H&t Share Discussion Threads

[lord loads of lolly] 20/8/2024 21:17

Jm6783 - the house broker’s view is at odds with the CEO’s in that case.

Did you actually watch today’s webinar? It stated that mid teens ROE was still very much the target (though admittedly they wouldn’t be drawn when I asked about timescales).

Also, where do you get the lower overall margin from?

Chester9 - I don’t think moving the financial year end date has any whiff about it. They said they would continue to report comparatives. And once you’ve run a full year with the revised YE date, it makes no difference anyway as you’re dealing like for like again.

[jm6783] 20/8/2024 18:52

Agreed on that. Also, I thought they were increasing pricing on the pledge book. I understand that they might have also increased ‘business̵7; lending, which is lower margin, but I am nonetheless surprised to see overall margins falling rather than rising. All very badly communicated and disappointing.

[chester9] 20/8/2024 18:19

On Proactive Chris explains but uses the phrase - it seems the right thing to do..

[chester9] 20/8/2024 18:06

I don't like the moving of reporting. Usually the move is to make future results less challenging to achieve. .Get some bad news out and then set it up to beat it significantly. It may help with getting audits done but it has a whiff of something..Marks, Next, Tesco aren't shuffling the cards to hide the fact they are big at Christmas. We know they are.

[jm6783] 20/8/2024 16:12

Guys,

you seem happy with these results, but the house broker has just put through a significant multi-year downgrade and is now forecasting RoE to peak at only 12% in the years ahead. And this is certainly not the first downgrade we have seen over the past couple of years. I find it extremely disappointing given the very positive backdrop for the business - particularly the gold price.

[lord loads of lolly] 20/8/2024 13:44

bend1pa - agreed about forex, though it's a small part of the total business. And anecdotally, more Brits have been holidaying abroad this year. If true, there'd automatically be greater overall demand for forex.

I was more impressed by the growth in retail sales. And the fact the H1 pledge book has grown slightly, even stripping out the Maxcroft acquisition.

I think the higher & longer-lived redemption rate is the main thing that has caused a small sell off today. That & possibly the fairly meagre growth in H&T's interim dividend. But it wouldn't surprise me at all if this reversed out within the next week or so, after perhaps another day or two of wobbles. In fact, I'd be more surprised if it didn't. A fall back to the 370p mark or below is certainly possible. But if you're intent on topping up, I personally wouldn't leave it too long.

H&T is already my biggest holding now, so I'll just keep what I've got, hoping (& being reasonably confident) we won't get any unforeseens in H2.

[bend1pa] 20/8/2024 11:00

Solid set of results, and nice to see their foreign currency business side doing well.

This is one of a few AIM companies that hasn't screwed up badly over the last few years, and in this case is ticking all the right financial boxes. The Balance sheet is sound, and EPS increased by 8.6% in half year. What's not to like?

An share price of £5 looks a distinct possibility over the next 12 months or so. but were these to fall back to the the 370s, I'd be buying a lot more.

[lord loads of lolly] 20/8/2024 09:43

Anyone else tuning into their webinar at 12.00 noon today?

The results gernerally look solid to me. Not spectacular, but no real nasties either. Store numbers are up 8 (just under 3% of their total estate), so you'd expect a small uplift from this alone.

I'm pleasantly surprised by the significant pick up in retail sales (& to a lesser extent margin), as these were largely what clobbered sentiment post-Christmas 2023.

It's good to know pledge book redemption levels have now normalised. But less good that this was "later than anticipated".

I was expecting an interim divi of 7.5p, so 7p's a bit underwhelming IMHO. Especially if a 7.7% divi increase is supposed to reflect "the Board's confidence in the future prospects for the Group".

All in all, nothing to frighten the horses. But nothing to put rocket boosters under the share price either for now. That said, the share price had increased significantly over the past 2-3 days, so today's adjustment simply brings us back to where we were a week ago. The spread on this share varies enormously, making the current reported drop of 22p highly misleading & frankly meaningless.

[ymaheru] 20/8/2024 07:49

Results seem to be about where I’d thought they’d be.

I did notice the share price rising this last week and wonder whether it was worth exiting before the news (interims). Market seemed to expect amazing results. I would’ve bought back in again later, anyhow.

Outlook seemed quite positive and no real surprises, so I’m happy enough.

[chester9] 20/8/2024 07:11

It's fun and games for the mms mostly positive in first scan of results to worry about. .PE will start with a 6 next year if sales growth maintained.. The industry will never attract double digit PEs however. Ramsdens PE 8.5 so cheap by comparison..Let's see where it finishes

[pugugly] 20/8/2024 06:40

Results good - Canaccord note this morning price target 531p -
However Mr Market marked down 22p - Now why?

[aishah] 19/8/2024 15:23

Price strong of late. I've exited to rotate elsewhere.

[bend1pa] 19/8/2024 15:14

Interims due tomorrow (20 Aug).

[lord loads of lolly] 12/8/2024 10:57

saint or sinner - I don't think it's as black & white as that.

