HGH - Heartland Group Holdings

[Snoopy]

Mr market was slow to react so I added this morning at 87 cents :)....didn't see any point waiting for the inevitable breakout. Very encouraging to see the S&P upgrade. I'm not sure but did someone mention we are well positioned :)


BBB- stable to BBB negative outlook? You really think that will make a big difference?

SNOOPY

[Bjauck]

The differential between ANZ term deposit interest rates and Heartland Term deposit interest rates has reduced over the last few months. So yes, I think improving credit ratings will increase Heartland profitability and hence attractiveness to investors.

Disclaimer: Shareholder in ANZ and HNZ.

[Arbitrage]

Do any of our members with a banking background know what a difference the credit rating changes make to the cost of borrowing by the bank?

[Harvey Specter]

BBB- stable to BBB negative outlook? You really think that will make a big difference?

SNOOPYI think the BBB- also negative outlook as the negative outlook is industry/economy specific in this case, not company specific.

It is a step closer to BBB+, and then we are into the A's - of course it is positive. They would have just lowered their cost of funds with no corresponding decrease in what they loan out at.

[percy]

BBB- stable to BBB negative outlook? You really think that will make a big difference?

SNOOPY

Yes

It will make a BIG difference;
Lower cost of borrowing.
Means "the market" will appreciate the big progress Heartland are making.
I think brokers will be happy to recommend Heartland as they have more runs on the board.
Add to Heartland's record of achieving what they said they would do.
Good progress made in selling "legacy" property,and proceeds reinvested in good loans.
Added strength of loan book recognised.
As a investor the rerating adds to my peace of mind.

[Beagle]

Snoopy - I agree with all of the above posters and can only add that its also about market perception.
I think people want to be dealing with a New Zealand bank that's growing stronger. Fundamentally the stock is very sound value at these level's and trading on a very undemanding 2015 PE ratio and attractive dividend yeild with ongoing growth prospects.

[percy]

Well I rang Jeff Greenslade to congratulate him on the raised S&P Credit Rating.
Luckily Jeff was in a meeting,so I had the pleasure of speaking to Allison.
She was very pleased to hear from me, and will pass my comments onto Jeff Greenslade and The Chairman.

[winner69]

Well I rang Jeff Greenslade to congratulate him on the raised S&P Credit Rating.
Luckily Jeff was in a meeting,so I had the pleasure of speaking to Allison.
She was very pleased to hear from me, and will pass my comments onto Jeff Greenslade and The Chairman.

Is Alison the tea lady or some real manager

well done anyway Percy

[percy]

Is Alison the tea lady or some real manager

well done anyway Percy

Whatever she does she answered Jeff's DDI phone.
The easy way she spoke to me I suspect she is not The Tea Lady,but a very capable person, who could indeed make a lovely cup of tea,as well as keeping the CEO's office running like clockwork.!

[forest]

Whatever she does she answered Jeff's DDI phone.
The easy way she spoke to me I suspect she is not The Tea Lady,but a very capable person, who could indeed make a lovely cup of tea,as well as keeping the CEO's office running like clockwork.!
Allison Windley
Executive Assistant at Heartland Bank
Auckland, New Zealand Financial Services
Join LinkedIn and access Allison Windley’s full profile. It's free!

[percy]

Allison Windley
Executive Assistant at Heartland Bank
Auckland, New Zealand Financial Services
Join LinkedIn and access Allison Windley’s full profile. It's free!

Thanks for that Forest.

[Banksie]

Thanks for that Forest.

Stalkers :)

[iceman]

Jeff happy and says the new credit rating is a "good place to be". I am sure both Percy and Allison agree :)
Jeff also says further acquisitions are on the agenda albeit nothing firm at present !

http://www.stuff.co.nz/business/industries/10074699/Heartland-eyes-further-growth-after-upgrade

[percy]

Jeff happy and says the new credit rating is a "good place to be". I am sure both Percy and Allison agree :)
Jeff also says further acquisitions are on the agenda albeit nothing firm at present !

http://www.stuff.co.nz/business/industries/10074699/Heartland-eyes-further-growth-after-upgrade

Thanks for the link Iceman.
I sold a few AIA the day before yesterday,and used the money buying a few more HNZ at 89cents this morning.I think the Credit upgrade is very significant.I knew they were working on it,but the spend in which they achieved it caught me by surprise.With the fantastic acquisition of Sentinel,modest forward PE and wonderful dividend,plus Greenslade's positive comments I must say I feel we are well positioned.!! lol

[Beagle]

Just checking guys...we're anticipating annual dividends totalling 6 cps fully imputed right ?

[percy]

Just checking guys...we're anticipating annual dividends totalling 6 cps fully imputed right ?

Yes.
I note Forbar research dated 3 April 2014 have dividends per share; 2013A 4.5 cents,2014E 6.5cents,2015E 8cents,and 2016E 8.5cents.
A = actual,,,E=estimate. All imputated 100% .
I thought they were a little optimistic,however a friend did point out to me,that banks have a history of paying good dividends.
You may be interested Forbar forecast the following dividend yields,[note 3/4/2014] for Aussie banks which do not have imputation credits here;ANZ 5.5%,CBA5.3%,NAB.6% and WBC 5.5%.

[Beagle]

Yes.
I note Forbar research dated 3 April 2014 have dividends per share; 2013A 4.5 cents,2014E 6.5cents,2015E8.5cents 8cents,and 2016E 8.5cents.
A = actual,,,E=estimate. All imputated 100% .
I thought they were a little optimistic,however a friend did point out to me,that banks have a history of paying good dividends.
You may be interested Forbar forecast the following dividend yields,[note 3/4/2014] for Aussie banks which do not have imputation credits here;ANZ 5.5%,CBA5.3%,NAB.6% and WBC 5.5%.

Thanks mate, much appreciated. WOW that's going to make for an impressive gross yeild going forward if Forbar's estimates prove correct isn't it !!! We are extremly well positioned :)
For what its worth in my opinion the fiasco where we can't claim Australian franking credits doesn't look like its going to be resolved any time soon.

[percy]

Thanks mate, much appreciated. WOW that's going to make for an impressive gross yeild going forward if Forbar's estimates prove correct isn't it !!! We are extremly well positioned :)
For what its worth in my opinion the fiasco where we can't claim Australian franking credits doesn't look like its going to be resolved any time soon.

With Aussie economy not looking flash I can't see it being resolved for a long time.
When you compare Heartland's 100% imputated dividend, with the non imputated Aussie banks's dividend,Heartland's is looking pretty fantastic.

[Beagle]

With Aussie economy not looking flash I can't see it being resolved for a long time.
When you compare Heartland's 100% imputated dividend, with the non imputated Aussie banks's dividend,Heartland's is looking bloody fantastic. Fixed that post for you mate.

P.S. If ever. As Australians no longer care if Kiwi's are starving or homeless, (no benifets or the right to even vote), how much do you think they care that we can;t claim franking credits... CER at its absolute finest:mad ;:

[Bjauck]

Fixed that post for you mate.

P.S. If ever. As Australians no longer care if Kiwi's are starving or homeless, (no benifets or the right to even vote), how much do you think they care that we can;t claim franking credits... CER at its absolute finest:mad ;:

I imagine you are referring to the Commonwealth Govt not Australians in general? Certainly the Kiwis who get into Australia via the special entrance get fewer benefits than those who get permanent residence. You need to be a citizen to vote in OZ...so that is not just directed at Kiwis. Nobody forces Kiwis to go Australia and you need to be aware of your entry permit and what your obligations are and what you are entitled to when you move to new country. There are way more Kiwis in OZ than vice versa so you could say Australia helps NZ in tough times by reducing NZ's unemployment numbers. Many Kiwis go to OZ not out of any particular love for their new host country but because they thought they could earn extra dollars compared to the country they left behind.

When comparing yields on HNZ with the OZ banks...you need to take into account the increased risk of HNZ compared with the OzBanks - a few notches down the credit rankings.

[Under Surveillance]

With Aussie economy not looking flash I can't see it being resolved for a long time.
When you compare Heartland's 100% imputated dividend, with the non imputated Aussie banks's dividend,Heartland's is looking pretty fantastic.
Not to mention the icing on the cake, a dividend reinvestment programme with the issue price at a 2.5% discount to sales ex dividend.

[stoploss]

Outrageous but true. :)

We just need Kiwibank and HNZ to ramp up and more money stays in NZ!

We also need a Kiwi owned insurance company. At present I can't think of any major insurance brand that is majority NZ owned. Anyone? It would be a pure guess on my part but I suspect 95% of insurance premiums in NZ go to foreign owned (mainly Ozzie) insurance companies.

Time for a government backed mutual insurance company? ... ("mutual" means that the policy holders own it!)

http://www.partnerslife.co.nz

[Beagle]

I imagine you are referring to the Commonwealth Govt not Australians in general? Certainly the Kiwis who get into Australia via the special entrance get fewer benefits than those who get permanent residence. You need to be a citizen to vote in OZ...so that is not just directed at Kiwis. Nobody forces Kiwis to go Australia and you need to be aware of your entry permit and what your obligations are and what you are entitled to when you move to new country. There are way more Kiwis in OZ than vice versa so you could say Australia helps NZ in tough times by reducing NZ's unemployment numbers. Many Kiwis go to OZ not out of any particular love for their new host country but because they thought they could earn extra dollars compared to the country they left behind.

When comparing yields on HNZ with the OZ banks...you need to take into account the increased risk of HNZ compared with the OzBanks - a few notches down the credit rankings.

I know a lot of Kiwi's in Australia that feel they're facing considerable dicrimmination at a personal and at a Government level but perhaps we need to leave the politics out of this. Fact is the franking credit fisaco has been an issue that is potentially capable of resolution for as long as I can remember, (I've been an accountant for 32 years), so I'd argue in this respect either CER simply doesn't work or one of the Governments is activly blocking a resolution of this matter...I'm sorry I cannot give you a prize for guessing which Government.
Like many of my clients I have a strong bias against Australian investment because I don't want to pay tax twice !!

Point taken about the higher credit rating of Australian banks but I think taking into account the moderate extra risk and imputation credit availability investment in HNZ makes a compelling case for itself especially with the new higher credit rating. I recently dipped my toe into the water before the credit rating upgrade, hoping it would come through and added more yesterday and will continue to add on any dips.

For anyone tempted to buy Australian stocks and simply not declare the dividends as a way of rebelling against this commercial injustice, don't go there...the ATO and N.Z. IRD are swapping information like best buddies and its so easy these days with dividend information so easily available from the share registries, CER works when it comes to collecting tax revenue..

[traineeinvestor]

Westpac does make an effort and gives NZ resident shareholders imputation credits to the extent that it's NZ tax payments so allow: http://www.westpac.com.au/about-westpac/investor-centre/shareholder-information/dividend-information/#3_new_zealand_imputation_credits

[Beagle]

NAB does too on the odd occassion but its minimal and infrequent.

[Beagle]

^^ What you've raised is a good idea.

[percy]

Roger. Me? If so, I'd be delighted to drop my hat into the ring for CTO/CIO role. :)

On another subject, one notes our friend who likes to drop shares at the end of the day is back in action. I'm beginning to think its Percy ... ;)

Not me.!!!
I was a buyer earlier in the day at 89cents.Last sale today was 148 shares at 87cents.
If fact I may be classified as a "belgarion" ie a pyramid builder,as I have never sold any Heartland shares,just keep adding to our holdings.
I am still overjoyed at the S&P Credit rating upgrade.!!
Feel we have moved from "well positioned" to "poised."!! lol.

[iceman]

Yes.
I note Forbar research dated 3 April 2014 have dividends per share; 2013A 4.5 cents,2014E 6.5cents,2015E 8cents,and 2016E 8.5cents.
A = actual,,,E=estimate. All imputated 100% .
I thought they were a little optimistic,however a friend did point out to me,that banks have a history of paying good dividends.
You may be interested Forbar forecast the following dividend yields,[note 3/4/2014] for Aussie banks which do not have imputation credits here;ANZ 5.5%,CBA5.3%,NAB.6% and WBC 5.5%.

Personally I would like to see a 4.5c - 5.0c dividend maintained for the next 2-3 years and use the cash for further acquisitions as the opportunities arise. That would reduce the need for SPPs like the recent one to fund the purchase of SMI, which was very unfair on us existing shareholders. Using the cash generated by the business to acquire further growth, is much prefered by yours truly :)

[percy]

Personally I would like to see a 4.5c - 5.0c dividend maintained for the next 2-3 years and use the cash for further acquisitions as the opportunities arise. That would reduce the need for SPPs like the recent one to fund the purchase of SMI, which was very unfair on us existing shareholders. Using the cash generated by the business to acquire further growth, is much prefered by yours truly :)

Not sure how I feel about high dividend,and SPPs. A friend who went to the last Heartland presentation, told me Jeff Greenslade was told that shareholders thought the recent SPP was a waste of time.Whether Greenslade, and the board have taken that onboard or not , may dictate future dividend policy.

[noodles]

Not sure how I feel about high dividend,and SPPs. A friend who went to the last Heartland presentation, told me Jeff Greenslade was told that shareholders thought the recent SPP was a waste of time.Whether Greenslade, and the board have taken that onboard or not , may dictate future dividend policy.

I would hope all this SPP BS will be rid of under the new Financial Markets Conduct Act 2013. If the directors do a capital raising, but not include existing shareholders on a proportionate manner, there is good reason to be pissed off.

See the article from Gaynor.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11236813

"Retail investors will welcome the move to less complicated offer documents because under the old regime individual investors were often excluded from attractive capital raisings.The most obvious examples of this were share placements by listed companies.
Before April 1 companies could issue new shares to sophisticated or wholesale investors without publishing an offer document but a prospectus was required if the offer was extended to retail investors.
This usually meant that retail investors were excluded from these capital raisings because companies didn't want to incur the expense of preparing and issuing offer documents. Under this scenario individual investors could only participate in Share Purchase Plans (SPP) which are capped at a maximum of $15,000 per investor.
This clearly disadvantaged individual investors as the Shareholders' Association has consistently noted."

