H&T Group (HAT) H1 2024 earnings summary

Executive summary

• UK's largest pawnbroker with over 280 stores, offering financial products to customers underserved by traditional banks.

• Profit before tax rose 12.5% year-over-year to £9.9m, driven by strong pawnbroking and retail performance.

• Retail jewellery and watch sales increased 27% to £29.3m, with margins improving to 30% from 28% in H1 2023.

• Maxcroft acquisition integrated successfully, expanding reach to business owners and enhancing FX operations.

• Interim dividend increased 7.7% to 7.0p per share, reflecting confidence in future prospects.

Financial highlights

• Income from operations rose 11% to £55.8m compared to H1 2023; operating profit at £12.9m.

• Net assets grew to £181m (Dec 2023: £177m); NAV per share at 416p.

• Diluted EPS increased 8.6% to 17.7p; EBITDA up 21% to £18.5m.

• Net debt increased to £49m (Dec 2023: £32m), reflecting investment in pledge book, inventory, and technology.

• Operating expenses rose 6.7% to £42.9m, mainly due to higher employee costs from national living wage increases.

Outlook and guidance

• Continued strong demand for pawnbroking expected as regulated small-sum credit remains constrained.

• Retail sales and margins expected to benefit from demand for pre-owned products and sustainability trends.

• FX services to see increased demand as overseas travel recovers.

• 8–12 new stores planned for 2024, with further expansion and store refreshes ongoing.

• Change of financial year end to 30 September from 2025 to better align reporting periods.