The Board has identified the following as key stakeholders for the Group: Shareholders, Colleagues, Customers and Regulatory Bodies.
In accordance with the Companies Act 2006 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018) the Directors set out how they have considered the requirements of section 172 (1) of the regulations. A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
(a) The likely consequences of any decision in the long term,
(b) The interests of the company’s employees,
(c) The need to foster the company’s business relationships with suppliers, customers and others,
(d) The impact of the company’s operations on the community and the environment,
(e) The desirability of the company maintaining a reputation for high standards of business conduct, and
(f) The need to act fairly as between members of the company.
Shareholders
We have engaged with our major shareholders throughout the year, to ensure our long-term strategy aligns with their interests and expectations, and to explain how we aim to deliver sustainable growth and maximise returns for shareholders. We aim to generate value for our shareholders delivering sustainable growth and profitable returns, over and above H&T’s cost of capital, and to employ a progressive dividend policy targeting at least two times dividend cover over the Business cycle.
We seek to provide regular updates to our shareholders, and value personal contact and individual dialogue, with significant time being allocated to shareholder meetings with the Executive and, in October 2023, with the Chair. These are often held with our Nominated Advisor and Broker, Shore Capital, and our financial PR Consultants, Alma PR.
On Page 56 we set out in further detail how the Group complies with Principle 2 of the QCA (meeting shareholder needs and expectations).
Colleagues
We consider that our people are our single biggest asset, and we fully recognise that the success of the Business is dependent on ensuring that our colleagues are paid fairly against the market, are developed to successfully carry out their roles through effective onboarding and development support, and are motivated and committed to delivering the level of service our customers expect. We regularly check in with our colleagues through employee forums and CEO Q&As to hear their views and update them on our Business. We maintain our focus on the completion of our proprietary training programme, Aspire, which rewards our colleagues for continuing education on the range of services we make available.
Suppliers
We continue to follow best industry practice for effectively managing our third-party suppliers, mitigating vendor risk through robust vendor due diligence whilst ensuring both high-quality and best-value partnerships. We require compliance with the highest standards of trade bodies, and adherence to safety standards, throughout the supply chain.
Our rigorous pre-contractual checks ensure that we can be confident that our suppliers comply with legal standards including those set out in the Modern Slavery Act 2015. Our team monitors both service provision and pricing to ensure best value to the Business.
Customers
We are committed to meeting the needs of our customers. We regularly review our range of product offerings, and survey our customers on a regular basis, so that we remain abreast of their needs and perceptions of their H&T experience. Throughout 2023 we conducted a number of customer insight surveys to help us better understand our customer demographic and their needs.
With our range of accessible services, both in store and online, which include retailing high quality new and pre-owned jewellery and watches, purchasing of pre-owned jewellery and watches, cheque cashing, foreign exchange services, money transfers, watch repairs, and our main product offerings of pledge lending, we provide simple, transparent and safe options for our customers to raise small-sum short-term funds when needed.
Our regular product reviews also ensure we remain competitive and provide good value for our customers.
We are aware of our essential role within local communities and value and nurture this relationship, investing in the provision of our face-to-face service by providing continuous training to our people, enabling a tailored service on a store-by-store basis.
The FCA’s new Consumer Duty rules which were implemented on time by the Business in July 2023 allow for a higher and more consistent standard of consumer protection for users of financial services and enable greater support for our more vulnerable customers – we are confident this helps to prevent harm before it happens.
Government, Regulatory Bodies and Industry Bodies
The Company is regulated by HMRC, by the FCA and by LSE; we take compliance with our obligations under each framework extremely seriously with a focus on ongoing monitoring, training and procedural updates, as well as the increasing role of corporate governance.
We are members of the National Pawnbrokers Association and the Consumer Credit Trade Association which enables us to actively influence within our sector.
To demonstrate the decision-making process and how the Directors have considered the matters in section 172(1) of the Act when making those decisions, the table below includes some examples of decisions made during the course of the year, the stakeholders impacted, points considered and the outcome of the decisions.
| BOARD ACTION | STAKEHOLDERS | CONSIDERATIONS | OUTCOME |
|---|---|---|---|
| Appointment of new Group Chair | Shareholders, Customers, Colleagues, Suppliers | The Board considered the suitability of the candidate for the role of Chair of the Group. | Simon Walker was appointed as Group Chair, after the existing Chair, Peter McNamara stepped down. |
| Appointed four new Non-Executive Directors | Shareholders, Customers, Colleagues, Suppliers | The Board considered its aim to evolve its governance structures by broadening the skills, experience and diversity of the Board. It further considered the suitability of the candidates for the role of Non-Executive Directors | Robert van Breda, Lawrence Guthrie, Catherine Nunn and Sally Veitch were appointed as Non-Executive Directors in July 2023. |
| Ensured sufficient finance to support continuing business activities | Shareholders, Customers, Colleagues, Suppliers | Short-term funding capacity availability that is flexible and cost effective to support the immediate and foreseeable business requirements. Lending covenants, security arrangements, fees and margin should be appropriate. | Financing facility from Lloyds Bank was increased to comprise revolving credit facility of £45m and an overdraft facility of £5m. This will ensure sufficient funding to meet future business requirements. Facility maturity is extended by +one year to December 2026. Received additional long-term loan of £10m from Allica Bank, matching the maturity of the Lloyds facility. No change to the existing covenants; one new covenant added. |