[percy]

I see HNZ on a great growth path of 15 to 20% over the next 3 to 5 years .I see EPS of 10,15 and 20cents.I see PEs of 14.I see the SP trading at 2 or 3 times NTA.
So in 3/4 years time I see a SP of $2.50 to $3.paying big fat divies of 12cents or more.Buy today to enjoy 20% yields in a few years time.
History has shown us that a well run bank or finance company can be one of the fastest growing companies on the sharemarket.
Jeff Greenslade has laid the foundations for a great company.Ticked all the boxes.We are "very well positioned" to reap the full financial benefits that will be generated.

Posted 18-04-2012.
I brought good amounts of shares at 49cents on 10-04-2012 and at 50 cents on 22-05-2012.[I kept adding since that time].
My gain has been over 77% in two years.I have also enjoyed great dividends.
The business has certainly achieved a great deal in those two years.The directors have kept in touch with shareholders,setting out the company's goals.They just keep doing what they say they will do.Jeff Greenslade certainly knows how to bring on board experienced banking people.The acquisitions have been at very modest multiples.Getting the banking licence was a great achievement,and now the credit rating upgrade is "the icing on the cake."
The future? With solid foundations the future looks very exciting.As shareholders we can look forward to "real earnings" growth,great dividends,and as "the market" rerates Heartland the share price will increase.
So we can still look forward to seeing Heartland trading at 2 or 3 times NTA some time in the future.

[iceman]

Posted 18-04-2012.
I brought good amounts of shares at 49cents on 10-04-2012 and at 50 cents on 22-05-2012.[I kept adding since that time].
My gain has been over 77% in two years.I have also enjoyed great dividends.
The business has certainly achieved a great deal in those two years.The directors have kept in touch with shareholders,setting out the company's goals.They just keep doing what they say they will do.Jeff Greenslade certainly knows how to bring on board experienced banking people.The acquisitions have been at very modest multiples.Getting the banking licence was a great achievement,and now the credit rating upgrade is "the icing on the cake."
The future? With solid foundations the future looks very exciting.As shareholders we can look forward to "real earnings" growth,great dividends,and as "the market" rerates Heartland the share price will increase.
So we can still look forward to seeing Heartland trading at 2 or 3 times NTA some time in the future.

Based on this, most of which I agree with, it appears we are poised Percy !

[percy]

Based on this, most of which I agree with, it appears we are poised Percy !

We certainly are.!!!!
Should enjoy another 77% SP increase over the next two years,which will take the SP to $1.56.??????? Plus dividends.

[winner69]

Based on this, most of which I agree with, it appears we are BLOODY WELL poised Percy !

Just a correction to your post Iceman

Though I think Percy getting a bit carried away with his 3 times NTA bit

[percy]

Just a correction to your post Iceman

Though I think Percy getting a bit carried away with his 3 times NTA bit

Quiet right Winner69.
I may have to settle with double NTA to start with .!!!!! lol

[noodles]

Posted 18-04-2012.
I brought good amounts of shares at 49cents on 10-04-2012 and at 50 cents on 22-05-2012.[I kept adding since that time].
My gain has been over 77% in two years.I have also enjoyed great dividends.
The business has certainly achieved a great deal in those two years.The directors have kept in touch with shareholders,setting out the company's goals.They just keep doing what they say they will do.Jeff Greenslade certainly knows how to bring on board experienced banking people.The acquisitions have been at very modest multiples.Getting the banking licence was a great achievement,and now the credit rating upgrade is "the icing on the cake."
The future? With solid foundations the future looks very exciting.As shareholders we can look forward to "real earnings" growth,great dividends,and as "the market" rerates Heartland the share price will increase.
So we can still look forward to seeing Heartland trading at 2 or 3 times NTA some time in the future.
Great trading Percy and nice summary or their achievements. I would add that zero growth is built into the current share price with a gross yield close to 10% and a fy14 pe of 10.

If the management can achieve some growth, the rerating should be significant.

[Beagle]

Choo Choo...the train is about to leave the station ALL ABOARD for the great ride :D

[winner69]

Heartland seem to make a big thing about being local and being part of the community. Niche seems to be the strategy going forward.

A while ago I floated the idea with Heartland of them getting involved in microfinance, small safe loans to the not so well off. Seemed to fit with their community thinking as well as strategy. They didn't seem that interested. Kiwibank are now involved in such an initiative in Auckland.

With a lot of initiatives under way about P2P lending maybe Heartland should get involved someway. Again community and niche angles to it. Westpac are already into it in Australia and looking at NZ. Maybe they see the threat that this could be to traditional banking and see getting involved as a good thing.

Will float that idea with Percy's mate Jeff - might have to go through Alison as I rarely get a response. Mind you a year or so ago when I knew a reverse mortgage outfit was on the block I emailed him to see if this was potentially a niche area for Heartland - maybe a bit close to home that request.

Anyway how Heartland getting involved with someone in doing something about P2P stuff

[percy]

Great trading Percy and nice summary or their achievements. I would add that zero growth is built into the current share price with a gross yield close to 10% and a fy14 pe of 10.

If the management can achieve some growth, the rerating should be significant.

Growth will be hard to achieve in most of Heartland's sectors, motor vehicles and rural lending. I think Sentinel will really surprise us all on the upside.Further growth may be driven by more acquisitions.Heartland have proved they can do acquisitions well.
So I see modest growth,which as you point out;"the rerating should be significant."

[percy]

Heartland seem to make a big thing about being local and being part of the community. Niche seems to be the strategy going forward.

A while ago I floated the idea with Heartland of them getting involved in microfinance, small safe loans to the not so well off. Seemed to fit with their community thinking as well as strategy. They didn't seem that interested. Kiwibank are now involved in such an initiative in Auckland.

With a lot of initiatives under way about P2P lending maybe Heartland should get involved someway. Again community and niche angles to it. Westpac are already into it in Australia and looking at NZ. Maybe they see the threat that this could be to traditional banking and see getting involved as a good thing.

Will float that idea with Percy's mate Jeff - might have to go through Alison as I rarely get a response. Mind you a year or so ago when I knew a reverse mortgage outfit was on the block I emailed him to see if this was potentially a niche area for Heartland - maybe a bit close to home that request.

Anyway how Heartland getting involved with someone in doing something about P2P stuff

I think you would get a lot of shareholder support if you brought this up at the next agm.

[Wolf]

What amount of shares are people using for EPS 2014? I'm using 458,455,000 full amount of shares not sure what the weighted average is.

2013 Normalized eps of 6.3 gives a current PE of 14

At the current price with my estimates taken from guidance
35m for FY2014 would give HNZ eps of 7.6c putting it on a 2014 PE of 11.7
43m for FY2015 would give HNZ eps of 9.4c putting it on a 2015 PE of 9.5


With over 20% eps growth forecast i see HNZ as a growth stock warranting a fairly higher PE is there any broker reports/ anyone done some research on forecast into 2016 and beyond?

But at a PE of 14 which it has been trading on (normalised) 2013 i get a 2014 value of $1.07 and 2015 $1.31. And dividends...:)

HNZ is currently my favourite stock on the NZX. Market re rating could send this share alot higher, hopefully we get some more broker coverage.

Disc: Hold :t_up:

[noodles]

What amount of shares are people using for EPS 2014? I'm using 458,455,000 full amount of shares not sure what the weighted average is.



This is my calculation:


Event
Date
Days
Shares
Shares used for calc


Opening
01/07/2013
0
388704000
388,704,000


div resinvest
04/10/2013
95
3850604
2,848,392


Partial fund
19/02/2014
233
17045455
6,164,384


SPP
25/03/2014
267
5854940
1,572,011


more HER
01/04/2014
274
43000000
10,720,548


DRP
04/04/2014
277
4811618
1,160,061






411,169,396

[noodles]

At the current price with my estimates taken from guidance
35m for FY2014 would give HNZ eps of 7.6c putting it on a 2014 PE of 11.7
43m for FY2015 would give HNZ eps of 9.4c putting it on a 2015 PE of 9.5


With over 20% eps growth forecast i see HNZ as a growth stock warranting a fairly higher PE is there any broker reports/ anyone done some research on forecast into 2016 and beyond?



Using NZ First Capital Estimates:


Year
NPAT
eps


31/6/2014
35200
0.086


31/6/2015
41100
0.089

[winner69]

The old weighted average trick eh

Helps make things look better this year and next year... and probably help the eps accretive bit come true

Hey noodles one question .... when they come to pay out the next divie bet you they don't use the weighted average number

[noodles]

The old weighted average trick eh

Helps make things look better this year and next year... and probably help the eps accretive bit come true

Hey noodles one question .... when they come to pay out the next divie bet you they don't use the weighted average number

I think the acquisition was marginally eps accretive. Even if there is no uplift in eps, at least HER is another avenue for loan growth. Growth doesn't seem to be evident in other parts of the business.

[Snow Leopard]

The current number of shares on issue is 463,266,592 [NZX.COM (https://nzx.com/markets/NZSX/securities/HNZ)]

I never bother with the weighted average stuff. Going forward the quantity of shares will not [generally] be less than the current count.

For me it is:
1/ Anything to worry about in the current accounts ?
2/ What is expected next year ?

I believe the current share price undervalues the company and thus it has more upside than downside potential.

Best Wishes
Paper Tiger

[percy]

Using NZ First Capital Estimates:


Year
NPAT
eps


31/6/2014
35200
0.086


31/6/2015
41100
0.089



Forbar research 3/4/2014
2014 year NPAT 35.8 mil ...eps 0.080
2015 year NPAT 45.2 mil...eps 0.099
they therefore expect eps growth of 12.5% from 2014 to 2015.
My own view is closer to NZ First Capital estimates.
Growth will be driven by Sentinel and any further acquisitions.
I look forward to management's guidance of future earnings.
Recently UDC announced a good result,so I am sure Heartland will do so as well.

[Harvey Specter]

With consumer/business confidence picking up there will be some growth ... :)
When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

[winner69]

When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

For all we know hey may reduce lending rates as well.

Maintain margin but be me more competitive?

I have no idea

[percy]

When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

For me growth is earnings per share growth.
Heartland have been moving from low margin business [home loans] to higher margin loans [such as seasonal rural lending].
I agree the better credit rating will benefit them,however I think they have had access to cheaper funding since gaining the banking licence.
I am waiting for further guidance from the company,as there are too many variables for me to figure out growth.Those variables include rural lending [I have no idea how that is going,although I suspect with beef and sheep farmers also doing well Heartland will be doing well].Motor vehicles should be doing well with car sales at record levels.Business finance,I am not sure of. The big surprise could come from Sentinel,with pent up demand driving big growth.
I am inclined to look past the numbers,ie they are doing everything they said they would.The business is in great shape.This was confirmed by the S&P credit upgrade.I am sure Heartland will be working towards another upgrade.They talked at the last agm about acquisitions.I thought they may do one of about $25mil to $30mil from cash on hand,so I was over the moon with the Sentinel acquisition.As with most well run companies, the surprises tend to be on the upside.

[kizame]

Excellent home equity loan adds on TV1 between 5:30 and 6 tonight,very well put together.
Was pleasantly surprised by the possible reasons for needing a loan,very informative.

[forest]

According to Bing finance Milford recently Kiwisaver growth fund has been buying HNZ together with a few more funds. This can only be positive for the SP.

[Snow Leopard]

HSBC NZ records 38% March quarter rise in impaired assets on back of one corporate loan (http://www.interest.co.nz/business/70187/hsbc-nz-records-38-march-quarter-rise-impaired-assets-back-one-corporate-loan)


Never good to have too much in one loan.

Best Wishes
Paper Tiger

[BlackPeter]

HSBC NZ records 38% March quarter rise in impaired assets on back of one corporate loan (http://www.interest.co.nz/business/70187/hsbc-nz-records-38-march-quarter-rise-impaired-assets-back-one-corporate-loan)


Never good to have too much in one loan.

Best Wishes
Paper Tiger
true , but according to your link it is still only 0.073% of HSBC's loans which are impaired. Hardly a problem.

[Snow Leopard]

true , but according to your link it is still only 0.073% of HSBC's loans which are impaired. Hardly a problem.

Go read it again.

Best Wishes
Paper Tiger

[Harvey Specter]

true , but according to your link it is still only 0.073% of HSBC's loans which are impaired. Hardly a problem.


Go read it again. Previous quarter, $142 impaired being 0.073%
Now $195m so should be about 0.01%. 0.073% to 0.01% being approximately 38% increase also reconciles.

Hardly a problem.

And even less of a problem for Heartland Bank.

[Snow Leopard]

Previous quarter, $142 impaired being 0.073%
Now $195m so should be about 0.01%. 0.073% to 0.01% being approximately 38% increase also reconciles.

Hardly a problem.

And even less of a problem for Heartland Bank.

OK now I am getting seriously worried - two posters who read less than 100 words and incorrectly extract information.


Best Wishes
Paper Tiger

[traineeinvestor]

Looks like a pretty substantial deterioration in the quality of HSBC's loan book:

Sept 30, 2013 - $2.4 million of impaired loans (0.073% of net loans)
March 31, 2014 - $195.4 million of impiared loans (5.85% of net loans)

I hope that is not indicative of the finance industry in general.

[percy]

Impaired loans reaching 5.85% of net loans is a huge % to have impaired.
I would expect some one's job at HSBC NZ is very much impaired!!!!!!
Will be a major concern to HNZ shareholders should we read of a new HNZ appointment,whose career has been with HSBC NZ !!!!

[Longhaul]

Will be a major concern to HNZ shareholders should we read of a new HNZ appointment,whose career has been with HSBC NZ !!!!

Hoping that HNZ managers would be smart enough not to do that! :)

[Harvey Specter]

OK now I am getting seriously worried - two posters who read less than 100 words and incorrectly extract information.I will try again:

Sept $2.4m 0.073%
Dec $142m
Mar $195m 5.85%

Still struggling to see what this has to do with Heartland. Which is probably why I dont give a sh.. why am I posting?

[percy]

Just a timely warning that banks can/and still do get it wrong.

[percy]

Hoping that HNZ managers would be smart enough not to do that! :)

Offcourse Heartland managers are too smart to do that.!!
Was only joking!!! lol

[BlackPeter]

Go read it again.

Best Wishes
Paper Tiger

fair enough ... my bad. Broke two important rules ...