You can invest in a company long term, whilst still trading in & out of it periodically as market opportunities arise. Which is exactly what I've done here.

If I'd simply bought H&T back in 2019 & held ever since, I'd be sitting on a lot less than I am.

Anyhow, I'm glad you're a holder for now, but puzzled why you're quite so downbeat on results. Despite last Christmas's "blip", 2023 FY PAT was still up 42% YOY with a 13% dividend increase. And overall, current trading has been "in line with expectations". Which most people - with the exception of bend1pa it seems - would interpret as "on track".

Why aren't you "sure the management team are capable of delivering it" despite "the more than favourable trading conditions", given LY's 42% profits increase & current trading being on track?

[jm6783] 12/8/2024 10:23

I pretty much agree with that

[saint or sinner?] 12/8/2024 10:18

If you are buying with a view to selling within a few years I'd suggest you are a trader, not an investor. The latter simply finds a well run company at a decent price, buys a stake, then reaps the rewards over the much longer term.

With HAT the potential for long term gains is certainly there; I'm personally not too sure the mangement team are capable of delivering it though, particurly given the more than favourable trading conditions they have recently been enjoying.

I hold and have done for some time now, but the next set of results will no doubt determine whether or not I continue to do so.

[lord loads of lolly] 12/8/2024 08:33

Saint or Sinner - I think ALL shares fall into the trading category to a greater or lesser extent. In that you ideally always want to get in when the market undervalues them & exit when their valuation's overcooked. If you still have overall faith in management, you can then simply rinse & repeat.

It's not a question of some shares being investments, others being ones you trade. It's more down to understanding the sector, gauging the likely trajectory over the next year or two, then reacting to any unforeseen events.

I've done it several times with H&T. I bought in heavily between <£2 & <£3 when the FCA investigation was ongoing, as I thought the outcome would be relatively benign. I then top-sliced when the price rose above £5. Bought back that same stake (too early with hindsight) when it sank to £4.50. I bought again (limit order triggered) at 319p this January, after Christmas trading update disappointed. My next target exit price is £5.50, which I fully expect to be triggered within the next 12-18 months.

I'm not saying I (or anyone else) will always get it 100% right. Far from it in fact. But H&T is a volatile share. So even if you time things half right, you can make decent money from it. And to an extent, the yield helps smooth any decisions you may mis-time.

[saint or sinner?] 12/8/2024 07:33

Then you consider it a trading share and not an investment (particularly in the management)?

[lord loads of lolly] 11/8/2024 18:42

jm6783 - Let’s see how ROCE pans out this year. I doubt it’ll be far off mid teens. It’s not THAT far off even now.

Poorer than expected retail trading last Christmas clearly hit investor sentiment. You omit to mention the share price was regularly well above 425p prior to that.

And barring any hiccoughs this Christmas, I’m expecting a share price far closer to £5 than £4 (if not higher) by Jan 25.

If you think otherwise & you’re currently holding, I suggest you simply sell/reduce & move on.

In my experience, H&T isn’t a tuck away & forget type of share. You have to keep an eye on it, sell into the peaks & buy back in when it’s out of favour (assuming you still have faith in it longer term).

[jm6783] 10/8/2024 22:41

LLOL, the shares are trading at below book value, so how can you possibly argue that the market believes the company is earning an acceptable return on equity ?

Management stated they were targeting ‘mid-teensR17; RoE when they raised equity - at 425p a share - back in 2022. They are not getting near 16% RoE and the shares are meaningfully below 425p almost 2 years later.

So, with respect, I don’t understand what you are talking about.

[lord loads of lolly] 10/8/2024 19:44

jm6783 - it’s YOUR view that HAT isn’t earning “an acceptable return on capital”.

Not mine.

And not really the market’s, as the share price has held up reasonably well since January, given general market volatility.

[chester9] 10/8/2024 05:50

DirectorType Volume / Price ValueWalker BUY 9,965 @ 387.00p £38,564Gillespie EX 66,665 @ 0.00p £0 Giddy SELL 16,081 @ 416.61p £66,995Giddy EX 29,354 @ 0.00p £ 0Wood BUY 2,503 @ 399.00p £9,986 Walker BUY 5,035 @ 397.00p £19,988Buys and awards this year Giddy sold to cover tax. Their management view was to buy and hold

[jm6783] 09/8/2024 18:09

I do not think that arguing about whether ‘in-line’; results are acceptable or not is worth doing.

The key point to me is to understand why the largest pawnbroker in the country - by far - is not able to earn an acceptable return on capital, during what have been almost perfect conditions - a lengthy cost of living crisis and record high gold prices - and what management intends to do about it.

[lord loads of lolly] 09/8/2024 15:20

bend1pa - Jeez, so what are Directors MEANT to say if trading is in line with forecast?

That it isn't?

That it's disappointing their forecast was accurate?

That they'll try harder to give guidance that's wrong next time?

Sorry, but we'll just have to agree to disagree on this one.