After the market closed H & T (LON:HAT) announced the acquisition of 113 pledge books from Albemarle and Bond (Speedloan Fiance Ltd) for £8m funded from cash and existing bank facilities. The acquisition is scheduled to complete on 7th October.
The announcement further states that H & T (LON:HAT) "continues to trade well and ahead of the Boards expectations whilst also benefiting from the Group's expanded core pawnbroking and retail business and the recent increase in gold price." There is also positive comment alluding to recent acquisitions and their integration into the Group.
It will be interesting to see how the share price reacts tomorrow. One would also anticipate a positive read across to Ramsdens Holdings (LON:RFX), albeit its pawnbroking activities are smaller than H & T (LON:HAT), counterbalanced perhaps by growth in the retail business.
I noticed that one too jonno. Not sure if Graham is in the chair for tomorrow's SCVR but I'm sure he will have a view at some point.
I'm not sure what constitutes an individual "pledge book", but I'm guessing that 133 pledge books represents the pledged from 113 stores?
The statement from A&B, "This agreement with H&T is a good outcome for customers" implies to me that this is the entirety of the A&B pawnbook.
My first thought was that £8m sounds paltry, but of course it will represent some fraction of the remaining loan amounts outstanding and some of these are probably quite short duration, although potentially H&T can roll them over or get repeat business in the future.
If I am right and this is all of the A&B pawn business, then there is probably not so much read across to Ramsdens. The loss of a competitor of course, although in reality H&T have acquired the customers without any of the management overheads etc.
Assuming H&T are able to sooth all of these customers then it will defend the reputation of the Pawnbroking industry, which I did feel was somewhat at risk.
I am feeling quite please that it has a top up on H&T rather than buying Ramsdens that I plumped for when the news of A&B's troubles broke; which almost certainly means 'the market' will decide that Ramsdens are the greater beneficiary, but I don't understand how.
We will see.