1) Always read stuff at least twice before commenting
2) Never doubt the tiger :sleep:!

Thanks for pointing out ...

[Banksie]

Impaired loans reaching 5.85% of net loans is a huge % to have impaired.
I would expect some one's job at HSBC NZ is very much impaired!!!!!!
Will be a major concern to HNZ shareholders should we read of a new HNZ appointment,whose career has been with HSBC NZ !!!!

If this was a single corporate loan, who are the borrowers? Someone is in serious trouble, Postie+?

[percy]

I would guess Mainzeal. Postie is peanuts.!

[vorno]

So, according to an article that I can no longer find:
The average farmer in NZ is 60 years old. Sounds like the younger generation are not wanting to be farmers. How good the research is, is another story.

An "ageing farmer" population could propose a problem?

[Harvey Specter]

So, according to an article that I can no longer find:
The average farmer in NZ is 60 years old. Sounds like the younger generation are not wanting to be farmers. How good the research is, is another story.

An "ageing farmer" population could propose a problem?I think corporates (including super funds etc) are taking up the slack. They may/should have better funding lines so could cause Heartlands market to shrink.

[percy]

I think corporates (including super funds etc) are taking up the slack. They may/should have better funding lines so could cause Heartlands market to shrink.

Or grow.!!!!!!!!!!!!!!!!!!!!!!!

[Harvey Specter]

Or grow.!!!!!!!!!!!!!!!!!!!!!!!Mmm - not sure on that. I was referring to the large players (Harvard Pension fund with 10+ farms, NZSuper fund with 10+ farms etc) with multiple farms who are likely to have large funding lines from a bank, secured over all assets so no need for small individual loans for new equipment.

You could be right for the small, single farm corporates (who have long term funding for the farm but need short term funding for the equipment) as they replace the old rich farmers who just pay cash as they are debt free and rolling in it.

[Xerof]

So, according to an article that I can no longer find:
The average farmer in NZ is 60 years old. Sounds like the younger generation are not wanting to be farmers. How good the research is, is another story.

An "ageing farmer" population could propose a problem?
I think this is quite the wrong conclusion. Farmers generally don't hand over the farm to their siblings until they retire anyway - generally. What I'd prefer to see is data that shows the average age of farmers has gone from xx to 60 over the past generation or so. I don't think there will be a worrisome trend at all. Agree lots more corporate farming ownership, but the staff won't average 60 IMO

[BlackPeter]

So, according to an article that I can no longer find:
The average farmer in NZ is 60 years old. Sounds like the younger generation are not wanting to be farmers. How good the research is, is another story.

An "ageing farmer" population could propose a problem?

Well, its not quite that bad: according to Federated Farmers President, Bruce Wills: "The average age of a dairy farmer today in New Zealand is 43 years old, the average age of a sheep and cattle farmer is 58,"

check out the NZ Herald article:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10894302

Sounds like the younger generation is going where (currently) the money is: into dairy!

[Harvey Specter]

Its cracked 90c again. Interesting to see if it holds.

[Beagle]

Makes sense, get up early and work hard while you're young.
Just out of interest, does anyone know if HNZ provides finance for sharemilkers cows ?

[stoploss]

Makes sense, get up early and work hard while you're young.
Just out of interest, does anyone know if HNZ provides finance for sharemilkers cows ?

Um .....
http://www.heartland.co.nz/content/rural/stock-lease-finance.aspx

[kizame]

Makes sense, get up early and work hard while you're young.
Just out of interest, does anyone know if HNZ provides finance for sharemilkers cows ?

Yes am pretty sure they do. Advertised a while back on the radio first payments not for 18 months.

[Beagle]

Thanks guys, perhaps I need to spend some more time on their website :)
Nice to see the SP finally getting some upside traction.

[Beagle]

We should run a sweepstake on when they'll hit $1 :)

[Cool Bear]

We should run a sweepstake on when they'll hit $1 :)
Indeed, let's have some fun. Hit $1 in about 2 weeks, say 25 June but close or stay above $1 in early August... 7 August.

[BlackPeter]

We should run a sweepstake on when they'll hit $1 :)

hmm - even the optimistic analysts set their 12 month target below $1 (well - just). Mean target is 96 cts. Based on this and my cloudy crystal ball my bet for HNZ breaking through the $1 mark would be August 11, 2015 ;). However - don't take my word for it and do your own research ... linear extrapolations of random processes are normally wrong!

[percy]

Indeed, let's have some fun. Hit $1 in about 2 weeks, say 25 June but close or stay above $1 in early August... 7 August.

I look forward to shouting you an evening of free beer at Trevinos if you are right.!!!

[kizame]

Please guys don't put the voodoo spell on these shares I hope they stay where they are,because they seldom do when i say that.
But buyers seem to be looking a bit further ahead now and with the big pluses of medium PE and growth through aquisition prospects,starting to continue the slow but steady trend upwards.

[Cool Bear]

I look forward to shouting you an evening of free beer at Trevinos if you are right.!!!
Percy, my crystal ball had a few coffees too much yesterday morning but I will still pencil down free beer in my calendar for mid August. See you then.

[vorno]

I look forward to shouting you an evening of free beer at Trevinos if you are right.!!!

Well, it is certainly a good start this morning - trading 91c and a strong interest from buyers to boat!

[Snoopy]

I now move to the PGW documentation relating to the sale of PGF which was discussed at the PGW special general meeting of FY2011

Northington Partners suggested that investors should look for a few more signs of improvement. One of these is a reduction in bad debts. In the HY2012 commentary we learn:

"New impaired and past due loans over 90 days were $88m which was 4.2% of net finance receivables as at 31st December 2011. This is down from $101m and 5.0% of debts as at 30th June 2011."

Bad debts were at least going in the right direction.


Under the impairment section of the interim report for 31st December 2012 we learn.

"Net impaired,restructured and past due loans over 90 days were $80.2m (or 3.9% of net finance receivables – Net Impairment Ratio) as at 31 December 2012 – down from $90.5m (or 4.4% of net finance receivables) as at 30 June 2012. The level of impaired, restructured and past due loans are primarily due to the legacy non-core property book and are expected to continue to reduce as a percentage of total assets as lending in the core business grows and the non-core property book runs down."

It is interesting to see that the historical bad debt situation of 31st December 2011 has been revised upwards (from 4.2% to 4.4%) with the benefit of hindsight.

"The Net Impairment Ratio on the core business (excluding the non-core property book) was 1.7% as at 31 December 2012, compared to 1.8% as at 30 June 2012"

A new thing for Heartland here in quoting the bad debts only for their 'core' business. I am always suspicious when businesses introduce new metrics like this. In this case the motive is obvious - trying to convince shareholders old bad property debt is a legacy issue. The problem is closing one eye to make half the debt go away, doesn't actually cause half the bad debt to go away.

SNOOPY

[Snoopy]

Under the impairment section of the interim report for 31st December 2012 we learn.

"Net impaired,restructured and past due loans over 90 days were $80.2m (or 3.9% of net finance receivables – Net Impairment Ratio) as at 31 December 2012 – down from $90.5m (or 4.4% of net finance receivables) as at 30 June 2012. The level of impaired, restructured and past due loans are primarily due to the legacy non-core property book and are expected to continue to reduce as a percentage of total assets as lending in the core business grows and the non-core property book runs down."

It is interesting to see that the historical bad debt situation of 31st December 2011 has been revised upwards (from 4.2% to 4.4%) with the benefit of hindsight.

"The Net Impairment Ratio on the core business (excluding the non-core property book) was 1.7% as at 31 December 2012, compared to 1.8% as at 30 June 2012"

A new thing for Heartland here in quoting the bad debts only for their 'core' business. I am always suspicious when businesses introduce new metrics like this. In this case the motive is obvious - trying to convince shareholders old bad property debt is a legacy issue. The problem is closing one eye to make half the debt go away, doesn't actually cause half the bad debt to go away.


New tactics for the HY2014 report. The word 'impairment' isn't even mentioned in the text, which is I suppose another way to make any impaired loans go away.

In the table on page 4 there is at least a nod to 'impaired asset expense' down to $3.3m (HY2014, ended 31st December 2013) from $5.3m in the corresponding prior period (HY2013) and $22.5m in the full year to 30th June 2013. By simple subtraction the bad debt expense for the period 1st January 2013 to 30th June 2013 ( 2HY2013 ) was $22.5m - $5.3m = $17.2m.

'Impaired Asset Expense' is code for having lost all hope. Almost no chance of getting the money back. 'Restructured' and 'past due loans' do not fall under that category. So comparisom with the previous comparable period are - deliberately? - difficult to make.

SNOOPY

[Snoopy]

New tactics for the HY2014 report. The word 'impairment' isn't even mentioned in the text, which is I suppose another way to make any impaired loans go away.

In the table on page 4 there is at least a nod to 'impaired asset expense' down to $3.3m (HY2014, ended 31st December 2013) from $5.3m in the corresponding prior period (HY2013) and $22.5m in the full year to 30th June 2013. By simple subtraction the bad debt expense for the period 1st January 2013 to 30th June 2013 ( 2HY2013 ) was $22.5m - $5.3m = $17.2m.

'Impaired Asset Expense' is code for having lost all hope. Almost no chance of getting the money back. 'Restructured' and 'past due loans' do not fall under that category. So comparisom with the previous comparable period are - deliberately? - difficult to make.


On page 5 of the interim report there is a note (iv) to this effect:

"Total non-core property assets reduced by 19% in the six months up to 31st December 2013. As at this date, non-core property assets comparised net receivables of $25.6m and investment properties of $61.5m. We remain confident that future earnings will not be affected by these assets."

From the Interim Balance Sheet (p9) 'Finance Receivables' were $1,905.89m.

So "problem property assets" represent:

($25.6m+ $61.5m) / $1,905.89m = 4.6% of total finance receivables.

This is the worst result in two years for Heartland in its current form, topping the 4.4% from 31st December 2011. But that figure also included 'restructured ' and 'past due' loans.

Go to note 11 of the HY2014 report and you will find restructured assets of $3.994m on the books, together with past due loans of $19.518m. Now we can work out the total "Net impaired,restructured and past due loans over 90 days" at the last balance date:

($25.6m+ $61.5m) + $3.994m + $19.518m = $110.612m

Divide that by balance sheet receivables and you get the total doubtful debt ratio.

$110.612m / $1,905.89m = 5.8%

Not a pretty figure. No wonder HNZ changed their reporting metrics so they didn't have to tell you shareholders about it.

SNOOPY

[Harvey Specter]

Not a pretty figure. No wonder HNZ changed their reporting metrics so they didn't have to tell you shareholders about it.They fooled S&P.

If only if it wasn't for that dog, they would have got away with it.

[Beagle]

"Total non-core property assets reduced by 19% in the six months up to 31st December 2013. As at this date, non-core property assets comparised net receivables of $25.6m and investment properties of $61.5m. We remain confident that future earnings will not be affected by these assets."

Speaks for itself. You either believe the Directors or you don't and in the latter case you probably wouldn't own the shares.
Disc Happy to hold, every Bank has a few fleas in the closet.

[Snow Leopard]

Nice try Snoopy,

There are invalid assumptions, lack of understanding of what the figures represent, and general adding up of the wrong things in your posts.

Fortunately putting the wrong data in results in the wrong answer coming out, and they are doing a lot better than you [are determined to] believe.

Best Wishes
Paper Tiger

[percy]

They fooled S&P.

If only if it wasn't for that dog, they would have got away with it.

Just remember on this thread Snoopy's record has been 100% wrong.
S&P carry more weight with me.[and the market]
Disclosure.I own HNZ shares.Snoopy does not.
Further disclosure.I no longer read Snoopy's posts on this thread .

[nextbigthing]

I don't know if any of you guys watch family guy, but Paper Tiger and Snoopy remind me of Peter Griffin and the chicken.

[Snow Leopard]

I don't know if any of you guys watch family guy, but Paper Tiger and Snoopy remind me of Peter Griffin and the chicken.

Just Googled "family guy peter griffin and the chicken" so I think I know where your coming from but...
which character am I supposed to be?

Best Wishes
Paper Tiger

[nextbigthing]

Ha, I was just coming to edit that post to make it clear I had no idea who was Peter and who was the chicken. I guess I'll leave that for you two to fight it out :)

[Snow Leopard]

Under the impairment section of the interim report for 31st December 2012 we learn.

"Net impaired,restructured and past due loans over 90 days were $80.2m (or 3.9% of net finance receivables – Net Impairment Ratio) as at 31 December 2012 – down from $90.5m (or 4.4% of net finance receivables) as at 30 June 2012. The level of impaired, restructured and past due loans are primarily due to the legacy non-core property book and are expected to continue to reduce as a percentage of total assets as lending in the core business grows and the non-core property book runs down."...

So it suddenly occurred to me that I had not actually checked the Mar-14 disclosure statement (http://www.heartland.co.nz/uploadGallery/Legal/Heartland%20Bank%20disclosure%20statement%20Mar14. pdf) for the Bank (which was most of HNZ).
How remiss of me. :mellow:

Anyway that number of $80M2 (3.92%) from Dec-12 which was actually $42M4 (2.22%) at Dec-13 has blown back out to $44M6 (2.35%) at Mar.

On the old Capital Adequacy ratios the important one is Total Capital which stood at 14.71% against the minimum requirement of 12.00%

Their required buffer ratio remains at 0.00%. (Look it up for yourself if you do not believe me).

Otherwise profit at 3/4 time stands at $26M4.

Best Wishes
Paper Tiger

[Cool Bear]

So it suddenly occurred to me that I had not actually checked the Mar-14 disclosure statement (http://www.heartland.co.nz/uploadGallery/Legal/Heartland%20Bank%20disclosure%20statement%20Mar14. pdf) for the Bank (which was most of HNZ).
How remiss of me. :mellow:

Anyway that number of $80M2 (3.92%) from Dec-12 which was actually $42M4 (2.22%) at Dec-13 has blown back out to $44M6 (2.35%) at Mar.

On the old Capital Adequacy ratios the important one is Total Capital which stood at 14.71% against the minimum requirement of 12.00%

Their required buffer ratio remains at 0.00%. (Look it up for yourself if you do not believe me).

Otherwise profit at 3/4 time stands at $26M4.

