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Looks like a good result to me and company can now move forward without this hanging over its head.
Agreed - and I doubt their provision will be too far out from what they've said. Equally importantly, it sounds as though the FCA is nearing the end of its investigation. There's nothing investors like less than uncertainty. So drawing a line under this episode should help improve sentiment.
The figure that most caught my attention was the relatively small provision of £2.1M 'raised ahead of the anticipated confirmation by the FCA that HAT can proceed to implementation of required past book review and subsequent redress programme'
Should the above figure be sufficient to draw a line under this chapter then a significant re-rating could ensue in my opinion.
NAV of 348.9p per share at 31 12 21 versus a closing share price on the same date of 295p. So trading at a discount of over 15% (though that may be the norm for a business like this?). Results greeted positively (for now at least), with today's share price up 4.5% as I write.
Still digesting these results, but they look OK to me. The proposed 12p full year dividend should provide a level of confidence & support. Ditto comments on the FCA review, suggesting it's FINALLY nearing an end and that a £2.1M provision should suffice.
Cheers pal, I appreciate that. BILN looks interesting at a quick glance.
Nor am I but if you google Bargain Shares for 2022 you should be able to read it in full. In case not, the list is:
TAVI
HAT
VCAP
TEK
BILN
CIC
BOOT
SLP
They're all likely to jump tomorrow but some/all might drop down again after the initial enthusiasm.
Laughton,
What else did he recommend? I’m not a subscriber you see.
Cheers
One of Simon Ts 2022 Bargain Shares for 2022 so expect a jump in the morning.
As you can tell, I like this share. It kinda counter-balances some of the racier "growth" shares I also hold (not all of which have lived up their billing recently!). Covid notwithstanding, it's been profitable every year over the past 5 years and - with one exception - has always paid a decent dividend. It's also got an excellent average Trustpilot score of 4.9 out of 5, from well over 4000 reviews in all. And let's face it, pawnbrokers are hardly likely to earn praise easily from their customers, who will often be going through tough times. I think that speaks volumes - over all it strikes me as a cautiously-run business, that doesn't take its customers/paymasters for granted.
One other thing in H&T's favour is its yield -currently back over 3%. Try getting that from any bank or building society!
HAT is a reasonably defensive, counter-cyclical share. The price has held up well since early Oct, unlike recent falls in the wider markets. Once the FCA investigation FINALLY concludes, I expect a further re-rate in HAT's share price. Can't see the regulator clobbering them any harder than is already priced in. And with the cost of living soaring, HAT's services will - sadly - be ever more in demand.
This looks like great value
tend to agree
Simon Thompson very positive write up in IC today following yesterday's results. His conclusion:-
"a re-rating to my 400p fair value estimate looks firmly on the cards. Buy."
https://www.investorschronicle.co.uk/ideas/2021/08/09/on-the-bargain-hunt/
All looks fine ... anyone shaken out by the dips will probably regret it in the medium to long term.
You also have to factor in that they are running down their personal loan book. The net personal loan book was worth £20M in 2018 which was equal to 2/5 the value of the pledge book, this was reduced to £16M in 2020 then £6M last year and is set to reduce further again this year as they phase these out (unless this changes with a change of CFO).
Today's 6 month interim results look pretty good. Though it's harder to compare with 2020 in a way, as both years had different periods affected by lockdown. I'm particularly pleased the dividend has significantly increased (LY: 2.5p TY: 4.0p) and see this as a big vote of confidence from management. On the downside, the outcome of the FCA review sounds as far off as ever: "Further updates will be provided in due course although it is not currently possible to put a timescale on completion of the review by the FCA, nor completion of the subsequent testing work by the skilled person". This - and any wobbles in pledge lending bounceback - will be the main potential headwinds for now.
Thanks jpgould. This (second) delay is clearly down to the FCA alone, whose competence is debatable! Private Eye readers will know exactly what I mean. Trouble is, it's likely to impact directly on small PIs the longer it drags on beyond the previously indicated time.
I dropped the Chief Executive an email and he helpfully replied that the timing of the review outcomes remains under the FCA's control. Any update will therefore be subject to the FCA completing their work. Otherwise the interims in August will be the next scheduled opportunity to update us.
Further to my 4 June post, the FCA needs to get a move on if (as HAT suggested) we're going to hear their outcome by 30 June. What's the betting it'll be pushed back yet again?! Hope not, as it's creating uncertainty & damaging investor sentiment the longer this drags on.
According to HAT's 23 03 21 RNS, FCA investigation likely to conclude by 30 06 21 (though I guess it could always be pushed back again): "The Group continues to work with the appointed Skilled Person and the FCA in respect of the review into its creditworthiness assessments and lending processes for its unsecured High-Cost Short Term Loans (HCSTC). Given the ongoing disruption from the pandemic, the outcome of this review will now likely be delayed into the second quarter of 2021."
I can’t see that being a coincidence. I’m pretty sure we’re due an update this month on the FCA investigation and this is why the share price has been dropping. I can’t say I blame people for selling but hopefully any fines will be minimal because other than that the company itself seems in good shape and in a brilliant spot to capitalise on the downturn to come after furlough ends.
I wonder why Richard Withers has, well, withered away? Something to do with the FCA investigation?