Research from Hardman & Co, Hardman & Co

Hardman & Co

Research from Hardman & Co

Investment research on quoted companies and funds

Hardman & Co is a multi-disciplinary financial consultancy and investment research firm, employing highly experienced analysts and professionals with a broad range of capital markets expertise. Our clients are public and private businesses as well as fund managers, ranging from start-ups to £1 billion+ market capitalisations. Hardman & Co offers corporate research & consultancy, serving the needs of both public and private companies. We produce gold-standard research with a global reach for trading and investment companies, as well as providing market commentary and analysis. In addition, we carry out a number of bespoke investment-related assignments, including due diligence on bond listings, assessments of private company valuations and other corporate advisory services. We engage with the market through traditional and digital media, offering illuminating video content on corporate management strategy, results communication, interviews and in-house sector discussion.

Equity Bottom-Up

<ul><li>H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m.</li><li>We have identified five key ongoing business messages, four of them favourable and one unfavourable.</li><li>The scale of the latter, though, means we have reduced our FY’24 estimates by £3m, but still forecast double-digit profit growth.</li></ul>

H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m.We have identified five key ongoing business messages, four of them favourable and one unfavourable.The scale of the latter, though, means we have reduced our FY’24 estimates by £3m, but still forecast double-digit profit growth.

H&T Group (HAT):1H’24 results: Four-one at half time, but the one wins

Thematic (Sector/Industry)

<ul>
<li>Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.</li>
<li>A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.</li>
<li>The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.</li>
</ul>


Feature article: Solid IICs, cash-consolidating REIFs Since the beginning of 2024, the share prices of Infrastructure Investment Companies (IICs) and Renewable Energy Infrastructure Funds (REIFs) have generally remained lacklustre, failing to recover from the losses experienced in 2023.
A significant factor contributing to this trend has been the sharp rise in interest rates since 2021, which has negatively impacted the sector due to the increased yields on “risk-free” 10-year gilts.
The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.


<ul><li>In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK.</li><li>Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.</li></ul>

In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is widely adopted across a range of cultures/geographies from China, India, Islamic countries to US, Europe and UK; iii) many UK immigrants are comfortable with pawnbroking from experiences in their country of origin; iv) the largest listed pawnbrokers trade at over 2x the PER rating of H&T with similar forward earnings growth; iv) it is generally a regulated business with largely favourable regulators’ comments, as in the UK.Pawnbroking has been available globally for centuries, debunking the misconception some have of it as a UK Dickensian practice.

Hardman & Co Research - H&T Group (HAT): Pawnbroking: the global perspective for H&T

<ul>
<li>In 2023, and for the second year running, the Hardman &amp; Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share indices.</li>
<li>This is quite unusual for healthcare stocks. Our Index covers 52 companies, only 15 of which saw an increase in their share prices in 2023, and four of those were on account of M&amp;A activity.</li>
<li>Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.</li>
</ul>


In 2023, and for the second year running, the Hardman &amp; Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share indices.
This is quite unusual for healthcare stocks. Our Index covers 52 companies, only 15 of which saw an increase in their share prices in 2023, and four of those were on account of M&amp;A activity.
Apart from the general economic influences, which have made institutions more risk-averse, there was a common knowledge that several companies were in need of additional working capital; so, share prices were marked down in anticipation of equity raises.


<ul>
<li>Feature article: Two worlds divided by a common language Summary Few people would deny that raising capital in 2023 and 2024 has been very challenging.</li>
<li>The key components of the market, the “two worlds” of corporates and investors, are nowadays often far apart in how they assess value – pre-COVID, this was much less of an issue.</li>
<li>This has resulted in frustration and inertia, which, on a sustained basis, can have a significant negative impact on companies and the economy.</li>
</ul>


Feature article: Two worlds divided by a common language Summary Few people would deny that raising capital in 2023 and 2024 has been very challenging.
The key components of the market, the “two worlds” of corporates and investors, are nowadays often far apart in how they assess value – pre-COVID, this was much less of an issue.
This has resulted in frustration and inertia, which, on a sustained basis, can have a significant negative impact on companies and the economy.


United Kingdom

H&T Group plc primarily provides pawnbroking services in the United Kingdom. It operates in six segments: Pawnbroking, Gold Purchasing, Retail, Pawnbroking Scrap, Personal Loans, and Other Services. The company also offers gold purchasing, jewelry retail, cheque cashing, unsecured lending, buyback, foreign exchange, money transfer, and prepaid debit card services. As of June 30, 2016, it operated 186 H&T Pawnbrokers stores and est1897 second hand jewelry retail stores. The company was incorporated in 2004 and is headquartered in Sutton, the United Kingdom.

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H&T Group Plc (HAT LN)

H&T Group (HAT):1H’24 results: Four-one at half time, but the one wins

H&T 1H’24 results saw pre-tax profits rise 12.5% from 1H’23 to £9.9m. We have identified five key ongoing business messages, four of them...

Hardman & Co

Hardman & Co Monthly: August 2024

The recent change in the UK government may bring some relief, with potential relaxations in planning approvals for new onshore wind and solar plants.

Hardman & Co

Hardman & Co Research - H&T Group (HAT): Pawnbroking: the global perspective for H&T

In this note, we put pawnbroking into a global and historical context: i) the global market is large, ca.$40bn, UK just ca.5%; ii) pawnbroking is...

Hardman & Co

Hardman & Co Monthly: July 2024

In 2023, and for the second year running, the Hardman & Co sector index declined, by 3.7%, underperforming both the FTSE 100 and the FTSE All-Share...

Hardman & Co

The Hardman & Co Monthly: June 2024

Feature article: Two worlds divided by a common language Summary Few people would deny that raising capital in 2023 and 2024 has been very...

Hardman & Co

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