Best Wishes
Paper Tiger

Hi PT, thanks for making me read the disclosure statement. You had me worried for a moment with the 0.00%.

[Snoopy]

Under the impairment section of the interim report for 31st December 2012 we learn.

"Net impaired,restructured and past due loans over 90 days were $80.2m (or 3.9% of net finance receivables – Net Impairment Ratio) as at 31 December 2012 "


Just checking some of these calculated results supplied by Heartland.

(1/2)AR2013 note 11 shows $2072.27m of gross financial receivables, less a $27.477m allowance for impairment gives total financial recivables of $2044.793m.

Go to note 17a to get the quality of financial receivables and we find:

At least 90 days past due $49.173m
Individually impaired $49.418m
Restructured assets $9.069m

That sums to $107.66m. Take off the allowance of $27.277m for impairment and I get $80.383m. That is close enough to the $80.2m quoted for me.

$80.383m / $2044.793m = 3.93%

That within rounding error is the same as the 3.9% quoted. So far so good.

SNOOPY

[Snoopy]

On page 5 of the interim report there is a note (iv) to this effect:

"Total non-core property assets reduced by 19% in the six months up to 31st December 2013. As at this date, non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m. We remain confident that future earnings will not be affected by these assets."

From the Interim Balance Sheet (p9) 'Finance Receivables' were $1,905.89m.

So "problem property assets" represent:

($25.6m+ $61.5m) / $1,905.89m = 4.6% of total finance receivables.


The 'Finance Receivables' on the balance sheet have already had a $34.214m provision for impairment taken off them. From note 11 'Gross Finance Receivables' were $1,940.064m



This is the worst result in two years for Heartland in its current form, topping the 4.4% from 31st December 2011. But that figure also included 'restructured ' and 'past due' loans.

Go to note 11 of the HY2014 report and you will find restructured assets of $3.994m on the books, together with past due loans of $19.518m. Now we can work out the total "Net impaired,restructured and past due loans over 90 days" at the last balance date:

($25.6m+ $61.5m) + $3.994m + $19.518m = $110.612m


Rexamining note 11, I may have double counted some of those problem property assets. The note says:

At least 90 days past due $19.518m
Individually impaired $53.1m
Restructured assets $3.994m

That sums to $76.712m. Take off a provision for impairment of $34.214m and I get $42.498m.

However that $76.712m does not correspond to the:

"non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m." (page 5 in same report)

which sum to $87.1m. Anyone know why the difference?



Divide that by balance sheet receivables and you get the total doubtful debt ratio.

$110.612m / $1,905.85m = 5.8%

Not a pretty figure. No wonder HNZ changed their reporting metrics so they didn't have to tell you shareholders about it.


$42.498m / $1,905.85 = 2.2%

A much less worrying result. Apologies to all those Heratland shareholders that suffered a heart attack yesterday as a result of my calculations. I wonder why HNZ chose to stop measuring bad debts this way?

SNOOPY

[Snoopy]

"Total non-core property assets reduced by 19% in the six months up to 31st December 2013. As at this date, non-core property assets comparised net receivables of $25.6m and investment properties of $61.5m. We remain confident that future earnings will not be affected by these assets."

Speaks for itself. You either believe the Directors or you don't and in the latter case you probably wouldn't own the shares.
Disc Happy to hold, every Bank has a few fleas in the closet.


Quite right Roger. I made no comment on the upcoming profit and have no reason to believe targets will not be met. I was highlighting the risk being taken to make the profit, an entirely different issue.

SNOOPY

[vorno]

Sorry... I had to break your 3-post streak!

[Snow Leopard]

...
At least 90 days past due $19.518m
Individually impaired $53.1m
Restructured assets $3.994m

That sums to $76.712m. Take off a provision for impairment of $34.214m and I get $42.498m.

However that $76.712m does not correspond to the:

"non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m." (page 5 in same report)

which sum to $87.1m. Anyone know why the difference?
...


BECAUSE

NOT ALL

non-core property assets

are

either at least 90 days past due;
or individually impaired;
or restructured.

AND

NOT ALL

assets

that are:
either at least 90 days past due;
or individually impaired;
or restructured.

are

non-core property assets

5918

Best Wishes
Paper Tiger

[Snoopy]

BECAUSE

NOT ALL

non-core property assets

are

either at least 90 days past due;
or individually impaired;
or restructured.


Your answer must be correct PT, as there is no other logical way to reconcile things.

However, I did think that the reason the 'non-core' property assets became 'non-core' was because they were difficult assets to manage. ' Difficult' in one of these the senses:

1/ Being at least 90 days past due OR
2/ individually impaired; OR
3/ restructured

I can't see why property assets that weren't in those three categories would get thrown in the 'non-core' box. But I guess subsequent buying interest in those property assets by turning them into cash made a lie to the original 'non-core' diagnosis.



AND

NOT ALL

assets

that are:
either at least 90 days past due;
or individually impaired;
or restructured.

are

non-core property assets


Yes, but if that were true would you not expect the sum total of all 'difficult assets' ($76.712m, supposedly including the non core property assets) to be greater than the declared value of 'non-core property ' assets alone ($87.1m)?

SNOOPY

[Cool Bear]

anybody has any clue why the whole day trading is dominated by small parcels of shares ranging from 50 to just 500+ for each trade? wonder what are they?

[Snoopy]

The half year report last year did not provide the same level of disclosure as the full year report. This has proved to be the case again in HY2013.

Under note 12 and as of 31st December 2012, the percentage of deposits from the Canterbury region has reduced from 42% six months previously down to 36%. Overall I see this as a good thing, even if some market share in Canterbury must continue to be sacrificed to improve the overall term deposit risk profile.

Note 17c re-emphasises that the credit provision as reached with RECL (the real estate credit limit mangement agreement) has been fully utilised. This in turn means any further writedowns will directly hit the HNZ balance sheet.

I get the impression that rebalancing the account risk is still a work in progress.


The half year report for HY2014 (to 31st December 2013) is as much of interest for what it doesn't say than what it does say.

In contrast to last year, Note 13 on 'Borrowings', makes no mention of the relatively high proportion of deposits from the Canterbury region. Perhaps many of those Cantabs with deposits followed Percy's advice and used their deposit money to buy Heartland shares when those deposits matured? In any instance the overall deposit book has shrunk very slightly from the full year balance date. So the rebalancing of regional risk doesn't reflect a lot more money coming in from other regions and growing the deposit book overall. I would have expected the overall deposit book to strengthen as Heartland's credit rating improves. But I can't see any real evidence for that in the HY2014 report.

The previous half year report had a section headed 'credit risk and asset quality'. That heading is no longer there in the latest HY report. Instead the 'Asset quality of Finance Receivables' information has migrated to the 'Finance Receivables' section. Of particular note is the fall in 'At least 90 days past due' receivables down to $19.5m, from $49.2m a year previously.

The 'Provision for impaired assets' has its own stand alone note (17).

The RECL (Real Estate Credit Limited) agreement for difficult property assets, much discussed in the HY2013 report, has been brought back in house. Overall though this report does not go into enough detail to get a great feel for customer concentration risk.

SNOOPY

[Beagle]

Snoopy - Standard and Poors is given access to a huge amount of information that is not in the public domain.

[Snoopy]

The half year report for HY2014 (to 31st December 2013) is as much of interest for what it doesn't say than what it does say.

In contrast to last year, Note 13 on 'Borrowings', makes no mention of the relatively high proportion of deposits from the Canterbury region. In any instance the overall deposit book has shrunk very slightly from the full year balance date. So the rebalancing of regional risk doesn't reflect a lot more money coming in from other regions and growing the deposit book overall.


More information is revealed in the Heartland Bank disclosue statement for the period.

http://www.heartland.co.nz/uploadGallery/Legal/Heartland%20Bank%20disclosure%20statement%20Dec13. pdf

Note 19b contains enough information to work out the percentage of deposits coming from Canterbury as at 31st December 2013:

$716.290m / $2,076.968m = 34.4%

That compares to 36% from a year earlier. So the cantabs are obviously still a key part of the deposit book



The previous half year report had a section headed 'credit risk and asset quality'. That heading is no longer there in the latest HY report. Instead the 'Asset quality of Finance Receivables' information has migrated to the 'Finance Receivables' section. Of particular note is the fall in 'At least 90 days past due' receivables down to $19.5m, from $49.2m a year previously.


More information on this under note 16a.

The $19.6m is made up of $4.1m (rural) , $2.1m (property) $0.4m (residential), $10.5m (other) and $1.8m (all other). Seems funny to distinguish 'Other' from 'All other' but there you go!

SNOOPY

[noodles]

I would have expected the overall deposit book to strengthen as Heartland's credit rating improves. But I can't see any real evidence for that in the HY2014 report.
Snoopy, the credit rating upgrade was after the half year report.

[Beagle]

Maybe the inquisitive beagle should just roll over and be a good dog and accept that Standard and Poors have access to far more information than said Beagle can get his mischevious snout into :)

[Snow Leopard]

Your answer must be correct PT, as there is no other logical way to reconcile things.

5922


However, I did think that the reason the 'non-core' property assets became 'non-core' was because they were difficult assets to manage. ' Difficult' in one of these the senses:

1/ Being at least 90 days past due OR
2/ individually impaired; OR
3/ restructured

I can't see why property assets that weren't in those three categories would get thrown in the 'non-core' box. But I guess subsequent buying interest in those property assets by turning them into cash made a lie to the original 'non-core' diagnosis.

5923


Yes, but if that were true would you not expect the sum total of all 'difficult assets' ($76.712m, supposedly including the non core property assets) to be greater than the declared value of 'non-core property ' assets alone ($87.1m)?

5921

Best Wishes
5924

[Snow Leopard]

5926

Best Wishes
Paper Tiger

[Cool Bear]

5926

Best Wishes
Paper Tiger
that is brilliant!!

[Cool Bear]

Ummm ... The inquisitive beagle is doing the right thing. Right or wrong the conclusions may be but posters who do not provide counter evidence should probably think twice. Keep going Snoopy.
agreed, got to admire the effort put in by Snoopy too.

[Snoopy]

Time to look at the Liquidity Buffer ratio for 2013

<snip>

1/ I understand 'liquidity' to be a balance between the maturity profile of current debenture holders VERSES
2/the loan periods associated with those on lent funds are unknown,

then my analysis comes to a full stop (again).

<snip>



Today I want to look at the ability of Heartland to match their cash ingoings and cash outgoings over specified time periods. This goes back to what happened during the financial crisis where some finance companies declared a moritorium on payments to debenture holders because although solvent on paper, they ran out of cash to make the payments. My previous attempts at doing this were not very successful due to lack of disclosire in the annual and half year reports. Since Heartland has become a bank more information has come into the public domain . This time I will look at the end of period positional statement supplied to the reserve bank:

http://www.heartland.co.nz/uploadGallery/Legal/Heartland%20Bank%20disclosure%20statement%20Dec13. pdf

to see if I can do a better job.

Heartland looks at this issue under note 20

-----

20 Interest rate risk

Interest rate risk is the risk that the value of assets or liabilities will change because of changes in interest rates or that market interest rates may change and thus after the margin between interest earning assets and interest earning liabilities. Interest rate risk for the banking group refers to the risk of loss due to holding assets and liabilities that may mature or re-price in different periods. Interest rate risk is mitigated by managment's frequent monitoring of interest rate repricing profiles of borrowings and finance receivables and where appropriate the use of derivative instruments"

----

SNOOPY

[Snoopy]

Today I want to look at the ability of Heartland to match their cash ingoings and cash outgoings over specified time periods. This goes back to what happened during the financial crisis where some finance companies declared a moritorium on payments to debenture holders because although solvent on paper, they ran out of cash to make the payments. My previous attempts at doing this were not very successful due to lack of disclosire in the annual and half year reports. Since Heartland has become a bank more information has come into the public domain . This time I will look at the end of period positional statement supplied to the reserve bank:

http://www.heartland.co.nz/uploadGallery/Legal/Heartland%20Bank%20disclosure%20statement%20Dec13. pdf

to see if I can do a better job.

Heartland looks at this issue under note 20

-----

20 Interest rate risk

Interest rate risk is the risk that the value of assets or liabilities will change because of changes in interest rates or that market interest rates may change and thus after the margin between interest earning assets and interest earning liabilities. Interest rate risk for the banking group refers to the risk of loss due to holding assets and liabilities that may mature or re-price in different periods. Interest rate risk is mitigated by managment's frequent monitoring of interest rate repricing profiles of borrowings and finance receivables and where appropriate the use of derivative instruments"

----



I am listing a comparison of the maturing assets and liabilities over different time periods for HY2014, and a comparison of the same figures six months earlier at FY2013. In the short term ( 0-3 months ) it is critical that financial assets exceed financial liabilities. Looking further out this is not so important because the bank has time to manipulate the figures so they do match by due date. Nevertheless I think the comparative position between time periods is worth noting as this will provide a measure of how much work the bank will have to do.



HY2014 (as at 31st December 2013)


Time PeriodFinancial Assets less Financial Liabilities add Derivative Adjustmentequals Remainder


(0-3 months)$1,545.827m$1,219.768m$196.815m $522.874m


(3-6 months)$127.456m$331.145m-$20.335m-$224.024m


(6-12 months)$181.345m$402.912m-$38.850m -$260.417m


(1-2 years)$290.823m$69,530m-$86.325m$144.168m


(2+ years)$199.587m$54.113m$-71.305m$74.169m





FY2013 (as at 30th June 2013)


Time PeriodFinancial Assets less Financial Liabilities add Derivative Adjustmentequals Remainder


(0-3 months)$744.290m $1,011.916m 0-$267.626m


(3-6 months)$4.250m $339.250m0-$335.0m


(6-12 months)$21.332m$373.581m 0-$352.249m


(1-2 years)$7.059m$111.129m0-$104.070m


(2+ years)$3.032m$52.743m 0 -$49.711m




The 'Finance Assets' above are the various loans that Heartland have, like seasonal finance used by farmers for instance, that Heartland plan to get back with interest. The 'Finance Liabilities' amongst other things are the money that fixed interest investors loan to Heartland to try and get a bit more return than is available in the mainstream banks.

