H&t Share Discussion Threads

[muzmanoz] 08/8/2023 11:38

Shore capital reduced adjusted eps forecasts to 53.7p this year and 69.8p next year. Still seems good to me!

[lord loads of lolly] 08/8/2023 10:28

rimau1 - I agree. The "negatives" highlighted by JM were a) well trailed & b) indicative of an expanding, profitable business. Investment in extra stores & an upgraded IT system will boost sales & profits within the year. HAT has always had a progressive dividend policy that's well covered (> 2x). Against this backdrop, an increased level of debt doesn't concern me in the slightest.

[rimau1] 08/8/2023 10:22

I was able to top up at £3.92 despite the spread, buying below (a quality liquid and easy to value) book value is just a silly market anomaly that i rarely manage to take advantage of. Even now at £4.15 its bang on NAV.

[rimau1] 08/8/2023 08:41

JM, thats a very negative take. I could turn your arguments around quite simply. The increase in gross debt corresponds to the increase in the pledge book and store roll-out. The placing was to fund the business growth and was a pre condition to increasing the RCF to £35m and then to £50m. Increasing dividends after these events is not funded by the raise but funded by the growing business. Imagine the reaction if HAT had given a positive business outlook but held or cut the dividend!!!

[jm6783] 08/8/2023 08:34

Results a bit below estimates unfortunately. Costs above where expected and retail margins below. Pledge book growth excellent. However, management choose to raise dividend by 30% when they are already cash constrained - gross debt already at 30m compared to 15m at year end and increased debt facilities of 50m. They did a rights issues in September. Basically, they are issuing shares in order to pay these dividends and hence, diluting shareholders. With the strong growth in the pledge book, it’s possible they will have to issue more shares unless they increase debt facilities further. No wonder the shares are only trading at book value

[wad collector] 08/8/2023 08:14

Well so much for a 5% share price rise, already down 4. Yep I don't understand this market either Izztre.

[rimau1] 08/8/2023 08:12

Yeah i am happy with my eps projection of 39p, i will be very happy if we exceed this. Remember also store roll outs are loss making until year 2. I suspect your 50p+ is out of date before the jump in inflation but happy if you are right.

[asagi] 08/8/2023 08:08

H1 reported EPS was 16.3p, +24.4% on H1 2022.

2022 FY was 37.2p.

24.4% growth on 37.2p is 46.3p.

Asagi (long HAT)

[izztre] 08/8/2023 08:04

Agreed, just don't understand this market

[ntv] 08/8/2023 08:02

You are having a laugh with eps of 54p. No chance
Happy with the dividend increase
That with the payout increase from PHSC has seen the yield on the portfolio increase rapidly recently

[wad collector] 08/8/2023 07:59

The only negative I can see is a rise in the net debt. In a very result-critical market it would seem harsh to highlight this and drop the price further from a one year low. I reckon on a 5 percent or so rise today...close around 420?

[asagi] 08/8/2023 07:50

Hi rimau1,

"I have a very prudent full year eps of forecast of 39p so we are trading at a smidge over 10x if cost inflation does fall back there is upside risk."

brokers are forecasting more like 54p.

Asagi (long HAT)

[asagi] 08/8/2023 07:46

online jewellery, travel money and pledge book all at record levels.

Results here:

Asagi (long HAT)

[rimau1] 08/8/2023 07:46

I can’t see anything material in the results or outlook to warrant the recent fall here. HAT are aggressively growing the pledge book and as a result net debt has increased accordingly. The key points in the results for me were (1) yes costs are higher than expected in H1 but lower cost inflation expected in H2 (2) the UK trading environment is positive across the entire product range (3) net 6 new stores opened with more planned in the second half. The pledge book at £115m will likely exceed analyst expectations of £115m-£116m FY. The only negatives are the well flagged cost inflation, associated margin contraction and pledge book customer behaviours of paying back loans quicker. The latter is not material i was just trying to find amber flags!
I have a very prudent full year eps of forecast of 39p so we are trading at a smidge over 10x if cost inflation does fall back there is upside risk.

[izztre] 08/8/2023 07:35

Seems to me like a very good interim update. however impossible to predict how the market will react. Good Luck holders

[ymaheru] 07/8/2023 20:59

Yes, I see that they could borrow for that reason, similar to banks.

I found their net debt was £2.8mn at end of 2022, using £15mn of the facility (£12.2mn cash at hand), but they had net cash of £17.6mn the year before. So, they don’t always seem to borrow to lend, though I can see how this year might be more lucrative.

Overall, not much debt (costs £0.3mn if they carry that debt all year). That shouldn’t be enough debt to cause negative sentiment for HAT if the market was sensible.

[zchaka5] 07/8/2023 20:07

They borrow to effectively lend at much better rates of return. They can fund a larger loan book and scale their profits. Looks like a great time to top up as that loan book will be backed in gold/silver/other high value goods and a bad debt is reversed when a pledge is retained.

[ymaheru] 07/8/2023 16:44

Hi LLOL

How much is this finance facility for, please?
I didn’t know they were borrowing.
I thought they loaned out their own cash.
I don’t follow it closely enough, obviously!

Thanks in advance

[lord loads of lolly] 07/8/2023 16:30

Yes - weird price movement around 3.45pm today, which has since largely reversed out. The recent interest rate rise & HAT's increased finance facility may have spooked a few, though it's hard to see why. H&T will simply increase its loan rate to compensate the former. And the latter is intended to fund its growing pledge book & update stores, both of which look like sensible uses of cash. Rising interest rates & stubborn inflation might increase its overheads & slow its jewellery sales. But the economic backdrop will also lead to more customers seeking short term loans. And the dismal UK weather should boost its Forex sales. I nearly added at 396p today, but left it too late, so I've decided to wait & see what tomorrow's results bring. Can't imagine there'll be any nasty surprises though, as they issued a positive TU just a few weeks ago.

[prettygreen] 07/8/2023 15:14

Tree shake before results ?

[ymaheru] 03/8/2023 19:58

Hi NTV

Yes, aware.
I never saw any real benefit in short term loans. HAT’s bad debts plummeted when they stopped those. I think they were just in that space cos it was eroding their normal lending. So, Government crackdown has been a blessing.

[ntv] 03/8/2023 19:22

ymaheru
They don't do short term loans anymore

[izztre] 03/8/2023 15:34

A great buying opp as the last update was very strong and in the current climate I can only see this going from strength to strength. Much less risk than many other companies

[ymaheru] 03/8/2023 13:50

Yep, pledge book was up 28% in trading update, to £128 million.

Also, jewellery sales were also up.

Finally, FX volumes were up 19%, which will probably continue as airlines have had a strong season.

Net debt only £2.7 million, so don’t see that being any big drag.