UK, among others.

Although physical gold demand has been dented by high prices in the top market China, buying from central banks has been very strong as they diversify their reserves away from the dollar.

During the first half of this year, central bank buying hit a record high of 483 tonnes, according to the World Gold Council, the industry body.

Western investors have also poured into gold since the summer, with five consecutive months of global inflows into gold-backed exchange traded funds during May to September.

Ole Hansen, head of commodity strategy at Saxo Bank, said the gold price drives include “the risk of fiscal instability and uncertainties surrounding the US presidential election” as well as central banks diversifying away from the US dollar.

The outcome of the US election on November 5 between vice-president Kamala Harris and former president Donald Trump is looking very close, adding to the uncertainty.

“There are a lot of risks around the next few weeks, with the US election coming up,” said Teves. “We could be in for some choppy price action.”

Silver prices have also climbed sharply, hitting a near 12-year peak, reflecting tight supply for the metal, which is used in electronics and photovoltaic cells, as well as a knock-on effect from rising gold prices.

[spob] 29/10/2024 08:23

These have always been undervalued.

One day someone will buy them out at a bargain price

[lord loads of lolly] 28/10/2024 18:47

Think you’ll find current share price weakness has as much (if not more) to do with fears of AIM share rule meddling in this week’s budget.

Let’s see what happens post-Wednesday.

[saint or sinner?] 28/10/2024 14:28

These were near enough £5 a share a year ago. Current price suggests Mr Market thinks those currently in charge of HAT aren't capable enough to deliver, particularly in what might be considered a pretty optimal climate for the industry.

They perform as well as Erik Ten Hag ... and perhaps need to follow a similar fate.

[johndoe23] 12/10/2024 15:47

Yep stocko also done an excellent piece about which companies may be most at risk