For a fixed interest investor, they want to see a positive number for the 'remainder' (highlighted in bold) , because that means Heartland bank has enough money to pay them should they choose to redeem their investment. From this perspective Heartland are in a much better position now than six months ago.

But conversely, as a shareholder, you could look at the same data and say:

"Not good! Heartland does not have enough loans out there in the market to be making best use of the funds available to them."

So what to make of this overall? I am not sure. Any opinions?

SNOOPY

[Cool Bear]

HY2014

Financial Assets (0-3 months), Financial Liabilities (0-3 months), Derivative Adjustment, Remainder:
$1,545.827m, $1,219.768m , $196.815m $522.874m
Financial Assets (3-6 months), Financial Liabilities (3-6 months), Derivative Adjustment, Remainder: $127.456m, $331.145m, -$20.335m ,-$224.024m
Financial Assets (6-12 months), Financial Liabilities (6-12 months), Derivative Adjustment, Remainder: $181.345m, $402.912m , -$38.850m, -$260.417m
Financial Assets (1-2 years), Financial Liabilities (1-2 years), Derivative Adjustment, Remainder: $290.823m,$69,530m -$86.325m,$144.168m
Financial Assets (2+ years), Financial Liabilities (2+ years), Derivative Adjustment, Remainder:
$199.587m, $54.113m, $-71.305m ,$74.169m

FY2013

Financial Assets (0-3 months), Financial Liabilities (0-3 months), Derivative Adjustment, Remainder: $744.290m $1,011.916m, 0, -$267.626m
Financial Assets (3-6 months), Financial Liabilities (3-6 months), Derivative Adjustment, Remainder: $4.250m, $339.250m, 0 ,-$335.0m
Financial Assets (6-12 months), Financial Liabilities (6-12 months), Derivative Adjustment, Remainder: $21.332m, $373.581m, 0, -$352.249m
Financial Assets (1-2 years), Financial Liabilities (1-2 years), Derivative Adjustment, Remainder:
$7.059m, $111.129m, 0, -$104.070m
Financial Assets (2+ years), Financial Liabilities (2+ years), Derivative Adjustment, Remainder:
$3.032m ,$52.743m, 0 , -$49.711m

.
That is one huge improvement for HNZ.

[Snow Leopard]

That is one huge improvement for HNZ.

No. Snoopy has totally the wrong data for FY2013 (Dec-12).

Best Wishes
Paper Tiger

[percy]

No. Snoopy has totally the wrong data for FY2013 (Dec-12).

Best Wishes
Paper Tiger

No surprises there!!!! lol.

[Snow Leopard]

Heartlands Interest Rate Risk:

Net & Accumulative positions at 31-Dec-13

0-3 Months: $523M $523M
3-6 Months: (224M) $299M
6-12 Months: ($260M) $38M
1-2 Years: $144M $182M
2+ Years: $74M $257M

and for comparison Net & Accumulative positions at 31-Dec-12

0-3 Months: $351M $351M
3-6 Months: (168M) $183M
6-12 Months: ($288M) ($105M)
1-2 Years: $261M $156M
2+ Years: $101M $257M

What does this mean?
The periods represent the time frame in which the bank can change the interest rate it receives on loans and pays on deposits and the first column the amount that loans exceeds deposits for that time frame.

So in a hypothetical situation where they cut the interest rate on 31-Dec-12 across the board by 1%pa then after three months the interest received on loans will have dropped by $300K per month (approx $351 * 1% / 12) more than the interest paid on deposits. (So this is a net reduction in revenue)

Obviously if the across board change was a rise of 1% then they would be a $300K per month (still approx) gain in revenue.

In the real world of course it is a lot more complicated than these simple scenarios.

Best Wishes
Paper Tiger

[kizame]

Really this is totally beyond my understanding,but what is interesting is that two obviously knowledgeable balance sheet analysts get two different perspectives.If that is the case and it is not that simple to come to a conclusion,how then would two different auditors view the information? Probably they work to the same rules I guess.
This is all taking into account though that you are both viewing the same numbers.

[percy]

Really this is totally beyond my understanding,but what is interesting is that two obviously knowledgeable balance sheet analysts get two different perspectives.If that is the case and it is not that simple to come to a conclusion,how then would two different auditors view the information? Probably they work to the same rules I guess.
This is all taking into account though that you are both viewing the same numbers.

Easy to understand.
One poster has a record for being correct,while the other has a record of being 100% wrong on this thread!

[percy]

Heartlands Interest Rate Risk:

Net & Accumulative positions at 31-Dec-13

0-3 Months: $523M $523M
3-6 Months: (224M) $299M
6-12 Months: ($260M) $38M
1-2 Years: $144M $182M
2+ Years: $74M $257M

and for comparison Net & Accumulative positions at 31-Dec-12

0-3 Months: $351M $351M
3-6 Months: (168M) $183M
6-12 Months: ($288M) ($105M)
1-2 Years: $261M $156M
2+ Years: $101M $257M

What does this mean?
The periods represent the time frame in which the bank can change the interest rate it receives on loans and pays on deposits and the first column the amount that loans exceeds deposits for that time frame.

So in a hypothetical situation where they cut the interest rate on 31-Dec-12 across the board by 1%pa then after three months the interest received on loans will have dropped by $300K per month (approx $351 * 1% / 12) more than the interest paid on deposits. (So this is a net reduction in revenue)

Obviously if the across board change was a rise of 1% then they would be a $300K per month (still approx) gain in revenue.

In the real world of course it is a lot more complicated than these simple scenarios.

Best Wishes
Paper Tiger

In the real world the head of treasury at any bank with be altering deposit rates to match maturities,and credit demand,and where he sees future interest rates.

[Cool Bear]

Really this is totally beyond my understanding,but what is interesting is that two obviously knowledgeable balance sheet analysts get two different perspectives.If that is the case and it is not that simple to come to a conclusion,how then would two different auditors view the information? Probably they work to the same rules I guess.
This is all taking into account though that you are both viewing the same numbers.
As someone who have a bit of accounting knowledge (in my previous life), I can say that PT is the correct one in this case. As Percy mentioned, PT has a record for being correct.

[Snow Leopard]

There's our man again!

Ensuring that the last sale is way below the VWAP (Volume Weighted Average Price) for the day!

Do they think we're stupid? ... Probably not. Just the "mums and dads".

That said, isn't it time this behaviour was investigated?

Todays' last trade that set the low was at 2pm with two off market trades at a high price after that.


In the last 3 months (62 trading days):

Close = low (low<high): 27
Closes = high (low<high): 24
Close = low = high: 10
Low < close < high: 1

Best Wishes
Paper Tiger

[winner69]

Todays' last trade that set the low was at 2pm with two off market trades at a high price after that.


In the last 3 months (62 trading days):

Close = low (low<high): 27
Closes = high (low<high): 24
Close = low = high: 10
Low < close < high: 1

Best Wishes
Paper Tiger

So steady and so boring eh Tiger

Me a bit bored as well so looked at the last 60 days as well

Those 62 days price moved from 88 to 89, Lowest close 85 (once) and highest close 90 (4 times)
Average has been 88
Today at 89 one of the better days, majority of closes have been 87/88 as below

Frequency
$0.85..... 1
$0.86..... 9
$0.87..... 22
$0.88..... 15
$0.89..... 9
$0.90..... 4
$0.91..... 0

Watching HNZ shareprice is like watching paint dry .... so exciting

If anything a slight upward bias to the price .... but only slight

Best thing that could have happened is maybe you collected a dividend along the way .... yes

Sorry guys .... not very exciting .... at lest it ain't gone down

Might buy one seeing it so well positioned

[Cool Bear]

slow and steady with a slight upward bias is all good

[winner69]

slow and steady with a slight upward bias is all good

Its better to own banks than to put money into them

However way HNZ is going it maybe better to put money in then to own it

Hope the first statement comes true .... sometime

[percy]

The past 60 days have seen the following results for bank share prices.
ANZ - 0.003%
CBA + 4.9%
NAB -6%
WBC -0.06%
Heartland + 1.1%
Nice and steady.All the time getting "more runs on the board." And what makes it truly exciting for shareholders is the fully imputated dividend.[and great dividend reinvestment plan.]
And winner69 the dividend is better than the deposit rate,so that statement holds true.And I expect Heartland's growing earnings will see a steady increasing dividend.

[winner69]

Fair enough Percy

Bit worried about that Interest Rate Risk though

[kizame]

The past 60 days have seen the following results for bank share prices.
ANZ - 0.003%
CBA + 4.9%
NAB -6%
WBC -0.06%
Heartland + 1.1%
Nice and steady.All the time getting "more runs on the board." And what makes it truly exciting for shareholders is the fully imputated dividend.[and great dividend reinvestment plan.]
And winner69 the dividend is better than the deposit rate,so that statement holds true.And I expect Heartland's growing earnings will see a steady increasing dividend.

So looking at the average PE ratio of those four banks 14.54
HNZ should have a share price based on $34 mil net prof of $1.06 so that providing those other share prices don't retreat too much,is our immediate target.

[winner69]

So looking at the average PE ratio of those four banks 14.54
HNZ should have a share price based on $34 mil net prof of $1.06 so that providing those other share prices don't retreat too much,is our immediate target.

If it was that easy mate

Why not use regional US banks as a benchmark ....PE of 22 ......gives HNZ a value of 160 odd

That should be the target I reckon

[percy]

Fair enough Percy

Bit worried about that Interest Rate Risk though

Don't be.!!!
As we both know rising interest rates mean bigger margins for banks.!!!
Bigger margins result in bigger profits.!

[percy]

If it was that easy mate

Why not use regional US banks as a benchmark ....PE of 22 ......gives HNZ a value of 160 odd

That should be the target I reckon

Tottally agree!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! lol.
Forecast EPS 8.8cents ..x PE of 22 ..gives a share price of $1.96.!!!!!! Fantastic.
Keep up the good work Winner69.....I love it.!!!! lol.

[kizame]

If it was that easy mate

Why not use regional US banks as a benchmark ....PE of 22 ......gives HNZ a value of 160 odd

That should be the target I reckon

Yep great target,but I think Heartland (who have wonderful adds by the way)would need to make a juicy shareholder friendly aquisition.
A good sized aquisition. I have a lot riding on these bankers.

[percy]

Yep great target,but I think Heartland (who have wonderful adds by the way)would need to make a juicy shareholder friendly aquisition.
A good sized aquisition. I have a lot riding on these bankers.

The Sentinel acquisition certainly was/is a more than "good sized" acquisition.Market leader in a fast growing sector.Fantastic.!!

[Beagle]

Reality Check.

Average PE of the financials sector in the States is only 12, (source CNBC).
Heartland by its nature and the type of lending is riskier than the main Australian banks on an average PE of 14 so a fair PE has to account for the extra risk.

I reckon for where the company is at, (needs more runs on the board), a fair PE at present is 11 - 11.5 based on current years projected earnings.

As the company continues to prove itself over the next few years we could see that PE expand very gradually to
12.5 - 13.0.

[winner69]

Reality Check.

Average PE of the financials sector in the States is only 12, (source CNBC).
Heartland by its nature and the type of lending is riskier than the main Australian banks on an average PE of 14 so a fair PE has to account for the extra risk.

I reckon for where the company is at, (needs more runs on the board), a fair PE at present is 11 - 11.5 based on current years projected earnings.

As the company continues to prove itself over the next few years we could see that PE expand very gradually to
12.5 - 13.0.

OK lets be generous and say a PE of 12 ..... shareprice 88

But that's the market is saying at the moment ....stupid market just does not get it

Agree Roger prove themselves as Percy says they will and maybe a slight rerating .... but not that match. Seems earnings growth is the key

[Snoopy]

No. Snoopy has totally the wrong data for FY2013 (Dec-12).


Have been corresponding with PT off line and he has informed me the above date is a typo. But there is an inconsistancy with date interpretation on this thread. So I need to put a stake in the ground to mark where I stand, and what the abbreviations I use stand for. There is no 'correct' way to do this. I am just telling you my way.

To the general public the calendar year starts in January and ends in December. For 2014, I abbreviate this to CY2014.

Sharemarket listed companies though, can choose the start date for their financial year to be any month. With Heartland it starts in July and ends in June. I usually number the financial year based on whatever number the company puts on the front cover of their report. This years report is not out yet. But for the last full year reported period 01-07-2012 to 30-06-2013, the cover said 2013. So right now we are in the period 1st July 2013 to 30th June 2014 which I call FY2014.

'Turners' (TUA) have a financial year that starts on 1st January and ends on 31st December. For Turners CY2103 = FY2013. BUt this is the rare exception. Usually CY20xx and FY20xx refer to different staggered start points in time.

Back to the specific example: FY2013 as I write it, with reference to Heartland, does not refer to the annual time period ending 31st December 2012, nor to the period ending 31st December 2013. It refers to the 12 months ending 30th June 2013.

SNOOPY

[percy]

I am happy with either a PE of 11 or 12,[depending on the company's growth guidance].I note FB are projecting EPS growth of 12.5% for year ended 30/6/2015.
On earnings projected at 8.8 cents year ended 30/6/2014 a PE of 11 would give a SP of 96.8 cents while a PE of 12 would give a SP of $1.056 cents.
Until we have guidance from the company we are only guessing at 2015 earnings.Again should we agree with Forsyth Barr's research dated 3rd April 2014,they project 2015 earnings per share of 9.9cents.On PE of 11 that is a SP of $1.089 and at a PE of 12 that is a SP of $1.188.
Roger it may pay to consider using PEGD [which includes dividends] when comparing bank shares.I think Heartlands risk is more than compensated by the higher dividend yield, which is also fully imputed. So dividend yield may be just as an important ratio when comparing Aussie banks to HNZ.
Here is a look into my mind.!!! PE 10, dividend 6%, growth 12% PEG 10 div by 12 = .833 [well under 1]
or PEGD PE 10 divided by 18 [div 6% plus growth 12] gives PEGD of .55555 . You can see why I like Heartland.
No allowance has been made for the advantages shareholders gain from dividend reinvestment.

