Research from Hardman & Co, Hardman & Co

Hardman & Co

Research from Hardman & Co

Investment research on quoted companies and funds

Hardman & Co is a multi-disciplinary financial consultancy and investment research firm, employing highly experienced analysts and professionals with a broad range of capital markets expertise. Our clients are public and private businesses as well as fund managers, ranging from start-ups to £1 billion+ market capitalisations. Hardman & Co offers corporate research & consultancy, serving the needs of both public and private companies. We produce gold-standard research with a global reach for trading and investment companies, as well as providing market commentary and analysis. In addition, we carry out a number of bespoke investment-related assignments, including due diligence on bond listings, assessments of private company valuations and other corporate advisory services. We engage with the market through traditional and digital media, offering illuminating video content on corporate management strategy, results communication, interviews and in-house sector discussion.

Equity Bottom-Up

<ul><li>H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m.</li><li>We have identified five key ongoing business messages, four of them favourable and one unfavourable.</li><li>The scale of the latter, though, means we have reduced our FY’24 estimates by £3m, but still forecast double-digit profit growth.</li></ul>

H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m.We have identified five key ongoing business messages, four of them favourable and one unfavourable.The scale of the latter, though, means we have reduced our FY’24 estimates by £3m, but still forecast double-digit profit growth.

H&T Group (HAT):1H’24 results: Four-one at half time, but the one wins

<ul><li>In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK.</li><li>Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.</li></ul>

In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK.Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.

Hardman & Co Research - H&T Group (HAT): Pawnbroking: the global perspective for H&T

<ul><li>In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities.</li><li>These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%.</li><li>Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2023.</li></ul>

In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities.These results reconfirmed both, with the pledge book up 28% and net pawnbroking revenue up 36%.Like many in the retail space, H&T faced the challenge of customers focusing on lower-value, lower-margin items in the key run-up to Christmas 2023.

H&T Group (HAT): Core franchise build, short-term retail noise

<ul><li>In our 15 March 2023 initiation, Pawnbroking royalty, with strong, profitable growth, and later notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities.</li><li>Subsequent to the initiation, we had raised our pledge book forecast twice, and we do so again with the latest trading statement.</li><li>In this note, we explore how pawnbroking growth is a key driver to the retail offering, pawnbroking scrap and gold purchase, with varying degrees of time lag.</li></ul>

In our 15 March 2023 initiation, Pawnbroking royalty, with strong, profitable growth, and later notes, we have highlighted the strong market for pawnbroking and why H&T, as the market leader, is uniquely placed to take advantage of these opportunities.Subsequent to the initiation, we had raised our pledge book forecast twice, and we do so again with the latest trading statement.In this note, we explore how pawnbroking growth is a key driver to the retail offering, pawnbroking scrap and gold purchase, with varying degrees of time lag.

H&T Group - Growing pawnbroking core will drive other services

Thematic (Sector/Industry)

<ul>
<li>Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.</li>
<li>A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.</li>
<li>The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.</li>
</ul>


Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.
A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.
The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.


United Kingdom

H&T Group plc primarily provides pawnbroking services in the United Kingdom. It operates in six segments: Pawnbroking, Gold Purchasing, Retail, Pawnbroking Scrap, Personal Loans, and Other Services. The company also offers gold purchasing, jewelry retail, cheque cashing, unsecured lending, buyback, foreign exchange, money transfer, and prepaid debit card services. As of June 30, 2016, it operated 186 H&T Pawnbrokers stores and est1897 second hand jewelry retail stores. The company was incorporated in 2004 and is headquartered in Sutton, the United Kingdom.

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H&T Group Plc (HAT LN)

H&T Group (HAT):1H’24 results: Four-one at half time, but the one wins

H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m. We have identified five key ongoing business messages, four of them...

Hardman & Co

Hardman & Co Research - H&T Group (HAT): Pawnbroking: the global perspective for H&T

In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is...

Hardman & Co

H&T Group (HAT): Core franchise build, short-term retail noise

In our 15 March 2023 initiation, 'Pawnbroking royalty, with strong, profitable growth', and subsequent notes, we have highlighted the strong...

Hardman & Co

H&T Group - Growing pawnbroking core will drive other services

In our 15 March 2023 initiation, Pawnbroking royalty, with strong, profitable growth, and later notes, we have highlighted the strong market for...

Hardman & Co

Hardman & Co Monthly: August 2024

The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.

Hardman & Co

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