Economic conditions are tough and are expected to remain difficult in 2024. This makes it tricker than usual to find good UK growth stocks to buy.
Selecting companies with extensive operations outside Britain could help investors lessen this problem. But predictions of weak overseas growth also makes it a difficult task. The International Monetary Fund reckons GDP growth will slow to 3% next year, from 3.5% in 2023.
That said, it’s not impossible to dig out brilliant growth shares for the coming year. Here are three I expect to thrive in this tough landscape.
FRP Advisory Group
AIM-listed consultancy FRP Advisory Group (LSE:FRP) is a classic counter-cyclical buy. It specialises in areas including bankruptcy, restructuring, capital raising and insolvency, fields that experience high demand during downturns.
This is why City analysts expect earnings here to rise 18% year on year in 2024. Such optimism is perhaps no surprise given the strength of recent trading.
Revenues and underlying adjusted EBITDA soared 19% and 34%, respectively, between January and June as interest rate hikes boosted the number of restructuring cases. The persistence of higher-than-normal rates next year should keep the company busy too, as businesses roll off cheaper credit arrangements.
Regulatory changes could dent profits, while heavy competition is another threat to the company. But, on balance, I’m expecting it to perform strongly in 2024.
H&T Group
Tough economic periods also bode well for pawnbrokers such as H&T Group (LSE:HAT).
In a sign of the stress facing the UK economy, the Office for Budget Responsibility has just slashed its 2024 GDP growth forecasts to 0.7%. That’s less than half the 1.8% predicted in March. In this environment the number of people pawning items to make ends meet should remain robust.
Latest financials from H&T showed gross lending rose 22% during the six months to June. Meanwhile its pledge book rose £28m from the same 2022 period, to £113m, thanks to growth across all its regions.
City analysts expect annual earnings at the AIM-listed company to jump 23% year on year in 2024. I’d buy the UK share even though profits could take a hit if gold prices recede.
B&M European Value Retail
Value retailers like B&M European Value Retail (LSE:BME) could also be shrewd stocks to buy as under-pressure consumers try to stretch their budgets as far as possible.
City analysts certainly expect earnings at the FTSE 100 firm to accelerate over the short term. They predict growth of 2% for the current financial year (to March 2024) and improve to 8% for the following 12-month period.
Sales and revenues will be boosted by the retailer’s aim to supercharge its store portfolio. It opened 28 gross new stores in the UK and France between April and September. B&M hopes to eventually have 1,200 stores in operation, up from around 950 today.
Rising energy and labour costs may strain B&M’s bottom line. However, I still think there’s plenty of scope for strong and sustained earnings growth.
