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  • Writer's pictureMark Watson-Mitchell

H&T Group – ready to move up within next three weeks or so

On Tuesday 7 March the UK’s largest pawnbroking group will be reporting its results for the year to the end of December 2022.

H&T Group (LON:HAT) is expected to announce a pre-tax profits advance of over 90% in the year, while taking its earnings up 75%.

That rebound is expected to be continued in both this year and next, leaving the group’s shares looking significantly under-rated.

The Business – well-established roots

The group’s origins can be traced back to 1897 when Walter Harvey and Charles James Thompson registered their South-East London-based business.

Since then, it has grown substantially, today having over 267 stores within its operational estate.

Apart from pawnbroking, the company’s ancillary services include foreign exchange and money wire transfer services, while its jewellery retail offerings are focused on pre-owned and new jewellery, along with pre-owned watches.


A pawnbroking loan is a secured loan with a term of six months and is not the same as a customer seeking a loan product from a traditional provider of credit. H&T lends to its customers against the assessed value of the item they wish to pledge, which is typically preowned jewellery or watches.

It concludes a consumer credit agreement with the customer, charging a daily interest allowing customers to repay their loan at a timing of their choice and only pay interest for the period for which they use the loan. Those customers are always only liable for the amount of their loan and have no liability beyond the value of the goods.

In the event that the pawnbroking loan is not repaid, and the pledge item is not collected by the customer, the item is sent to auction. If the item is sold at auction and if the proceeds are more than the value of the loan, the surplus (less auction expenses) will be remitted to the customer.

H&T works closely with customers experiencing financial difficulties and will support them if the right outcome is that they retain their items rather than them being forfeited. It is unlikely that the item will be sold at a loss for H&T as the typical loan-to-value is around 65%. If the item is not sold at auction, it will be returned to H&T who will then assess if the item is suitable retail stock. If not, the item will be scrapped.

Jewellery Retail

H&T offers a range of pre-owned as well as new jewellery and watches for sale.

Its collection of pre-owned watches includes timeless classics from luxury watch brands, and it takes pride in the authenticity and quality of its pre-owned items. All the jewellery and watch items undergo strict scrutiny by the group’s team of expertly trained gemologists, its watch team, and horologists who test for timekeeping and undertake extensive refurbishment procedures to ensure each item meets the highest standard of quality.


Customers can access funds by choosing to sell items, mainly pre-owned jewellery and watches, rather than to use the items as a pledge for a pawnbroking loan. This is a fast and easy process that can be concluded both in store and online. The online portal allows group customers to complete an application form and receive a quote quickly.

Gold purchasing has remained buoyant with the high sterling gold price continuing to support scrap margins.

Foreign Exchange

The company offers Currency Exchange Services which are available across the store estate. The return of overseas travel, particularly over the last summer, continues to drive growth in FX, with revenues having been maintained at double the levels of 2021.

Money Wire Transfer

In partnership with Western Union, H&T support its customers in transferring money worldwide. The Western Union infrastructure allows it to provide safe and efficient money transfers from all of its stores.

Trading Update – 18 January

The group reported that its trading performance had remained strong through the fourth quarter of the year, continuing the momentum that had been seen across the business throughout the year.

Demand for pawnbroking loans was particularly buoyant, resulting in the group’s pawnbroking pledge book growing to around £99m as by the end of the year (£66.9m).

The company stated that demand for pledge lending in early January 2023 had remained strong. That is a consequence of two main factors - a reduction in the number of lenders offering small-sum short-term credit and also the squeeze on disposable incomes as a consequence of rising inflation. This demand is not expected to abate in the short to medium term.

Retail sales in the important pre-Christmas trading period were robust. December was a record sales month after a slightly quieter-than-anticipated November, with watch sales being a particular December highlight. The market for pre-owned jewellery and watches remained an attractive growth segment of the overall jewellery market. Full-year retail sales rose over 30% to some £48m (2021: £36.2m).

Foreign exchange and other services continued to perform strongly.

At the end of December, the Group had 267 stores (257) while a further nine locations are expected to be opened in the first half of 2023.

The Equity – good institutional backing

There are 43.85m shares in issue.

Larger holders include Octopus Investment (11.56%), Fidelity International (9.96%), Close Brothers Asset Management (8.71%), Canaccord Genuity Wealth Management (5.64%), Artemis Investment Management (4.92%), JP Morgan Asset Management (4.39%), Stichting Value Partners (4.28%), Hargreaves Lansdown Stockbrokers (3.73%), Interactive Investor (3.65%) and Premier Miton Investors (3.29%).

Broker’s Views – anticipating further strong growth

Analyst Gary Greenwood, at the group’s NOMAD and Broker Shore Capital, has a ‘fair value’ of 580p on its shares.

He considers that H&T Group is an excellent company that is well positioned to deliver further strong growth.

Guided by the recent Trading Update, he goes for £19.1m of adjusted pre-tax profits for last year, against £10.0m previously.

He estimates that earnings will show through at 36.3p (20.8p) and the dividend at 15.0p (12.0p) per share.

For the current year he looks for £32.6m profits, 57.9p earnings and a 23.0p per share dividend.

Looking into 2024 his figures suggest £39.2m profits, 69.6p earnings and 28.0p of dividend.

My View – 500p within four months, then going higher

This company is another money machine that is currently undervalued, with its shares trading at 446p they are on just 12.3 times historic earnings.

For this year they rate on only 7.7 times earnings, yielding a potential 5.2%.

And for next year they are on an extremely low 6.4 times, hopefully yielding a handsome 6.3%.

Two weeks ago, I strongly urged readers to seize the cheap buying opportunity when the shares were just 429p, since when they touched 459p, before closing on Friday night at 446p.

My 30 January article suggested that the shares will be up to 500p within four months, if not sooner.

I stick firmly to that view and eagerly await the results in just over three weeks.

(Profile 06.07.22 @ 332.5p set a Target Price of 400p*)

(Asterisks * denote that Target Prices have been achieved since Profile publication)


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