H&T Group: DirectorsTalk interviews indicate positive outlook across key divisions

H&T Group plc (LON:HAT) is under the spotlight as Hardman & Co’s Analyst Mark Thomas recently discussed the company’s positive outlook across key divisions in an interview with DirectorsTalk.

The 2024 results for H&T Group were in line with expectations, showing a 10% growth in pre-tax profits. The capital value of the pledge book increased by 26%, retail sales saw a 27% boost, and forex profits grew by 11%. Looking ahead, the company’s core pawnbroking business is experiencing strong demand, leading to market share gains and potential acquisition opportunities. Additionally, consumer trends are favoring H&T’s multi-channel retail offering, with an expanding range of currencies contributing to forex profit growth. The high gold price is benefiting certain divisions, and the increase in store numbers is supporting all product lines. Economies of scale are expected to help mitigate uncontrollable cost growth.

The pawnbroking business’s robust growth stems from high demand for short-term small sum credit in a market with limited supply. The 26% increase in the pledge book in 2024 and the forecasted growth for September ’25 indicate sustained momentum. Moreover, the growth across different store sizes, locations, and customer segments bodes well for the business’s long-term sustainability.

H&T’s retail segment has seen significant growth in 2024, with customers showing a preference for lower-priced items. The company’s value for money jewelry offering, which includes both new and pre-owned products through various channels, has resonated with consumers. Margin expansion and consistent sales growth throughout the year underline the strength of H&T’s retail strategy.

In terms of forex operations, profits increased by 11% in 2024, driven by transaction volume growth. The company’s strategic moves to hold more currencies, introduce a click-and-collect service, and leverage insights from acquisitions have paid off. Margin expansion in gold-related activities and ongoing store network expansion further support H&T’s positive outlook.

Despite the favorable trends, H&T Group faces risks related to customer cash flow constraints, money laundering, and market sentiment towards the pawnbroking industry. External factors like inflation and increased costs pose short-term challenges, but the company is taking proactive steps to address these risks. Overall, Hardman & Co views H&T as a low-risk company, emphasizing the effectiveness of its risk management controls.

The company’s commitment to transparency and risk mitigation strategies positions it well for continued growth and resilience in the market. Investors can look forward to H&T Group’s sustained performance across its key divisions based on the positive indicators highlighted in the interview with Mark Thomas.