I Read The News Today Oh Boy! 13-Aug-2019
Morning all!
H & T ( £HAT ) – 341p – £135m – PER 9.5
Interim Results For The 6 Months To End June 2019 – PBT up 7.9%, EPS and Interim Dividend up almost 10%, Net Debt down £2.1m from 2018 FY (now £11.6m), Pledge book is up 3.8%. Current trading is in-line with management expectations.
Looks overvalued here to me.
Marshall Motor Holdings ( £MMH ) – 139p – £109m – PER 5.9
Interim Results For The 6 Months To End June 2019 – Underlying Revenue flat, PBT and EPS down 5% or so however the Interim Dividend is up 32.6%. FY outlook remains unchanged although caution is mentioned (as expected).
I still remain wary of the industry although this would probably be (will probably be) my pick of the options as and when we see some kind of improved sentiment in the industry as a whole (sound management it seems, decent well covered yield and £120m or so of property on the Balance sheet). Latest Broker note this morning indicates negative EPS growth (-15%) forecast for next year and a slight increase (2%) for the year after.
Mears ( £MER ) – 271p – £299m – PER 8
Interim Results For The 6 Months To End June 2019 – In-line.
As I mentioned previously – Will keep an eye out for improvements here as 2019 progresses into what seems could be a more exciting 2020. Latest Broker note this morning indicates negative EPS growth (-2%) forecast for next year with an increase of 19% the year after.
Volution ( £FAN ) – 178p – £353m – PER 10.5
Trading Update For The 12 Months To End July 2019 – In-line.
Still for me, considering that Net Debt and 3% or so Yield, about fairly priced here (at best). Based on the latest Broker note this morning, in my opinion, looks about fairly valued on a 1 Year view and overvalued on a 2 Year view - Net Debt is quite high.
As always, all comment most welcome!
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11 comments
I've had positions in H & T (LON:HAT) and Ramsdens Holdings (LON:RFX) . I've found both of them disappointing. I know they should be counter cyclical, and with the price of Gold going up, again they should perform well. But this never seems to be reflected in the share price.
Today's H & T (LON:HAT) results look good on first look. But each of the business segments appears to have issues. Personal loans is the only one that seems to be doing well.
Wouldn't it maybe be the case that if there's a recession that the rise in Gold would perhaps be off-set by an increase in defaults on the loan book?
Possibly but don't pawnbrokers make their money when people default and can't claim their valuables back, hence they do well when the gold price goes up. Also there will be more people taking out loans.
I was coming more from the default on the loan book than on the "valuables" - However, even on the "valuables" surely they would also be harder to sell on as people have less money. Just kinda thinking and sharing that thinking out loud.
Well I think a lot of valuables would be gold and jewellery, this is why H & T (LON:HAT) has done well when the gold price is high. Often in times of trouble the gold prices go up, ok it could be just a UK recession so maybe out of step with the rest of the world. The unsecured loans is a concern I agree. I have sold just over half of my shares now.
I exited my small H & T (LON:HAT) position a while ago, due to concerns with their sub-prime unsecured loan business. I think that segment requires them to remain very disciplined with the lending and there is no way of me checking that. Admittedly, the reduced impairments and refocussing on loan quality are encouraging trends.
I also sold Ramsdens Holdings (LON:RFX), since they had about 42% of turnover from foreign currency sales to people going abroad on holiday & I am worried about the disruption risk.
So far this year, I've seen almost endemic use of contactless payments in Spain and Poland, just like here in the UK. In some cases, cash payment is no longer possible. With my Starling bank card, the loss on the transaction is <0.3%. Sooner or later, I expect contactless card payments to hit the foreign currency business.
Of course, both these stocks are on a reasonable PE ratio and in the current market, there is always something not quite perfect with a low PE stock. Perhaps I am being too cautious.
Did you read Graham Neary's report yesterday? I think it is pretty thorough. Not keen on this new system for the forum. I'm going back to the old system.
I have finally sold my holding in H & T (LON:HAT) this morning after buying almost two years ago and topping up last year. My share price return has been negligible... though at least it is a profit, compared to if I had sold when they were about 260ish. I consider them a poor play on the gold sector, I'd rather buy a good mining stock or shares in Golden Prospect Precious Metals (LON:GPM) (which I have bought this morning) which offer a broader exposure and a discounted NAV play.
Have to agree there - If you want a hedge or gold exposure why not go direct, especially when the valuation here does not look overly attractive (unless gold does rise )!
I have held H & T (LON:HAT) for a bit loner than 2 years so have done somewhat better and I topped up when they fell to 250p last year. But for a Superstock (2 years?) it has been disappointing but then quite a few of my superstocks have been similar. At least you get a dividend as well. Gold has already risen but probably too recent to see in these results. Holding gold direct has been good recently as price is high now and it's based in US$s, so a double bonus. I do hold some in ETFs.
I still think H & T (LON:HAT) is a good share to hold if we do have a recession, my concern is regulations changing. I also have a holding in Ramsdens Holdings (LON:RFX).
My morning smallcap tweet:
Essensys (LON:ESYS), Card Factory (LON:CARD)
essensys (ESYS) guides FY rev ahead of market expectations at £20.5m and adj EBITDA at least in line at not less than £3.8m.
Card Factory (CARD) H1 trading a little weak with LFL up 1.5%. Guides FY profit broadly in line with its previous expectations