[Snoopy]

HY2014 (as at 31st December 2013)

Financial Assets (0-3 months), Financial Liabilities (0-3 months), Derivative Adjustment, Remainder:
$1,545.827m, $1,219.768m , $196.815m $522.874m
Financial Assets (3-6 months), Financial Liabilities (3-6 months), Derivative Adjustment, Remainder: $127.456m, $331.145m, -$20.335m ,-$224.024m
Financial Assets (6-12 months), Financial Liabilities (6-12 months), Derivative Adjustment, Remainder: $181.345m, $402.912m , -$38.850m, -$260.417m
Financial Assets (1-2 years), Financial Liabilities (1-2 years), Derivative Adjustment, Remainder: $290.823m,$69,530m -$86.325m,$144.168m
Financial Assets (2+ years), Financial Liabilities (2+ years), Derivative Adjustment, Remainder:
$199.587m, $54.113m, $-71.305m ,$74.169m

FY2013 (as at 30th June 2013)

Financial Assets (0-3 months), Financial Liabilities (0-3 months), Derivative Adjustment, Remainder: $744.290m $1,011.916m, 0, -$267.626m
Financial Assets (3-6 months), Financial Liabilities (3-6 months), Derivative Adjustment, Remainder: $4.250m, $339.250m, 0 ,-$335.0m
Financial Assets (6-12 months), Financial Liabilities (6-12 months), Derivative Adjustment, Remainder: $21.332m, $373.581m, 0, -$352.249m
Financial Assets (1-2 years), Financial Liabilities (1-2 years), Derivative Adjustment, Remainder:
$7.059m, $111.129m, 0, -$104.070m
Financial Assets (2+ years), Financial Liabilities (2+ years), Derivative Adjustment, Remainder:
$3.032m ,$52.743m, 0 , -$49.711m



Ok folks I have made a mistake above, but it is not the mistake that PT thinks. Time periods are correct, as I was not trying to compare year with year as PT assumed. I wanted a six monthly comparison. But the data should read as follows (first section of figures for HY2014 was correct):


HY2014 (as at 31st December 2013)



Financial Assets (0-3 months)
Financial Liabilities (0-3 months)
Derivative Adjustment
Remainder


$1,545.827m
$1,219.768m
$196.815m
$522.874m





Financial Assets (3-6 months)
Financial Liabilities (3-6 months)
Derivative Adjustment
Remainder


$127.456m
$331.145m
-$20.335m
-$224.024m





Financial Assets (6-12 months)
Financial Liabilities (6-12 months)
Derivative Adjustment
Remainder


$181.345m
$402.912m
-$38.850m
-$260.417m





Financial Assets (1-2 years)
Financial Liabilities (1-2 years)
Derivative Adjustment
Remainder


$290.823m
$69,530m
-$86.325m
$144.168m





Financial Assets (2+ years)
Financial Liabilities (2+ years)
Derivative Adjustment
Remainder


$199.587m
$54.113m
$-71.305m
$74.169m




FY2013 (as at 30th June 2013)



Financial Assets (0-3 months)
Financial Liabilities (0-3 months)
Derivative Adjustment
Remainder


$1,589.306m
$1,220.880m
$179.350m
$546.776m





Financial Assets (3-6 months)
Financial Liabilities (3-6 months)
Derivative Adjustment
Remainder


$125.518m
$339.250m
$18.700m
-$232.432m





Financial Assets (6-12 months)
Financial Liabilities (6-12 months)
Derivative Adjustment
Remainder


$213.370m
$373.581m
-$45.330m
-$205.541m





Financial Assets (1-2 years)
Financial Liabilities (1-2 years)
Derivative Adjustment
Remainder


$229.096m
$111.129m
-$61.200m
$56.767m





Financial Assets (2+ years)
Financial Liabilities (2+ years)
Derivative Adjustment
Remainder


$191.201m
$52.743m
-$54.120m
$84.338m



SNOOPY

[noodles]

I am happy with either a PE of 11 or 12,[depending on the company's growth guidance].I note FB are projecting EPS growth of 12.5% for year ended 30/6/2015.
On earnings projected at 8.8 cents year ended 30/6/2014 a PE of 11 would give a SP of 96.8 cents while a PE of 12 would give a SP of $1.056 cents.
Until we have guidance from the company we are only guessing at 2015 earnings.Again should we agree with Forsyth Barr's research dated 3rd April 2014,they project 2015 earnings per share of 9.9cents.On PE of 11 that is a SP of $1.089 and at a PE of 12 that is a SP of $1.188.
Roger it may pay to consider using PEGD [which includes dividends] when comparing bank shares.I think Heartlands risk is more than compensated by the higher dividend yield, which is also fully imputed. So dividend yield may be just as an important ratio when comparing Aussie banks to HNZ.
Here is a look into my mind.!!! PE 10, dividend 6%, growth 12% PEG 10 div by 12 = .833 [well under 1]
or PEGD PE 10 divided by 18 [div 6% plus growth 12] gives PEGD of .55555 . You can see why I like Heartland.
No allowance has been made for the advantages shareholders gain from dividend reinvestment.

Great post Percy. I think your posts highlights how little downside risk there is in the price. If we saw a strong FY15 forecast and a change in sentiment towards the stock (to a pe of 13), I think we would see 1.20 very quickly.

The reverse mortgage business is going to help a lot of old people enjoy their retirement. This will also boost the NZ economy. Bowls clubs around the country are buzzing:)

DISC: Hold shares in HNZ and enjoy a good ramp

[kizame]

Forecast

Heartland will shortly be releasing its results for the first half of FY2014. Net profit after tax is expected to be around $16.5 million and in line with the forecast full year outcome of $34-$37 million for FY2014. Heartland’s forecast for FY2015 is yet to be finalised and more detailed financials will be available sometime following settlement of the acquisition. Taking all relevant factors into consideration including acquisition and integration costs expected to be incurred in FY2015, the underlying business, together with the contribution from the acquisition, is likely to produce a full year result for FY2015 of between $42-44 million of net profit after tax. See the full release attached to this announcement for further details of Heartland’s forecast financial information.

I would have thought this was enough of a guidance for now,but yep a final guidance is anticipated with relish ha.

[noodles]

Forecast

Heartland will shortly be releasing its results for the first half of FY2014. Net profit after tax is expected to be around $16.5 million and in line with the forecast full year outcome of $34-$37 million for FY2014. Heartland’s forecast for FY2015 is yet to be finalised and more detailed financials will be available sometime following settlement of the acquisition. Taking all relevant factors into consideration including acquisition and integration costs expected to be incurred in FY2015, the underlying business, together with the contribution from the acquisition, is likely to produce a full year result for FY2015 of between $42-44 million of net profit after tax. See the full release attached to this announcement for further details of Heartland’s forecast financial information.

I would have thought this was enough of a guidance for now,but yep a final guidance is anticipated with relish ha.
I was talking about fy15 guidance

[percy]

Forecast

Heartland will shortly be releasing its results for the first half of FY2014. Net profit after tax is expected to be around $16.5 million and in line with the forecast full year outcome of $34-$37 million for FY2014. Heartland’s forecast for FY2015 is yet to be finalised and more detailed financials will be available sometime following settlement of the acquisition. Taking all relevant factors into consideration including acquisition and integration costs expected to be incurred in FY2015, the underlying business, together with the contribution from the acquisition, is likely to produce a full year result for FY2015 of between $42-44 million of net profit after tax. See the full release attached to this announcement for further details of Heartland’s forecast financial information.

I would have thought this was enough of a guidance for now,but yep a final guidance is anticipated with relish ha.

Heartland's result for the first half of FY 2014 was announced on 25th February.
I am awaiting a further update. I am expecting it when the full year results to 30/6/2014 is announced late August,or I may have to wait until the AGM.

[winner69]

I was talking about fy15 guidance

There next guidance for F15 better be bloody good and a lot better than $42m-$44m or else acquisition going to take some time to be beneficial to shareholders

Nov 1 2013 at AGM guidance for F14 was the much touted $34m-$37m. This has been reaffirmed at half year announcement and as part of acquisition presentations. As at last November F14 EPS was 9.3 cents a share

The F15 guidance of $42m-$44m has been given twice. We don't really know yet. Hopefully Percy doesn't have to wait until the AGM for a new number. So F15 earnings on latest guidance is 9.3 cents a share

The numbers seem the same to me ... where's the growth from Nov13 position (pre acquisition) to where they say they going to in F15 (post acquisition)?

So hopefully next guidance will be heaps more than $42m-$44m.

But whatever most will only listen to what they want too and it all will be bright and rosy.

Percy - the rata dedicated to you is growing strongly. Was a good summer and a lot taller than a year ago. Hopefully HNZ will grow like this rata and like HNZ did by giving the business more 'fuel' I gave the rata a handful of special fertiliser the other day and blessed it again.

[Beagle]

I am happy with either a PE of 11 or 12,[depending on the company's growth guidance].I note FB are projecting EPS growth of 12.5% for year ended 30/6/2015.
On earnings projected at 8.8 cents year ended 30/6/2014 a PE of 11 would give a SP of 96.8 cents while a PE of 12 would give a SP of $1.056 cents.
Until we have guidance from the company we are only guessing at 2015 earnings.Again should we agree with Forsyth Barr's research dated 3rd April 2014,they project 2015 earnings per share of 9.9cents.On PE of 11 that is a SP of $1.089 and at a PE of 12 that is a SP of $1.188.Roger it may pay to consider using PEGD [which includes dividends] when comparing bank shares.I think Heartlands risk is more than compensated by the higher dividend yield, which is also fully imputed. So dividend yield may be just as an important ratio when comparing Aussie banks to HNZ.
Here is a look into my mind.!!! PE 10, dividend 6%, growth 12% PEG 10 div by 12 = .833 [well under 1]
or PEGD PE 10 divided by 18 [div 6% plus growth 12] gives PEGD of .55555 . You can see why I like Heartland.
No allowance has been made for the advantages shareholders gain from dividend reinvestment.

Good post. We're on the same page mate and that price range is where I see it in 12 months time i.e SP appreciation in line with EPS growth. I don't really see any prospect for PE expansion for at least two years as the market likes a long track record of consistent growth and a higher PE is based on reputation earned, not given. The gross dividend yeild of circa 10%, (grossed up for the value of imputation credits), is highly attractive no question about it, even more so when its converted to more shares at a 2.5% discount :)

[percy]

Winner69.Glad the Rata is growing strongly.I am sure it is because of the loving care you have given.!
Roger.PE expansion will take time,agreed.Bit like the Rata.Loving care,results in strong growth.
Not really looking at 2015 projections yet.Keen to see 2014's result first.Will it be nearer $34mil or $37mil? [I will be happy with either]
Disclosure.I distrust any future projection for more than one year out.It is "pie in the sky" to me.This distrust has come from many years of sharemarket investing. It is just how I feel.

[SCOTTY]

Winner69.Glad the Rata is growing strongly.I am sure it is because of the loving care you have given.!
Roger.PE expansion will take time,agreed.Bit like the Rata.Loving care,results in strong growth.
Not really looking at 2015 projections yet.Keen to see 2014's result first.Will it be nearer $34mil or $37mil? [I will be happy with either]
Disclosure.I distrust any future projection for more than one year out.It is "pie in the sky" to me.This distrust has come from many years of sharemarket investing. It is just how I feel.

Like Heartland, I trust that the Rata is growing lots of new big branches

[Snoopy]

5926



Good piece of graphic work there PT. So perhaps it is appropriate if I express my bad debt question of post 3496 in 'graphical form'.

From page 16 under Note 11 on 'finance receivables', in the latest Heartland Interim report dated 31st December 2013:

> 90 days past due $19.518m
Impaired $53.100m
Restructired $3.994m

Add those three together $76.612m

Going back to PTs diagram, this $76.612m manifests itself as an area taken up by the 'bush green' and 'ocean blue' lower section.
The 'non core property' bit is the 'ocean blue' bottom RH corner.

From page 5 of the latest Heartland Interim report dated 31st December 2013, under the heading "non-core property"
"As at this date (31-12-2013) non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m."

That adds up to $87.1m, and that number should manifest itself as the area of the ocean blue section.

The problem is $87.1m actually corresponds to an equal to the whole of the 'bush green' and 'ocean blue' area and not only that, it also
intrudes into the 'lime green' and 'sky blue' areas as well.

IOW the ocean blue 'block of debt' is too big, and won't fit into PTs carefully drawn diagram as he has drawn it.

SNOOPY

[Snow Leopard]

http://www.sharetrader.co.nz/attachment.php?attachmentid=5926

Good piece of graphic work there PT.

I know. It is hard to believe that I am not a professional graphic designer.


So perhaps it is appropriate if I express my bad debt question of post 3496 in 'graphical form'.

From page 16 under Note 11 on 'finance receivables', in the latest Heartland Interim report dated 31st December 2013:

> 90 days past due $19.518m
Impaired $53.100m
Restructired $3.994m

Add those three together $76.612m

Going back to PTs diagram, this $76.612m manifests itself as an area taken up by the 'bush green' and 'ocean blue' lower section.

So far this is correct.


The 'non core property' bit is the 'ocean blue' bottom RH corner.

No, this is where your beliefs are leading you astray.
The non-core property is the complete right hand sky blue + ocean blue column.


From page 5 of the latest Heartland Interim report dated 31st December 2013, under the heading "non-core property"
"As at this date (31-12-2013) non-core property assets comprised net receivables of $25.6m and investment properties of $61.5m."

That adds up to $87.1m, and that number should manifest itself as the area of the ocean blue section.

Again, this is the entire right hand multi hue blue column.
Non core just means that they do not see these property assets as part of the business long-term.
Some of them are more that 90 days behind, impaired or restructured,

BUT not all of them.


The problem is $87.1m actually corresponds to an equal to the whole of the 'bush green' and 'ocean blue' area and not only that, it also
intrudes into the 'lime green' and 'sky blue' areas as well.


So nearly finally, for the third and final time:
The $87.1M is the right hand blue column (actually I thought it was grey - must be colour blind)

The bush green + ocean grey/blue row is the $76.6M of '>90 days past due OR impaired OR restructed assets'.

Some of which are from the non core portfolio assets and some of which are from the other loans.


IOW the ocean blue 'block of debt' is too big, and won't fit into PTs carefully drawn diagram as he has drawn it.

SNOOPY

The graphic is 'just perfect'.

