H&T Group (HAT) investor relations material

Executive summary

• Reinforced position as UK's leading pawnbroker in 2024, with record lending volumes and new customer growth; pledge book growth exceeded expectations, especially in H2.

• Expanded store network to 285 locations, adding eight new stores and acquiring Maxcroft, which contributed to larger-value loans and FX business.

• Continued investment in technology, store refreshes, and operational efficiency to support growth and customer experience.

• Changed financial year end to 30 September, effective from 2025, to better align reporting periods and balance earnings seasonality.

• Strategy focuses on expanding core pawnbroking, investing in store estate and technology, and optimizing capital allocation.

Financial highlights

• Revenue rose 20% to £265.4m (2023: £220.8m); gross profit up 22% to £155.4m (2023: £127.2m), with core pawnbroking contributing 64% of growth.

• Profit before tax increased 10% to £29.1m (2023: £26.4m); diluted EPS up 5% to 50.9p; dividend per share up 6% to 18p.

• Net asset value reached £192m (2023: £177m); net debt increased to £54m (2023: £32m) due to pledge book and acquisitions.

• Operating cash inflows rose to £47m (2023: £39m); capex of £7m, including £4m for stores and £3m for IT.

• Return on equity at 12.2% (2023: 12.6%), slightly down due to higher tax; post-tax ROTE stable at 15.1%.

Outlook and guidance

• Anticipates continued strong demand for pawnbroking and small-sum, short-term credit, with retail and gold segments also forecast to grow.

• Retail margins expected to improve in 2025, supported by demand for pre-owned goods and sustainability trends.

• FX services remain resilient as travel demand persists; physical cash still in demand.

• Store expansion to continue, but at a more measured pace due to higher costs; focus on operational leverage and cost control.

• Targeting mid-teens post-tax ROE over the cycle despite higher tax rates; progressive dividend policy maintained.