H & T Group’s pawnbroking business and its growing ancillary gold buying and forex products have unique growth opportunities as other small-sum, short-term lenders withdraw from the market, suggests research group Hardman.
The pledge book was up over 50% in 2022 and the lessening of legitimate competition at a time of heightened demand means this increasingly dominant franchise is expected to fuel strong earnings growth.
“Having gained pawnbroking market share, and with the collapse of most other competitors, its strong balance sheet means it is structurally well-positioned to finance demand for small-sum, short-term credit. “
Using a range of valuation metrics, the average is 606p, against a market price of 436p, with a progressive dividend policy indicating a 2024 yield of 4.9%.