Best Wishes
Paper Tiger

[JohnnyTheHorse]

Some pretty blatant insider trading 30 mins before that announcement (most likely is anyway). This should be investigated.

[percy]

Well as I have stated, good companies usually surprise on the upside.Today's Heartland announcement confirms that statement;
Non-Core Property assets have reduced by 51% fom $87.1mil to $43mil in the five months ending 31st May 2014."Ahead of expectations."
Reverse Mortgages;"This has produced higher numbers in the sales pipeline than anticipated." "Progressing ahead of expectations."
Fantastic news.Well done Heartland.

[Snow Leopard]

Some pretty blatant insider trading 30 mins before that announcement (most likely is anyway). This should be investigated.

Would you be referring to all 641 shares across the 7 trades at $0.91 or just some of them!

Best Wishes
Paper Tiger

[winner69]

Heartland must have monitoring Snoopy / Paper Tiger and decided they better come clean and say things are all OK now instead of waiting for a better time to announce such good news

No mention f guidance ....must e disappointing to you guys

So $34-$37m is it for the year then .....and as no mention of guidance when coming out with good news one would think it more likely to be closer to $34m than $37m

[Xerof]

As at 31 May 2014 non-core property assets comprised of net receivables of $16.9m (22 receivables with an average balance of

Good of them to leave this number out. It will provide ample debate for Snoopdog, and the tiger.

:cool::cool:

clue: it's an easy sudoku - the answer is in the pdf attachment

[percy]

Heartland must have monitoring Snoopy / Paper Tiger and decided they better come clean and say things are all OK now instead of waiting for a better time to announce such good news

No mention f guidance ....must e disappointing to you guys

So $34-$37m is it for the year then .....and as no mention of guidance when coming out with good news one would think it more likely to be closer to $34m than $37m

$34mil to $37mil for year ended 30/6/2014 will be just fine for me.
What is SIGNIFICANT is the Reverse Mortgages sales pipeline is AHEAD of expectations.
The sale of Non-Core property is AHEAD of expectations.
Fantastic news.
I am happy to wait until Heartland give their next profit projection.May be ahead of expectations? May not! As far as I am concerned,they just continue to "put runs on the board".

[stoploss]

Yup I noticed that as well.

I'm excited to see PT's new and improved, scaled ;) graphic that incorporates these reductions, and Snoopy's imaginative retort to the whole update.....

I think The Red Baron has seen Snoopy off ..
https://www.youtube.com/watch?v=MSFQzyNJzj0

[noodles]

Well as I have stated, good companies usually surprise on the upside.Today's Heartland announcement confirms that statement;
Non-Core Property assets have reduced by 51% fom $87.1mil to $43mil in the five months ending 31st May 2014."Ahead of expectations."
Reverse Mortgages;"This has produced higher numbers in the sales pipeline than anticipated." "Progressing ahead of expectations."
Fantastic news.Well done Heartland.
Percy,
What do these announcements mean from a financial point of view?

Here is some speculation:
1. Non-core Assets sell down means more cash in the bank = Special dividend or buyback pending?
2. Reverse Mortgages ahead of expectations = FY15 profit upgrade?

noodles

[percy]

Percy,
What do these announcements mean from a financial point of view?

Here is some speculation:
1. Non-core Assets sell down means more cash in the bank = Special dividend or buyback pending?
2. Reverse Mortgages ahead of expectations = FY15 profit upgrade?

noodles
You are onto it quicker than me!!!!!!!!!!!!! [no surprises there.]
1.Don't know!,May be recycled to fund HER growth, for another acquisition,.or otherwise one of your options.
2.FY15 upgrade.? Certainly appears to be on the cards.

[Beagle]

$34mil to $37mil for year ended 30/6/2014 will be just fine for me.
What is SIGNIFICANT is the Reverse Mortgages sales pipeline is AHEAD of expectations.
The sale of Non-Core property is AHEAD of expectations.
Fantastic news.
I am happy to wait until Heartland give their next profit projection.May be ahead of expectations? May not! As far as I am concerned,they just continue to "put runs on the board".

Spot on mate :t_up:
The resident beagle is strangly quiet...maybe hiding in his kennell :)

[kizame]

Nice To see they are having a good go in Aussie too.

[Snoopy]

So nearly finally, for the third and final time:
The $87.1M is the right hand blue column (actually I thought it was grey - must be colour blind)

The bush green + ocean grey/blue row is the $76.6M of '>90 days past due OR impaired OR restructed assets'.

Some of which are from the non core portfolio assets and some of which are from the other loans.


The graphic is 'just perfect'.


Ah, OK got it finally!

I have traced my problem to a defective sub routine which went something like this.

----

PGC => ratbag company
Loan held by PGC => ratbag loan
RECL => subsidiary of PGC
All RECL loans=> ratbag loans
Loans reacquired by Heartland from RECL => ratbag loans

-----

The above subroutine, being identified as faulty, has now been deleted. Apologies for any collateral damage caused, and in that I must include an apology to myself and a thankyou to PT for his patience.

However it seems I was not alone in having the above subroutine embedded. I heard Grant Williamson from Hamilton Hindin Greene on the National radio 5pm business news. He mentioned that Heartland has announced a reduction today in their impaired loan balance. How did he know that all of the former RECL loans that had been redeemed ahead of budget were impaired? What was announced today was a reduction in the outstanding non-core loan balance which is not the same thing.

SNOOPY

[Snoopy]

Heartland must have monitoring Snoopy / Paper Tiger and decided they better come clean and say things are all OK now instead of waiting for a better time to announce such good news

No mention f guidance ....must e disappointing to you guys

So $34-$37m is it for the year then .....and as no mention of guidance when coming out with good news one would think it more likely to be closer to $34m than $37m

There is only a fortnight to go in the financial year Winner. Given they have taken until this time to make an announcement, any financial implication for FY2014 I would guess is negligible. That is why there has been no change to their guidance.

SNOOPY

[Snoopy]

Well as I have stated, good companies usually surprise on the upside.Today's Heartland announcement confirms that statement;
Non-Core Property assets have reduced by 51% fom $87.1mil to $43mil in the five months ending 31st May 2014."Ahead of expectations."


If the non-core property assets have reduced, I would guess that the 'low hanging fruit' have been sold off first. It is good that the non-core property portfolio is down to from $87.1m to $43m, as that will improve the underlying equity to loan ratio of the company. Shortage of underlying equity (IMO) has been my biggest gripe with Heartland.

Of much more interest would be how much the impaired non-core property loans have dropped. If none of the impaired loan have been dealt with (the Heartland announcement today is silent on this), then the company has not really improved their longer term position at all.



Reverse Mortgages;"This has produced higher numbers in the sales pipeline than anticipated." "Progressing ahead of expectations."
Fantastic news.Well done Heartland.


"in the sales pipeline" does not mean sales of reverse mortgages are ahead of budget. Plenty of people look at reverse mortgages and then pull out once they realise the costs. I am more interested in what comes out of the pipeline at the end of the sales process.

Overall this Heartland announcement isn't as definitively positive as it might appear.

SNOOPY

[Snow Leopard]

Ah, OK got it finally!

SNOOPY


http://www.youtube.com/watch?v=IUZEtVbJT5c

Best Wishes
paper Tiger

[Cool Bear]

Of much more interest would be how much the impaired non-core property loans have dropped. If none of the impaired loan have been dealt with (the Heartland announcement today is silent on this), then the company has not really improved their longer term position at all.

SNOOPY

Snoopy, the statement says:

"Heartland retains $9.7m of provisions against these assets and does not


expect earnings to be affected by these assets."

That meant that Heartland had already deducted (or provided) $9.7M from its P&L as bad for these $43M non-core assets. And the second part of the sentence - "does not expect earnings to be affected by these assets" meant that their current assessment of bad loans portion of this $43M remains close to $9.7M. So, nothing more to impact P&L.

[Snoopy]

That meant that Heartland had already deducted (or provided) $9.7M from its P&L as bad for these $43M non-core assets. And the second part of the sentence - "does not expect earnings to be affected by these assets" meant that their current assessment of bad loans portion of this $43M remains close to $9.7M. So, nothing more to impact P&L.


I take your point about no further deterioration in profit and loss, Cool Bear, from more asset writedowns. However, that wasn't the point I was trying to make. A bank has to maintain a certain readily cashable float of assets to support their receivables book. Some of the bank receivables are non-core property. That means that the 'free float capital' required to keep these non core assets in play cannot be used for other more profitable lending, perhaps more reverse mortgages. The non core property portfolio isn't causing any more direct losses, but rather opportunity cost losses.

SNOOPY

[Snoopy]

The non core property portfolio isn't causing any more direct losses, but rather opportunity cost losses.


A bit more on non core property.

In the latest interim report (31 December 2013), the provision for (total) impairment is listed as $34.214m (note 11). This total includes all impairment on the receivables, not just non core property. At that date, non-core property on the books totalled $87.1m (17th June 2014 press release).

As of 31st May 2014, non core property amounted to $43.0m, and impairment on non core property was $9.7m (17th June 2014 Press Statement). That means we can work out the amount of non-core property sold in five months:

$87.1m - $43.0m = $44.1m

What we can't work out is how much the impairment relating to non core property reduced over that same period. Why is this important?

I had it relayed to me this gem from someone in real estate. If you have a relatively liquid market and your property isn't selling the reason is, the price is too high. Now I am not sure how liquid these non core Heartland properties are. But if there is any truth to the Heartland hype, they are planning to sell down the remainder of their non-core property in an orderly way.

The question I pose then is this: If the remainder of the non-core property is saleable, do Heartland expect to get $43.0m for it, or $43.0m - $9.7m = $33.3m for it?

Irrespective of the answer above, does the change in non core property impairment over five months (which we don't know) give an indication as to how close the book price is to the realistic sale price?

SNOOPY

[Snow Leopard]

A bit more on non core property.

In the latest interim report (31 December 2013), the provision for (total) impairment is listed as $34.214m (note 11). This total includes all impairment on the receivables, not just non core property. At that date, non-core property on the books totalled $87.1m (17th June 2014 press release).

As of 31st May 2014, non core property amounted to $43.0m, and impairment on non core property was $9.7m (17th June 2014 Press Statement). That means we can work out the amount of non-core property sold in five months:

$87.1m - $43.0m = $44.1m

What we can't work out is how much the impairment relating to non core property reduced over that same period. Why is this important?

I had it relayed to me this gem from someone in real estate. If you have a relatively liquid market and your property isn't selling the reason is, the price is too high. Now I am not sure how liquid these non core Heartland properties are. But if there is any truth to the Heartland hype, they are planning to sell down the remainder of their non-core property in an orderly way.

The question I pose then is this: If the remainder of the non-core property is saleable, do Heartland expect to get $43.0m for it, or $43.0m - $9.7m = $33.3m for it?

Irrespective of the answer above, does the change in non core property impairment over five months (which we don't know) give an indication as to how close the book price is to the realistic sale price?

SNOOPY

Ok so this is where things can get tricky with regard to the numbers bandied about recently, but I did not want to introduce too many complications at that time, we were having a hard enough time without them.

So knowing this could be a bad move, but see page 6 of the Feb investor presentation (https://nzx.com/files/attachments/189273.pdf)

At 31-Dec-13 the non-core property consisted of:
A total book value (before provision for impairment) of $99.2M and
a provision for impairment of $12.1M giving a net asset value of
$87.1M
[A little aside: the value of non-core property that was >90 days overdue OR impaired OR restructured would have been higher that the $12.1M - but that is for information only and not to be used as a source of confusion]

So we can happily conclude that the $43.0M consists of:
A total book value (before provision for impairment) of $52.7M and
a provision for impairment of $9.7M and that
HNZ expect to realise $43.0M for them should they sell them.

There is still plenty of room for people who want to worry about stuff to worry about stuff but I suggest just chilling out as an alternative investment philosophy until the full year accounts are released and then we can roam widely on the perceived short-comings of the HNZ group financials.

Best Wishes
Paper Tiger

[Cool Bear]

What I'm most interested in is how HNZ will use the "cash" as it won't just be slopping around in a bank account earning 4.3% now will it? ;)
Erm....HNZ is a bank and all cash will be in the pool to be loan out (subject to all the required ratios of course but that is besides the point).

[percy]

What I'm most interested in is how HNZ will use the "cash" as it won't just be slopping around in a bank account earning 4.3% now will it? ;)

Noodles shared his thoughts with us; post 3559 on this thread.

[percy]

Yup ... And what does that do to the bottom line? ;) ... Big question is tho: was this included in the guidance or will the "better progress" be extra?

Well with the share price finishing at 94 cents today,the market certainly thinks it is going to be put to "better progress."

[vorno]

Well with the share price finishing at 94 cents today,the market certainly thinks it is going to be put to "better progress."

It certainly has been a stunning 2-day run!... Of course now everyone will have the feeling of "darn, should've got more"

[percy]

It certainly has been a stunning 2-day run!... Of course now everyone will have the feeling of "darn, should've got more"

But I did,on the 6th of June at 89cents!!!!

[Cool Bear]

But I did,on the 6th of June at 89cents!!!!
me too about the same time.

[vorno]

The $1000 question now is: to sell and rebuy, or to hold?!

[percy]

The $1000 question now is: to sell and rebuy, or to hold?!

You have to decided for yourself.However this is how I see it.
Fundamentals.
1] My valuation is over $1.20.
2] S&P have upgrade HNZ's credit rating.
3]HNZ have made excellent progress on realising the Non-core property book.
4]Sentinel [reverse mortgage] appears to be surprising on the upside.
TA.
1] Share price is above this year's previous high of 92 cents.
2] The share price is ahead of both the 50 day and 200 day moving average.
3]The MACD looks positive.
General.
1] Any major sell down could put Cool Bear's evening of free beer at risk.[SP must reach $1 on or before 8th July].

[vorno]

You have to decided for yourself.However this is how I see it.
Fundamentals.
1] My valuation is over $1.20.
2] S&P have upgrade HNZ's credit rating.
3]HNZ have made excellent progress on realising the Non-core property book.
4]Sentinel [reverse mortgage] appears to be surprising on the upside.
TA.
1] Share price is above this year's previous high of 92 cents.
2] The share price is ahead of both the 50 day and 200 day moving average.
3]The MACD looks positive.
General.
1] Any major sell down could put Cool Bear's evening of free beer at risk.[SP must reach $1 on or before 8th July].

