H&T storefront
H&T has snapped up Essex-based pawnbroker Maxcroft for £11.3 million in cash / Image source: H&T
  • H&T acquires profitable Essex pawnbroker
  • Secures extra £25 million in financing
  • Deals ‘underpin the future growth trajectory’

Despite its status as a clear cost-of-living crisis winner, shares in pawnbroker H&T (HAT:AIM) are down 12% year-to-date following a January profit warning that caught investors off guard.

However, the stock rallied 5% to 389p on Wednesday as investors applauded the acquisition of a small Essex-based competitor as well as £25 million of fresh funding that will be used to finance further growth.


AIM-traded H&T, which also sells high-quality new and second-hand jewellery and watches, has snapped up profitable Ilford-based pawnbroker Maxcroft for £11.3 million in cash.

House broker Shore Capital described the acquisition of Maxcroft’s trading assets as ‘a unique opportunity’ for H&T, bringing with it ‘a single well-established store’ with 40 years of trading history along with ‘a sizeable and growing’ £6.1 million pledge book.

H&T informed investors that 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.’


Also boosting sentiment towards the stock was the news H&T has secured an additional £25 million in financing from Pricoa, the private capital arm of Prudential Financial.

Besides supporting the Maxcroft acquisition, the fresh funding provides H&T with additional headroom to fund future investment in growing both the pledge book and its store base.

The transaction also extends the duration of the group’s debt facilities and adds further diversification alongside the existing facilities from Lloyds (LLOY) and Allica.

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Chief executive Chris Gillespie said both transactions underlined H&T’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.’

Shore Capital said it remains ‘optimistic on the outlook for the pawnbroking business in particular, given continued strong underlying structural demand for such services in the UK, following regulatory change that has driven alternative unsecured credit providers from the marketplace.’

Back in January, H&T warned pre-tax profits for the year to December 2023 would come in around 10% below market forecasts due to ‘challenging’ retail trading conditions in the peak pre-Christmas period, although the company still expected to report an impressive 40% year-on-year surge in profits amid rising demand for its core pawnbroking product.

A loan from a pawnbroker is appealing during straitened economic times as it is often the easiest way for consumers, many with poor credit histories, to obtain a quick loan and help pay their bills.


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Issue Date: 21 Feb 2024