Yes but that increased debt has been used to increase the pledge book (both through the existing business and through acquisitions). This in turn should drive higher returns going forward, albeit does increase the risk profile. |
"So the level of debt is not intrinsically bad, it _should_ be a sign of a growing pledge book and increasing future profits".
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I was referring to net debt, ie bank borrowings less cash, not what's in the pledge book. A few years ago HAT had no net debt. |
asagi - I'd second that.
Except - as I mentioned before - that their answers haven't always fully addressed my queries. Some have though.
I'll be pressing (again) for answers as to why Directors remain reluctant to buy shares in their own company, even at this - apparently - low level. It's not a great look. And I simply don't buy their excuse that Directors may not have the funds, given the amount they're earning. |
don't know why IR and exec comms are getting a kicking here. A shareholder myself, I have always enjoyed quick responses from CEO Chris Gillespie when I have emailed with a sensible question.
Or maybe my questions are the easy ones.
Whatever, this is NOT a management team with an attitude to ignore PIs. Bear in mind spam folders and corporate blacklisting, it's possible that they haven't received your communication at all.
Asagi (long HAT) |
My understanding is that they have £131m of money owed to them (the pledge book + interest) which they are charging 100% APR. Using cash and debt facilities charged at a rate of around 8-9%.
So the level of debt is not intrinsically bad, it _should_ be a sign of a growing pledge book and increasing future profits.
The only thing we don't know from the accounts is the value of the collateral held to secure the pledges, I always assumed this would be at least double the value of the loan (what with an APR of 100%).
Impairments (crystallised ones) should be relatively low for pawn broking.
I sold out when growth in profits did not seem to be following through from the growth in the pledge book, as much as I had anticipated.
I'm probably misremembering but I think this has traded close to NAV in the past? |
sigmund - I'd recommend registering for their next results webinar a bit nearer the time.
I've submitted several questions in the past and they have always read them out (and addressed them to some extent). I felt a few of their answers were a bit non-committal or evasive, but they tackled others quite well.
At least you get an instant response that way. And can see the whites of their eyes on-screen. Body language can often tell you more about how a company's faring than some carefully crafted response to a letter. |
Sigmund, I think it’s a win win win, so write to investor relations at least.
Win for consumer
Win for banks
Win for HAT |
if the equity is increasing, is the % of the debt therefore not decreasing, therefore less of a worry? i may have got this wrong and obviously future direction of IR always a concern
ps i decided to write an old fashioned letter to the ceo, it only cost a stamp, i have never done so before so looking forward to some form of banal response from their pa |
5.2% is nothing to be snorted at. especially if it's well covered. Their results have been consistently good over the past 5 years.
The only worry is their debt which has climbed somewhat alarmingly over the past 2 years. They need to watch that before it becomes a serious issue. I think that's what is spooking the market, although it's not at unsustainable levels...yet. |
Octopus still piling on the pain IMO. They continue to be the source of an overhang in a lot of stocks ATM. Not convinced its anything to do with the company. |
i'd take it easy on them. financially this looks a classic good value stock to me.
yield 5.3% covered 2.8* last year, increasing equity and increasing RoE, p/b 0.82. if share price falls i will invest more unless there is obviously something ominous going on.
most of their customers exist in a financial world far separated from most people on this chat. the jewellery subscription sounds a bit like a christmas hamper subscription. i would just buy a hamper if i wanted to, but their clients put £x away a week for one. it might work better than you think NTV?
perhaps i should write to the ceo ymaheru, but suspect it would just go in the bin, whoever listens to a PI? |
It is a subscription service for new jewellery service
It could prove to be another poor investment decision
That is why they couldn't raise the money for there last crackpot idea from shareholders hence the continuing fall in the share price
They could have easily started that business from scratch instead of wasting shareholders money
They |
Sigmund, what an idea. Have you put that to them? |
re the subscription service- do you mean the 10% off discount for your first online purchase? no problem with that, it is a retail-wide technique
pawnbrokers have traditionally grown by buying out single stores / small chains, when the owner wants to retire. no one seems eager to get into the business. i don't ever recall seeing a new independent pawnbroker open up anywhere. near me, i have only ever seen H&T or Ramsdens.
re new business, i do wish they would consider offering their sites to be these new banking hubs. they have the security that a bank needs. lots of the hubs were due to be put in post offices, but they seem to be endlessly closing down. |
I agree with you on that matter. It is not totally clear. But, I was pointing out to you that - contrary to your assertions - what they said was factually correct. |
So your conclusion is the statements are comparing apples with pears? If you're happy with an FD using smoke and mirrors to present numbers, then good luck to you. |
Ok, but the 6.1m was inclusive of accrued interest and the 6m was exclusive. Details ! |
£6.1M to £6M - if the Finance Director thinks that is a 9% increase then he needs to be collecting his P45, as do the other muppets on the board who clearly just have their snouts in the trough. |
@rivermqn, I think the increased pledge book from late 2023 will benefit FY 2024, so I’m still expecting nice EPS growth.
I bet they will increase rates a little. |
Bought back in here - should be benefiting from the rising gold price. Has massively underperformed RFX since around last August, which doesn't make sense at all. Last trading update sounded very positive with big rise in pledge book, albeit benefits from that probably won't be seen till next year.
I was wondering how much scope they have to increase rates to offset higher staffing costs. Looks like they charge between 5-10% per month (depending on size of loan) but not sure if there are any regulations that cap how much they can charge. |
Gold price soaring.
2022-23, rose 7% and gross profit from gold rose 39%
2023-24, rose 24%, so hoping gross profit will be up 50%++.
2024-25, rising further, up about 24% on 2024’s average.
Also, pledge book risen by similar percent to 2023. Diluted eps rose 31% in 2023, so with the similar pledge book growth and better gold could see even better eps growth (33%?).
Personally, I liked the maxcroft acquisition, as business lending is different and Maxcroft know that area (valuations of business assets).
About 4 weeks to wait for results, I’d guess. |
A subscription service ? Please explain. |
RFX hitting a new recent high .Not here though
Not surprising the share price continues to fall here |
CEO and finance director need to go |
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