H&t Share Discussion Threads

[eezymunny] 08/7/2022 12:01

Not hard to imagine a miles ahead of forecast update on 9th August. Pledge lending 40% above pre-COVID. In the last pre-COVID year they did 20m ptp and current forecasts for just 15m ptp. I guess there´s a lag between a pledge and profit being declared on that transaction, so maybe this year is great and next year blows everything out of the water. The shares may be very very cheap, even after this little run.

A collapse in the gold price would possibly scupper things. And retail sales may be tougher as your average UK punter battens down.

Even so...risk/reward looks good here to me.

[tole] 06/7/2022 17:47

Nice write up here..https://masterinvestor.co.uk/equities/ht-group-trash-or-treasure/

[ymaheru] 04/7/2022 22:20

Good update.

1- Demand for pledge lending has continued to gather momentum in the first half of the year. The pawnbroking pledge book at 30 June 2022 was £84.2m (30 June 2021: £48.3m)

2- Gold purchasing has been buoyant, supported by a rising gold price which has driven both volumes and improved margins.

3- Foreign currency revenues have more than doubled in H1 2022

I can see divs being raised here, and hopefully share price gains (at least after Aug 9th results).

[taylor20] 22/6/2022 08:36

It is a tremendously good idea in principal and providing it through credit unions will definitely improve repayment rates and quality of screening. (94% repayment rates met to date).



However not sure it will scale well and once becomes more widely known about and is being backed by 'the government' rather than 'the community' repayment rates will probably fall off.

So still a market for HAT to work within just a smaller pool - not sure if the scheme will be taking the top or the bottom end of their clients, or if that is good or bad for HAT's margins. I presume in the long term it is better for HAT if pledges are redeemed? But in the short term it makes more if the pledges are not redeemed?

HAT loans in context:

Prime Loan 10%
Credit Card 30%
Pawn Loan 155%
Sub prime loan 500+%
pay day loan 1250%


Bottom line is the scheme is a big unknown in terms of impact to HAT...

[lord loads of lolly] 21/6/2022 11:46

HAT's share price is still well above March 22 & July 21 levels, so all is far from lost. I suspect its recent drop is due to No Interest Loan Scheme news. The scheme trial is small, but if rolled out after 2+ years, it could eventually reach 500,000 people, which is significant. However, that's some way off - indeed might never happen if the cost is deemed too high. In the meantime, HAT's prospects can only be good, given the current economic downturn. I plan to top up if the price falls below 300p. A yield of around 4% with decent growth/earnings visibility is about as good as it gets in the current market!

[ymaheru] 21/6/2022 11:19

I don’t see this scheme as any big event. It’s too small a trial to take much business from HAT, and besides, it’s only happening because of the favourable market for HAT.

I also don’t see gold prices plunging, or anything else negative.

I see interest rates raised slightly, taming inflation less than larger rises. This cuts consumer spending power, helping HAT.

Yet, share price plummets.

[lord loads of lolly] 21/6/2022 09:41

You may be right. Quite apart from anything else, there could be a change of government by the time the 2 year trial's over. Though presumably, the scheme's objectives are closer to Labour than Conservative principals. But the link I gave says "The pilot will aim to test several variables, including loan amounts (average loan value is expected to be £500), repayment periods and terms, and determine repayment rates." That final point implies a full roll out might not be on interest-free terms. Though lower than commercial rates, as it's not-for-profit. You never know, the Treasury may also be looking at the bigger picture. By helping the most vulnerable back on their feet, there may ultimately be less strain on the benefits system. That type of thinking would pretty much be a first though. Governments don't typically favour investment today for jam tomorrow. Probably because they may not still be in power to reap the rewards.

[riverman77] 20/6/2022 18:15

Nice idea, but the government simply won't be able to afford this in any scale, given massive levels of government debt and spiralling borrowing costs. Sub prime lenders need to charge high interest to cover their costs and high level of defaults. By offering interest free loans, governments would effectively be racking up massive losses.

[lord loads of lolly] 20/6/2022 17:45

Here's more info on the No Interest Loan Scheme: A 2 year pilot's being rolled out in up to 6 deprived areas starting Autumn 22. So in any case it wouldn't hit H&T significantly during that extended trial period. But initial share price reaction suggests it might impact longer term, as a full-scale roll-out (if implemented) could eventually reach 500,000 people according to a feasibility study conducted before the pandemic.

[lord loads of lolly] 20/6/2022 09:55

Unless it's to do with this?:

[riverman77] 17/6/2022 15:40

Can't see any reason either, suspect it's just the wide spread

[ymaheru] 17/6/2022 14:48

I think I’d do the same, in the absence of any negative news.

[lord loads of lolly] 17/6/2022 14:05

riverman77 may know different, but I can't see any obvious reason for the fall. No new RNS & conditions can only be improving currently for pawnbrokers. H&T's marketmakers frequently manipulate the price from one day to the next, usually by artificially widening the spread. Currently for example, the bid is 328p, the ask is 345p, yet the share price is shown as 330p. Something fishy there! So if it stays down today, it wouldn't surprise me at all to see it back up on Monday. And if it dropped back under 300p without any further news, I'd add as there'd be no obvious reason for this (hopefully temporary) weakness.

