H&T Group (HAT) H2 2024 earnings summary

Executive summary

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

• Expanded store network to 285 locations, opening eight new stores, closing one, 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.

Financial highlights

• Revenue rose 20% to £265.4m; gross profit up 22% to £155.4m, with core pawnbroking contributing 64% of this growth.

• Profit before tax increased 10% to £29.1m; profit after tax up 5% to £22m; diluted EPS up 5% to 50.9p; dividend per share up 6% to 18p.

• Net asset value reached £192m; net debt increased to £54m due to pledge book and acquisitions.

• Operating cash inflow increased to £47m; capex of £7m, including £4m for stores and £3m for IT.

• Return on equity at 12.2%, down slightly year-over-year; post-tax ROTE stable at 15.1%.

Outlook and guidance

• Expect continued strong demand for pawnbroking and retail, driven by limited alternatives for small-sum credit and sustainability trends.

• Retail margins improvement anticipated to continue into 2025.

• Foreign currency and gold purchase segments expected to see further growth as travel and gold prices remain strong.

• Focus on operational leverage, cost control, and further store expansion; progressive dividend policy maintained.