H&t Share Discussion Threads

[riverman77] 13/12/2023 12:32

Good to see this stabilising and not falling into a downward spiral which I was starting to fear a bit!

[ntv] 13/12/2023 08:33

The last couple of years the interim dividend has been half the final dividend as with a lot of companies so I am going to go with that figure of 13p

[ntv] 12/12/2023 19:05

The shares only dropped about 5% when they raised some cash in Oct 22
Maybe they should have done the same again to maintain the momentum

[lord loads of lolly] 12/12/2023 18:24

If some of my HAT buys temporarily go underwater, I’ll just console myself with the divis. Doubt any weakness will be long-lived.

[1c3479z] 12/12/2023 18:22

is it a combination of the NLW increase in April, they employ about ?1500, so relatively labour intensive, and business rates on their premises that caused the downgrade? Live near Harrow where they've an outlet on the High St and another only about 250 yds away, presumably they're trapped in a longish lease here.
Profits are expected to rise gradually even now over the next few years which is a lot better than for many.

[riverman77] 12/12/2023 17:13

Agree don't think anything of concern here and also added, although as I say wouldn't be surprised if it remains weak for time being.

[lord loads of lolly] 12/12/2023 16:41

riverman77 - I still think this is a gross overreaction & will correct (on results day if not before).

The note actually says H&T "will face pressure on its operating costs when the National Living Wage goes up next April but increased funding capacity and higher-than-expected book growth will offset this".

So unless they mean it won't fully offset the NLW increase (which they don't actually say), there's really nothing to see here.

I added today and will add again if the price sinks much lower.

[riverman77] 12/12/2023 15:26

FUTR recently fell by around 40% (in total) after a negative broker note - initially fell around 8% but kept slipping and fell further on results which were actually OK. Although I like HAT I fear we could see same sort of dynamic here and whether best to get out now and buy back more cheaply in a couple of weeks.
Oddly, Shore are actually the house broker for HAT, which basically means it is a classed as marketing communication intended to promote the company - HAT must have provided them with the numbers.

[wad collector] 12/12/2023 15:18

Gosh is this the effect of one broker downgrade? Powerful broker!

[ntv] 12/12/2023 07:45

This is the extract taken from the interim results statement

Interim dividend increased 30% to 6.5p per share (2022 interim dividend: 5p per share), reflecting
the Board's growing confidence in the future prospects for the Group.

WTF!!!!

[lord loads of lolly] 11/12/2023 23:39

Davidosh - cosy paid for House broker services are of course entirely neutral in their research & conclusions.

HAT probably didn’t issue an RNS because, overall, nothing much has changed and they regarded it as little more than tittle tattle & mischief-making/white noise. I very much doubt the upward trajectory in recent dividend payments is about to change. Or even slow.

[davidosh] 11/12/2023 23:29

This should not be allowed as the house broker will have consulted with management first and are paid by them. All shareholders should be advised about this key change to expected profits and dividends not just Shore Capital clients.

It is price sensitive information and the share price has collapsed on the day of its release so the company should have announced this to ALL shareholders via RNS.

ShareSoc will no doubt look into this.

[ymaheru] 11/12/2023 23:11

Afraid not.
Money Shop etc are very much affected by minimum wage and not average wage. April will be a big kick in the teeth for low paying industries.

However, with unemployment still low, the economy is probably strong enough for price rises, so let’s hope HAT do that. Short term, it can lower profits, definitely.

[thorpematt] 11/12/2023 22:43

However, in case you want to see what the consensus forecasts are, here is a screenshot of the chart.

Now if this happens I guess Shore Cap will have to reverse their predictions?


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[thorpematt] 11/12/2023 22:31

Yeah it's not so bad when you view it like that.

I think you have to ask: Is this "news" a future structural issue which affects prospects?

Or

Is this more of a one-off adjustment

The way I see it:
The revenue numbers are actually adjusted UP. This says that the outlook for trading is better than previously forecast (and that was already a strong uptrend). So I think that looks fairly positve.

On the other hand, the negative impact of increased wage costs could be a one off impact... or it might be a continuing trend.

The specific issue is NLW and therefore the link to salary costs for employers such as HAT.

The context of that recent large increase (straight from the official source) is here: -





-----------------------------------------------------------------------------------
(If you have read that, this next bit is relevant) It's my view on what the policy makers are saying (and the folly therein)

Really it's something of a self feedback loop. If the policy is to raise NLM and NMW proportionally to predicted wage inflation, then you are simply perpetuating a trend. Depends whether the policy makers work this out really?

Of course in high inflation environments, nflation is fed by such policies. You get fuel on the fire in other words. And then there is only one way to control it. Higher interest rates. And then you get recession. So you gotta be careful.

In the end it's all a bit "economics". I think pawnbrokers will do fine in tricky economic environments. And I think sometimes you have to be careful of economists making predictions.

[jamesgreenbury] 11/12/2023 16:34

So trading on 5.6x CY24 EV with prospects of further growth

[izztre] 11/12/2023 15:51

Totally agree. Such an over reaction IMO

[riverman77] 11/12/2023 15:33

So still about 7x earnings even after downgrade - looks good value to me

[scotches] 11/12/2023 12:05

British pawnbroker H&T Group PLC (AIM:HAT) will face upward pressure on its operating costs when the National Living Wage goes up next April, but increased funding capacity and higher-than-expected book growth will offset this, according to equities analysts at Shore Capital Markets.

H&T’s additional £10 million funding facility announced in November “suggests to us that management is confident in the outlook for pledge book growth over the medium-term”, said Shore Cap.

One of the primary catalysts for healthy pledge book growth was the withdrawal of competition from the high-cost credit market in recent years, noted analysts.

Though Shore Cap left its year-end pledge book forecast unchanged at £126 million, 2024 forecasts increased by 4% to £143 million and 2025 forecasts increased by 7% to £156 million.

Yet increased funding and wage costs led Shore Cap to reduce its adjusted earnings-per-share estimate by 10% in 2024 and 13% in 2025.

Dividend growth was also pared back “to enable a better balance between shareholder distributions and retention”.

[jamesgreenbury] 11/12/2023 11:57

Would you be able to share the new forecasts?

[daskapital1] 11/12/2023 10:30

Downgrade of forecasts from Shore Capital in 24/25 based on increased costs.

[ntv] 11/12/2023 10:19

What is the news?
Fund raise?

[shallwe] 11/12/2023 10:15

Okay, what's going on?