REG - H&T Group PLC - Acquisition and Additional Financing

H & TAnnouncement

21/02/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240221:nRSU8210Da&default-theme=true

RNS Number : 8210D  H&T Group PLC  21 February 2024

21 February 2024

H&T Group PLC

("H&T" or the "Group")

 Acquisition of Pawnbroking Business and Completion of Additional Financing

 

H&T Group Plc, the UK's largest pawnbroker and a leading retailer of high
quality new and pre-owned jewellery and watches, is pleased to announce the
acquisition of certain assets of Maxcroft Securities Ltd ("Maxcroft"), for a
cash consideration of £11.3m. Maxcroft is a longstanding and successful
pawnbroking business based in Essex.

The Group is also pleased to announce £25m of additional financing to support
the future growth of the business, from Pricoa Private Capital, the private
capital arm of PGIM, Inc. ('Pricoa'), the global investment management
business of Prudential Financial, Inc. The additional funding will enable
future growth in the pledge book and investment in the store portfolio.

Information on the Acquisition

The main asset being acquired from Maxcroft is its pawnbroking pledge book,
amounting to c.£6.1m at the time of acquisition, inclusive of interest
accrued and after required IFRS 9 provisions. The underlying nature of the
acquired pledge book's collateral items is aligned with that of H&T's
existing pawnbroking business and consists primarily of gold, jewellery, and
watches, with a similar asset mix.

Maxcroft has traded for over 40 years from a  store in Ilford, Essex. H&T
will enter into a lease in respect of the store, which also offers foreign
exchange services, and will also be welcoming the five employees of the
business to H&T. The mean value of the acquired pledge loans is £4,063,
which is larger than that of H&T's mean pledge loan value of £423. The
Maxcroft pledge book redemption rates and yield are broadly in line with
higher value loans in H&T's current pledge book. The acquired expertise,
particularly in serving the needs of business owners utilising the pawnbroking
service for working capital purposes, presents H&T with an opportunity to
expand its reach into a different customer demographic with a requirement,
typically, for larger value pawnbroking pledge loans.

Information on the Additional Financing

The additional financing of £25m from Pricoa, comprises a note purchase and
guarantee agreement of £10m secured notes at a fixed rate of 8.37% that fall
due February 2029 and £15m secured notes at a fixed rate of 8.43% that fall
due February 2031.  Financial covenants are aligned with those of the
existing secured funding facilities with Lloyds Bank plc of £50m, and Allica
Bank Limited of £10m. This additional financing brings the total funding
facilities available to H&T to £85m, with all the secured funders ranking
Pari Passu.

At 31 December 2023, the Group had a net debt position of £31.6m (Dec 2022:
£2.8m), utilising £33m (Dec 2022: £15m) of the Lloyds RCF facility, £1.2m
(Dec 2022: NIL) of the Lloyds overdraft and £10m of the Allica term loan. The
Group had cash on hand of £12.6m (Dec 2022: £12.2m).

Chris Gillespie, H&T chief executive said:

"We are very pleased to be able to announce these two transactions, both of
which underline the Group's focus on growing and broadening its core
pawnbroking business and investment in the store estate. We are also delighted
to have further diversified and enhanced the Group's funding arrangements
through the relationship with Pricoa. We look forward to updating the market
further on the 12th March, when we announce our results for the year ended
31st December 2023."

 Enquiries
 H&T Group plc
 Chris Gillespie, Chief Executive Officer          +44(0)20 8225 2700
 Diane Giddy, Chief Financial Officer
 Shore Capital Ltd (Nominated Advisor and Broker)                +44(0)20 7408 4090
 Stephane Auton/Iain Sexton (Corporate Advisory)

 Guy Wiehahn/Isobel Jones (Corporate Broking)
 Alma Strategic Communications (Public Relations)  +44(0)20 3405 0205
 Sam Modlin                                        handt@almastrategic.com

 Andy Bryant

 Rebecca Sanders-Hewett

 Will Merison

About H&T

H&T is the UK's largest pawnbroker and a leading retailer of high quality
new and pre-owned jewellery and watches. H&T provides a range of simple
and accessible financial products tailored for a customer base which has
limited access to, or is excluded from, the traditional banking and finance
sector. H&T stores can be found on the high street in most major towns and
cities across England, Scotland, and Wales. At the end of 2023 H&T had 278
stores in total. For more information go to: www.handt.co.uk
(http://www.handt.co.uk) .

About Pricoa Private Capital

For nearly 100 years, Pricoa Private Capital has been partnering with a wide
range of corporations, sponsors, and institutions to provide valuable insights
and customised capital solutions that enable them to achieve their growth and
funding goals. In an industry where capital can seem like a commodity and
relationships often transactional, Pricoa Private Capital are known for
building enduring local partnerships based on a steady and patient commitment
to their partners' long-term capital needs. With regional teams in 15 offices
around the world, they manage a portfolio of more than $101 billion for their
partners (as of 31.12.23). For more information go to:
www.pricoaprivatecapital.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQEAKAEASKLEFA