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Pawnbroker H&T sees investing in digital technology as key to growth

“I think customers are seeing that we do offer value and that really is the answer,” said chief executive John Nichols
H&T
OVERVIEW: HAT The Big Picture
The firm has upgraded its websites and introduced click-and-collect foreign currency

Investing in digital technology has been a big focus for pawnbroker H&T GROUP PLC (LON:HAT) as more consumers shift online.

“It has to be,” said chief executive John Nichols, who stressed the importance of having a good e-commerce platform in this digital age.

“Fulfilment in store, absolutely, but you’ve got to be there online.”

As part of its investments in technology, the group has upgraded and revamped its pre-owned jewellery retail website www.est1897.co.uk and the main H&T site.

H&T has also expanded its retail and lending offering by introducing click-and-collect foreign currency, which is already proving popular. Nichols said there will greater investment in this area over the next five years to keep pace with rivals.

The company will make further improvements to www.est1897.co.uk and its customer relationship management system in the second half to make sure the experience for its clients is “as good as it can be”. The CRM allows the group to have a good view of its customers across all areas of the business through one platform.

Solid first half performance

Following recent digital enhancements, H&T made a solid start to the year with pre-tax profit rising to £1.1mln in the six months to June 30 from £5.5mln a year ago.

Revenue increased to £68.5mln in the first half from £57.7mln last year with growth across all its core businesses - personal loans, pawnbroking and retail. 

The net pledge book, including accrued interest, in the pawnbroking business increased to £47.8mlm from £44.0mln last year while the personal loan book shot up to £17.8mln from £10.0mln.

Reflecting its confidence in the outlook and a robust first-half performance, the firm raised its interim dividend to 4.4p from 4.3p.

“Steady pawnbroking growth, driven by increasing numbers of new customers and the continuing growth of the personal loans book, is pleasing,” Nichols said in the results statement.

“The personal lending book has increased by 19% since December 2017. We have maintained this growth while ensuring we remain disciplined around our credit-risk management practices. “

Nicholas said the broadening of the firm’s product suite into lower annual percentage rate (APR) categories has proven successful with 54% of its personal lending now out of the high-cost short-term credit category.

“This is important as we strive towards our vision of helping our customers to rebuild their credit rating,” he added.

H&T shrugs off tough retail market 

On the retail side, H&T has bucked the trend with sales of £16.4mln in the period, up from £15.3mln last year, due to strong demand for second-hand luxury jewellery.

Nicholas said sales this year have already reached the same level as the full year in 2017 despite a tough retail market. 

“I think customers are seeing that we do offer value and that really is the answer,” he said.

Looking ahead, the company said it would continue to seek ways to grow its pawnbroking, unsecured lending product and retail offerings by focusing on digital and online strategies to complement its store estate. 

Numis sees 'more to go for' with H&T

Numis has an ‘add’ rating and target price of 360p on H&T.

The broker said “with the pledge book continuing to show stability, and growth coming through from the personal loan book, we see more to go for”.

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H&T GROUP PLC Timeline

CN Research
August 15 2018

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“I think customers are seeing that we do offer value and that really is the answer,” said chief executive John Nichols

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