[ymaheru] 17/6/2022 12:46

Hello Riverman77, any idea why HAT is plummeting today?
Seems like no reason. It didn't soar yesterday, so why fall today?

[riverman77] 17/6/2022 10:27

Should be a decent safe haven during recessionary times, although not immune to inflation (higher staff and energy costs). Will consider adding if it dips a bit more

[value hound] 17/5/2022 08:37

Re-tipped by Simon T yesterday, who concludes with:

"Since the start of the year, H&T’s pledge book has surged 17 per cent with redemptions stable and loan-to-value ratios prudent, while gold purchasing volumes are back at pre-pandemic levels, supported by a 9 per cent rise in the sterling gold price. Moreover, foreign exchange volumes are recovering quickly as millions of cash-rich holidaymakers jet off to sunnier climes. Self-help initiatives are buoying retail sales of both new and pre-owned jewellery, too.

"House broker Shore Capital pencils in a 54 per cent rise in 2022 EPS to 32.2p (and sees upside), and a 16 per cent higher payout per share of 14p, implying a forward PE ratio of 11.3 and prospective dividend yield of 3.8 per cent. H&T’s share price has risen a fifth in the past three months and I raise my target from 400p to 430p."

[outsizeclothes.com] 16/5/2022 15:56

Of course H&T branch bank accounts haven't been closed. That would mandate an immediate RNS.
H&Ts single biggest problem will be avoiding bad debt, as the flood of financially distressed come knocking.
So far their credit control / loan suitability assessment criteria seems to be working well. let's hope it continues to do so, whilst helping the maximum number of potential clients.
I also think pawn is here to stay - pawn gives you a fall-back hard asset guarantee.

[lord loads of lolly] 15/5/2022 14:17

But the question is whether any H&T branches have had their bank accounts closed, which I suspect they haven’t. Far more likely to be small independent operators with less clearly defined/centralised operating policies & lending criteria. The suggestion all pawnbroker shops could disappear within 5 years is absurd. Bit like saying if the downturn in smartphone sales continued from its 2018 peak, no-one would own a smartphone in another 5 years’ time. Pawnbrokers have operated since the 1800s and recent sector consolidation has simply been to provide the necessary economies of scale (from which H&T has hugely benefitted, thanks to some shrewd acquisitions).

[c3479z] 14/5/2022 23:12

can confirm the accounts being frozen as recorded on radio4 moneybox today.
said the decline in pawnbroker shops could mean they all disappear within 5 years....if it continues at the same rate

[lord loads of lolly] 14/5/2022 10:37

Yes, H&T is the market leader by some margin. The article you mention suggests some pawnbrokers are having their bank accounts restricted/withdrawn due to money laundering concerns. Hopefully H&T hasn’t been affected, but it would be good if they confirmed either way.

[ymaheru] 14/5/2022 10:13

Also, I just read that:
The number of pawnbrokers has fallen from more than 2,000 in 2014 to fewer than 900 last year.

HAT have over 250 of those, so 30% of the market. It helps that competition has halved.

[scotches] 12/5/2022 13:11

Trading update 12/5/2022




Chris Gillespie, chief executive of H&T, said:

"I am delighted with the progress we have made in the first four months of this financial year. In particular, demand for our core pawnbroking loans has been the strongest for many years. This reflects a growing need by customers to borrow a small sum for a short term at a time of reduced supply of such credit in the economy.

"Our focus is on continuing to deliver excellent levels of service to our customers. Our core pawnbroking and retail businesses represent significant growth opportunities as do the other financial service products we offer, and we are investing in our store estate, our technology and our digital capabilities.

"The impact of inflationary pressures is being felt across the economy, by individuals and businesses alike. We are mindful of the challenges this presents for our customers and employees. Our business is not immune to these forces, and we are working hard to manage the inflationary impact upon our cost base.

"We are optimistic for the future growth prospects of the Group and believe that pledge lending is well suited to assist consumers as they manage the peaks and troughs of their spending patterns in an environment where disposable income is impacted by rising inflation."

[ymaheru] 04/5/2022 21:16

Credit card debt rising back to pre-covid levels and household savings have already dropped 80% back to pre-covid level.

So, should be better market for HAT, which is bigger than it was pre-pandemic, after The Money Shop deal in 2019.

“Credit card borrowing jumped by more than 10pc on the year, according to the Bank of England, taking total card debt back above £60bn in the month, undoing some of the hard work of the pandemic in which households paid down their balances from more than £72bn in February 2020 to a low of £56bn in April 2021.

At the same time the net flow of deposits into bank and building societies is back down to £4.6bn, effectively returning to pre-Covid levels as households are no longer putting away the £20bn or more which they saved at the peak of the pandemic lockdowns.”

[lord loads of lolly] 04/4/2022 14:49

Afternoon ymaheru! I agree. Barring a global market meltdown, I think HAT is in for some decent share price growth in 2022. Happily for shareholders - but sadly for many of its customers - HAT's services are going to be needed more than ever this year.