H&t Share Discussion Threads

[scotches] 08/8/2013 12:00

Both HAT and ABM a little stronger recently. Perhaps it's related to AIM stocks now allowed in ISAs.

The Group expects to report its interim results for the six months to 30 June 2013 on 20 August 2013.

Will the 2012 3.8p interim divi be held?

[alphahunter] 23/7/2013 10:26

Weaker players to leave the market?


The regulator has revealed that 10 lenders have exited the payday lending market after it wrote to 50 firms to request they improve their practices.

The Office of Fair Trading (OFT) has received responses from 28 of the 50 lenders, with 26 of these providing audited reports as part of its crackdown on the sector.

It confirmed that The Payday Loan Company, which trades under several names including Cashnet, and Hamilton Management Services, which trades as Anfield Cheque Cashing Centre, have surrendered their consumer credit licences altogether.

Eight of the firms which responded have left payday lending but continue to operate in other business areas that require a licence.
The OFT could not name those companies which are still trading.

The payday lending sector was referred to the Competition Commission last month by the OFT after it raised concerns about the way firms compete in the market.

In addition to the 50 leading lenders, and since it published its final report in March, three firms engaged in payday lending have had their licences revoked, including MCO Capital.

The other two are cheque cashing businesses offering payday loans; B2B International UK Ltd and Loansdirect2u.com.

They had their licences revoked after it came to light that Neil Evans, an associate director of both companies, had been convicted for offences involving violence and fraud. Both businesses are based in Brighton.

The OFT also has three ongoing formal investigations into payday lenders, although it has declined to give further detail on these.

According to the OFT, the status of two businesses which should have submitted audited reports by this time is to be confirmed.

[alphahunter] 23/7/2013 10:24

Payday lender collapses into administration 4 July 2013

Payday lender Speed-E-Loans.com Ltd has collapsed into administration just months after publishing results which revealed the firm needed new funds to continue trading.

Administrators were appointed to the company today (4 July), with the case handed to Alan Simon of Accura Accountants Business Recovery Turnaround.

Speed-E-Loans.com once sponsored World Championship snooker players Ali Carter and Joe Perry, and made headlines in January 2012 for claiming demand for payday loans trebled over the Christmas period.

But the firm subsequently suffered a downturn with its latest set of financial results – signed off in December 2012 – revealing the directors were seeking a long-term debt facility to continue trading.

Since then Stuart Mitchell and Danny Miller – the only remaining directors listed in the results statement – have been terminated as directors of the business on Companies House.

In the accounts statement the firm's auditor, BDO, reported: "The directors are in negotiation for a long term debt facility to fund future development and expansion, however the drawdown of these funds is dependent on a number of conditions being met.

"These conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern."

The results also revealed that in August 2012 the company parted ways with former chief executive, Gary Miller-Cheevers, who is now listed as a director of Early Payday Loan Limited, a subsidiary of pawnbroker Albermarle & Bond.

His departure also prompted the settlement of an outstanding loan he had with the company, which the directors chose not to provide further information about on the basis it would be "seriously prejudicial" to do so.

By Alex Cardno

[scotches] 17/7/2013 11:37

The HAT market cap is now lower than ABM. With a significantly lower debt position and as yet no distress call to advise on how to run the business why should HAT be lower? Or is it all just a spiral downwards for both as shop pawnbroking withers.

The payday loan increased regulation should be a positive for the two leading quoted companies since it should eliminate rivals and enhances the core pawn product as a more affordable system of borrowing.

The May 24 trading update prepared investors for a reduction in profits related to a falling gold price. Whether that justifies the share price sell off we'll be better able to judge in a month's time when they report their 6 mths trading to end June. The price is back at the 2008-09 level and is even lower than the 177.5 open when they were admitted to AIM in May 2006.

[alphahunter] 11/7/2013 17:18

Bought a few a couple of weeks ago (at 200p, yep) just to keep the price flashing on my open trades screen.

Used to trade at 8-9x earnings including the speculative earnings from gold pop-up shops.

Now trades at 7-8x on core pawnbroking operations. #2 competitor without a CEO & CFO, run by "consultants". Government muscling in on rogue operators of pay-day cheques.

Only problem is the large transaction a couple of weeks back with no subsequent RNS. Shares not shifting on someone's books?

[qvg] 11/7/2013 15:46

on my buy list, but every time I go to press the button they keep falling further. How much lower will they go??? are we expecting a profit warning soon??

[cutlosses] 11/7/2013 10:49

I needed to "cut losses" on this when it was about £2.25 but buying under the NTAV and being paid to wait ( even if the dividend is cut) certainly makes it an interesting recovery situation.

[playful] 11/7/2013 09:11

Decided to buy H&T today as they are simply too cheap and the business model has certainly stood the test of time, so I don't see any worries buying below NTAV

[bench2] 01/7/2013 11:58

New NED purchase 5k @200p hardly a vote of confidence ..... probably circa 30% of his annual directors fees ...... hardly skin in the game , but better than nothing
no reason to buy yet . But close to 6% yield if divi held .

[outsizeclothes.com] 31/5/2013 01:31

Gold's rally today will help settle nerves too. $1415 as I write, so that's a $35 move in a day and a half. IF this lasts, (IF) and gold were to range $1400-$1500 H&T could be cheap, and I'd adjust my Sales, Pre-tax and EPS expectations up 20+% from my "worst case" detailed yesterday.
New figures could be £6m from Gold, Sales of £105m, Pre-tax £13m EPS 25p and a maintained or very slightly increased divvy. [ 12p? ]

But until Gold finds a definite floor, it's still a poor short-term outlook.

