April 22, 2024

H&T acquires small business finance expertise

AIM-quoted pawnbroker H&T (LON: HAT) is acquiring the trading assets of Essex-based rival Maxcroft Securities for £11.3m. The share price is 3.4%n higher at 382.5p.

Maxcroft has a store in Ilford that has been trading for four decades. The pledge book is worth £6.1m.

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Maxcroft has a different client make-up to H&T because it provides working capital to the self-employed and small businesses. The average size per customer is £4,023. Maxcroft could help H&T grow these activities in its current operations.

Pricoa Private Capital is providing £25m in additional financing for the operations. There is £10m lasting until February 2029 and £15m due in February 2031. This takes total funding to £85m. Some of the new capital will be used to pay down the revolving capital facility with Lloyds.

Net debt was £31.6m at the end of 2023 and even after the acquisition there should be £30m of headroom.

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