[cutlosses] 29/5/2013 15:25

OSC

Thanks for your interesting posts, I would usually say x3 profits would be where Imho the debt is high. Not too many companies around with net debt of just x2 profits but agree it is a sensible way of screening shares.

I do see the potential for a divvy cut though H&T may wish to keep up the record of increasing their dividend in recent years.

Pawnbroking is a very old business and will have seen volatily in the Gold price many times before. I paid well over £3 a share so I'm stuck with this one at the moment.

Some directors purchases a this point would be reassuring.

[outsizeclothes.com] 29/5/2013 10:12

If Gold carries on down the way it's doing, these could be the 2013 figures, - using the table format from above. I think as gold price goes down, sales will too as people lose their perception of value in luxury/high end jewellery.
Probably my figures are those of an extreme case, but I'd like to see what others suggest this year's figures might be.

Year Pledge Stores PSC NetDebt Gold Sales Pre-Tax EPS basic

2013 53.0m 192 30.0m. 27.0m 4.0m. 85.0m. 9.0m. 15p

2012 51.6m 186 28.4m 27.6m 12.0m 129.7m 17.0m 35.92p

2011 46.6m 160 26.7m 29.3m 17.2m 125.5m 23.5m 51.12p

[outsizeclothes.com] 29/5/2013 00:12

High on an ongoing basis relative to a deteriorating earnings and profits situation.
Retail sales are falling. Gold price still falling ( $1380 as I write )
Year end: - Purchase margin is down 26%
ROCE is down even more from 26.2% to 17.6%
Profits down from 23.5m to 17m with possibly sub. £13m for this year.( counting for 20+ new stores as not yet generating profits, and possibly now several of the Goldbars )

When net debt passes twice profits I'd count it as getting high. Management might too, and trim the divvy rather than shelve growth plans.

[cutlosses] 24/5/2013 13:39

OSC

On what basis would you say that the debt is high?

[outsizeclothes.com] 24/5/2013 13:26

11 months ago I warned of negative read across from ABM to H&T. The board, yet again, have been slow to release news that the dogs in the street knew already from the read-across.
As well as being tardy about Gold profits being hit, they have said nothing about the OFT and ongoing pay-day profit situation.
Combine 2 areas of falling profit with their debt, which is large, and you have the makings of a 'prudent' divvy cut because of reduced earnings, despite core pawn-broking going reasonably well.

[bench2] 24/5/2013 08:44

Most HAT holders were expecting a negative statement re gold , but the board have been sitting on this since the ABM downgrade . In my view they should have cleared the air at that moment with a statement until leaving shareholders in limbo . We all know they have a solid pledge book and have been running the traditional pawn broking biz better than ABM , but the unknown was gold . At least they have given us a pre tax formula re gold price , but vague statements about ability to hedge do not help . If you are a bear of gold price in £ then avoid for the short term . If you feel gold price has fallen far enough and will recover then 225p a reasonable entry point ( 225p the low point in 2010 , 152p the low in 2009 )

[pugugly] 24/5/2013 08:29

Humm:- Trading profit likely hit to tune of £2 million. Minimal volume response - Some buying at 240p - Opportunity or bear trap ?

Not sure - Thoughts ?

[cutlosses] 27/3/2013 16:51

Some good buying today yet the share price drops by 4%

Hard to comprehend.

At least a nice dividend is in the pipeline.

[mikey62] 08/3/2013 12:46

The pay day loans situation actually helps HAT.

[cutlosses] 08/3/2013 10:19

The market has reacted well to the results this week.

Regarding pay day loans, the following extract highlights what payday loans contribute to profits (total net profit £17 million

"Cheque Cashing
Cheque cashing income fell from GBP4.9m to GBP3.7m due to the reduced number of cheques in circulation. Cheque cashing now contributes 6.0% of gross profit (2011: 7.5%).
The Group's Payday Advance product, contributing two thirds of total cheque cashing profit, has accounted for GBP1.0m of this decline. The product was designed to operate with the benefit of a cheque guarantee card acting as part of the Group's underwriting criteria, but since the banks have gradually stopped issuing cheque guarantee cards, the Group's Payday Advance loanbook has experienced a steady decline. Countering this decline, the Group has since widened acceptance criteria to those customers with only a debit card, and has accordingly developed its own credit scoring and underwriting criteria. While acknowledging that this market represents a significant opportunity for the Group, the Board is seeking to improve the bad debt metrics and move to a more flexible and customer friendly product before expanding the loanbook.
The OFT recently conducted a compliance review into the payday lending"

So pay day loans account for about 4% of profits ( 2/3rds of 6%)

[scotches] 06/3/2013 17:07

CL: The articles on this today have condemned the companies which compete on just how fast they can get the cash to your account. The OFT would prefer if companies competed in relation to the cost of the loan.



The HAT rates seem to compare favourably with Wonga etc.

£100 for 30 days from HAT is payback £120.

£100 for 30 days from Wonga is payback £136.72.

HAT describe themselves as, "cheapest pay day lender"

[cutlosses] 06/3/2013 15:40

Scotches- Do you think this is a serious problem for HAT?

Do we know what percentage of revenue is from payday loans?

Perhaps some more control of the pay day loan sector would be good for the core pawnbroking side in the long run anyway.

[scotches] 06/3/2013 11:43

OFT review says entire payday loans sector has problems, with lenders' revenues heavily reliant on customers failing to repay their loans on time.

[mikey34] 07/1/2013 17:13

Quite happy with the update.....I think the mkt has been pricing in quite a dip in gold price and then a subsequent fall because of our exposure to it.The fact is the pawn business is still the driver here,and everything on that front looks fine.Undervalued on that pe.