That's what I like about your posts - clear, concise & well-positioned!

[Snoopy]

At 31-Dec-13 the non-core property consisted of:
A total book value (before provision for impairment) of $99.2M and
a provision for impairment of $12.1M giving a net asset value of
$87.1M
[A little aside: the value of non-core property that was >90 days overdue OR impaired OR restructured would have been higher that the $12.1M - but that is for information only and not to be used as a source of confusion]

So we can happily conclude that the $43.0M consists of:
A total book value (before provision for impairment) of $52.7M and
a provision for impairment of $9.7M and that
HNZ expect to realise $43.0M for them should they sell them.


Your withholding of information due to my state of Kerrfusion is forgiven PT.

To rephrase the information you provided on the non-core property



Date
Gross Receivable Value
Impairment
Estimated Recoverable Value


31-12-2013
$99.2m
$12.1m
$87.1m


30-05-2014
$52.7m
$9.7m
$43.0m




That means over five months:
$87.1m - $43.0m = $44.1m of non core property loans have been repaid and
$12.1m - $9.7m = $2.4m of pre-provided for impairment has been written off (as expected).

The impairment to value ratio of loans repaid was $2.4m/ $44.1m = 5.4%

The impairment to value ratio of loans outstanding is $9.7m/ $43.0m = 22.6%

That tells me that:
1/ Although HNZ has done a good job of getting rid of around half their non-core loan book in less than six months,
2/ there is very little chance that they will clear their non-core property completely within another six months. UNLESS
3/ they take further impairment provisions, as they drop the price on what is left.

Does this matter? At some point the non-core property portfolio will be so small it is trivial in the big picture. But while that portfolio remains larger than a full year projected profit, I say it still matters. Especially as the most difficult disposal work is still to do. The fact that the overall loan book is still on a shrinking trajectory is unhelpful in calculating the percentage of non-core to total loans.

SNOOPY

[Snoopy]

4]Sentinel [reverse mortgage] appears to be surprising on the upside.
TA.


What Heartland said about the Sentinal acquisition went like this:

-----

Heartland’s acquisition of the New Zealand and Australian Home Equity Release (“HER”) mortgage businesses of Seniors Money International Limited was completed on 1 April 2014. The loan book, which historically repays at around 10% pa, has been declining since 2012. To date, Heartland has integrated the businesses and is conducting a marketing campaign in New Zealand for the HER product, including TV advertising that started in May 2014. This has produced higher numbers in the sales pipeline than anticipated. The New Zealand book is expected to turn around and grow in July or August 2014, ahead of expectations.

-----

'Surprising on the upside' in this instance was mentioned in accordance with reversing a two year decline in business. As of now the reverse mortgage business remains on a shrinking course that began in 2012. Good on Heartland for seeing 'green shoots'. But this acquisition has not turned the corner yet. The advertising campaign only started in May, so what Heartland are trumpeting is what they are seeinng in a very short business period of less than a month. One month does not a trend make. The reality of Heartland as 'the incredible shrinking bank' remains intact.

SNOOPY

[Longhaul]

Given house price appreciation in Auckland and Christchurch, I'd be surprised if there weren't lots of folk looking at what the house down the road sold for and are feeling fairly wealthy right now. There must be a good number of people wanting to tap that asset before they turn toes up to the daisies right?

(Please note: I am well aware this may not be the case in the rest of the country!)

[percy]

It is not just in Auckland and Christchurch,it is all over New Zealand,Australia,USA and UK.Reverse mortgages are being encourage by Governments in these countries,as it keeps people in their own home.Better for their health, and means less pressure on Government paid health/welfare services.
A very rapidly growing market,that has been under serviced for the last couple of years in NZ . Heartland has the market leading position by ownership of Sentinel.

[Wolf]

Price rise has been supported by some pretty decent volume!

[Beagle]

HUGE volume at close of trade about 6 million, Percy, you doing a little top up to your holding :D

[percy]

HUGE volume at close of trade about 6 million, Percy, you doing a little top up to your holding :D

No not me.
Suspect it is Cool Bear chasing an evening of free beer.!!
Wonder if/when we will see any shareholder notices.

[winner69]

Interest.co.nz had a piece today -

Heartland Bank is sticking to its existing annual profit guidance for both 2014 and 2015 despite indicating it's well on top of its legacy property portfolio.


Like Snoopy says where's the good news in yesterday's announcement if they can't even even suggest they making more money

Disappointing

Even the dog of all dogs PGW came out with some real numbers

But have faith .....alls on track

[percy]

Interest.co.nz had a piece today -

Heartland Bank is sticking to its existing annual profit guidance for both 2014 and 2015 despite indicating it's well on top of its legacy property portfolio.


Like Snoopy says where's the good news in yesterday's announcement if they can't even even suggest they making more money

Disappointing

Even the dog of all dogs PGW came out with some real numbers

But have faith .....alls on track

Sorry you are disappointed.Different people expect different things.I myself am "over the moon" with both the latest announcement; progress with non -core property sales,and sales pipe line of reverse mortgage being ahead of target,and the earlier announcement of the credit rating upgrade.
These are very significant announcements.The market understand this, and have rerated Heartlands share price accordingly.The rerating ,and progress on non core property sales means Heartland management are again achieving what they have stated they will do.
The fact that they announced that sales in pipeline on reverse mortgages is ahead of expectations, confirms the Sentinel acquisition is a cracker.
Summary.The latest announcements confirm the fundamentals of the business have improved "significantly".

[Cool Bear]

No not me.
Suspect it is Cool Bear chasing an evening of free beer.!!
Wonder if/when we will see any shareholder notices.
I wish!
but it does looks like I am well positioned for free beer.:t_up:

[forest]

Interest.co.nz had a piece today -

Heartland Bank is sticking to its existing annual profit guidance for both 2014 and 2015 despite indicating it's well on top of its legacy property portfolio.


Like Snoopy says where's the good news in yesterday's announcement if they can't even even suggest they making more money

Disappointing

Even the dog of all dogs PGW came out with some real numbers

But have faith .....alls on track

The fact that profit guidance stay the same is a positive, one can assume HNZ has acquisition cost with their new purchase which are getting absorbed most likely in 2014 and 2015 without reducing profit guidance. Then we should be in an even better position. :)

[Harvey Specter]

The fact that profit guidance stay the same is a positive, one can assume HNZ has acquisition cost with their new purchase which are getting absorbed most likely in 2014 and 2015 without reducing profit guidance. Then we should be in an even better position. :)Agree - acquisition costs, integration costs, initial marketing costs etc would have been well over $1m

[Beagle]

I'm with Forest, Percy and others with a positive view. Its easy to sit back and speculate what they didn't say and come up with some conspiracy theory but at the end of the day they're doing what they said they'd do and putting runs on the board. Standard and Poors can see that and as mentioned previously have access to a huge amount of information that's not in the public domain. They're still very cautious about handing out credit rating upgrades after the GFC and their own fiasco's with CDO ratings so the fact that this company got one speaks volumes.

[percy]

The fact that profit guidance stay the same is a positive, one can assume HNZ has acquisition cost with their new purchase which are getting absorbed most likely in 2014 and 2015 without reducing profit guidance. Then we should be in an even better position. :)

Right on "the money" Forest.!!!
About my most successful investment has been EBO.Brought in 1991.Famous for not giving profit forecasts.
What is more important is the betterment/improvement of the business.Lay sound foundations and you will grow a great business.
I always look past the figures and judge the strength and health of the business.Their capacity to grow the business.Management achieving what they set out to do.All these line up and you will enjoy both share price growth and increasing dividends.
Heartland are doing these things,well,on time,and with little fuss.My kind of company.!

[Sideshow Bob]

Craigs latest research has Heartland as a hold, with a 12 month price target of $0.93

[percy]

Craigs latest research has Heartland as a hold, with a 12 month price target of $0.93

Well the report was dated 18th June,so their 12 month target price was reached in under 2 days!!!!![or was it a day?]
Just loved the "The key upside risks include a further upgrade to HNZ's credit rating and stronger than expected recovery of core-loan book."
Interesting?! Looks to me as though Craig's have under estimated "the upside risks"!!!!!!!!!!!!!!!!!!!

[Harvey Specter]

$2.1m down the drain to some dodgy clothing company! http://www.nbr.co.nz/article/auckland-womens-fashion-company-embroiled-fraud-allegations-cs-p-158248

Seriously who lends that much to a retail operation?

[nextbigthing]

$2.1m down the drain to some dodgy clothing company! http://www.nbr.co.nz/article/auckland-womens-fashion-company-embroiled-fraud-allegations-cs-p-158248

Seriously who lends that much to a retail operation?

That's also behind the paywall. What's the basic summary? Cheers

[Longhaul]

The SFO is investigating Catherine's Fashionwear, put into liquidation late last year. The company owes Heartland Bank $2.1 million and ANZ Bank $28,966, DC & CC Trustees $400,000, and unsecured creditors $61,000. Receivers BDO note there may not be enough money to pay back preferential and unsecured creditors.

[nextbigthing]

The SFO is investigating Catherine's Fashionwear, put into liquidation late last year. The company owes Heartland Bank $2.1 million and ANZ Bank $28,966, DC & CC Trustees $400,000, and unsecured creditors $61,000. Receivers BDO note there may not be enough money to pay back preferential and unsecured creditors.

Thanks. Bugger.

[Beagle]

I can't help wondering what HNZ are doing lending money to a "fashion" business without adequate security...

[winner69]

No worries - this will be a legacy issue

They run a tighter ship now - Jeff has seen to that

Been broke for a while so no doubt fully provided for anyway. No impact on profits going forward, aleady allowed for forecasts, Phew for that

Was it part of the dodgy loan book that might bring HNZ down?

[percy]

The SFO is investigating Catherine's Fashionwear, put into liquidation late last year. The company owes Heartland Bank $2.1 million and ANZ Bank $28,966, DC & CC Trustees $400,000, and unsecured creditors $61,000. Receivers BDO note there may not be enough money to pay back preferential and unsecured creditors.

As the woman has been broke before I doubt she has left any "assets" for creditors.
I can only hope Heartland had good personnel assets, and guarantees in place..I would have thought Heartland would have required more security than a fashion retailer's business assets.Well,I hope so.! When I had a retail business I had to put my house up for "extra" security.
Part of the business risk of being a finance company/bank.If people don't repay their loans you go broke too.!

[iceman]

I can't help wondering what HNZ are doing lending money to a "fashion" business without adequate security...

Too true Roger. This women's clothing store has been in business since 2000 so I'd be interested to see which entity advanced the loan and when !
Suspect this is something HNZ has adopted rather advanced themselves. Or like w69 puts it,part of the legacy loans "that will sink HNZ" !!!

[percy]

Most probably. ;)

Yeah right,.!!!!!! lol.

[vorno]

Most probably. ;)

Well lets look at the figures.... the 2mill will probably be the equivalent of about 1.7% of Heartlands profit? In other words: "oh damn, I need to take the car into the mechanics".

[percy]

Well lets look at the figures.... the 2mill will probably be the equivalent of about 1.7% of Heartlands profit? In other words: "oh damn, I need to take the car into the mechanics".

Well without knowing what security Heartland hold I can not guess if,or how much they may have to right off!!
Your point is off course correct,"oh damn" !!!

[Snow Leopard]

Well lets look at the figures.... the 2mill will probably be the equivalent of about 1.7% of Heartlands profit? In other words: "oh damn, I need to take the car into the mechanics".

If 2m was 1.7% of HNZ profit then we would be looking at a profit figure of $118M :t_up:

But the guidance is $34M to $37M :t_down:.

Depending when it became clear that this Catherine's Fashionwear was in trouble and how things have progressed will depend on how much impairment they have added to the accounts for it quarter by quarter.

From the Bank disclosure statements we can see these figures for impairment

Quarter Business Total
1 $1M4 $1M7
2 $2M8 $3M3
3 $3M5 $4M8

Best Wishes
Paper Tiger

[Cool Bear]

Hi PT, my guess is that HNZ had already provided for this in their half yearly accounts to Dec 2013. So it will NOT adversely affect the P&L. The receivers were appointed in July 2013 and it seems that HNZ is the one putting them into receivership.
http://www.business.govt.nz/companies/app/ui/pages/companies/1102727/18428290/entityFilingRequirement?backurl=%2Fcompanies%2Fapp %2Fui%2Fpages%2Fcompanies%2F1102727%2Fdocuments%3F start%3D8%26limit%3D1

The insolvencies reports are here too http://www.business.govt.nz/companies/app/ui/pages/companies/1102727/documents?start=0&limit=1.

Percy, still a 50/50 chance for free beer. It should not affect the SP as far as Insto or big investors are concern as there should be no further effect on P&L.

[percy]

Hi PT, my guess is that HNZ had already provided for this in their half yearly accounts to Dec 2013. So it will NOT adversely affect the P&L. The receivers were appointed in July 2013 and it seems that HNZ is the one putting them into receivership.
http://www.business.govt.nz/companies/app/ui/pages/companies/1102727/18428290/entityFilingRequirement?backurl=%2Fcompanies%2Fapp %2Fui%2Fpages%2Fcompanies%2F1102727%2Fdocuments%3F start%3D8%26limit%3D1

The insolvencies reports are here too http://www.business.govt.nz/companies/app/ui/pages/companies/1102727/documents?start=0&limit=1.

Percy, still a 50/50 chance for free beer. It should not affect the SP as far as Insto or big investors are concern as there should be no further effect on P&L.

I do have concerns that you may be a very thirsty Bear by the 9th of July.
Do you "Cool Bears" sort of soak up liquids before you hibernate??

[mouse]

As the woman has been broke before I doubt she has left any "assets" for creditors.
I can only hope Heartland had good personnel assets, and guarantees in place..I would have thought Heartland would have required more security than a fashion retailer's business assets.Well,I hope so.! When I had a retail business I had to put my house up for "extra" security.
Part of the business risk of being a finance company/bank.If people don't repay their loans you go broke too.!

How much of the Heartland Bank $2.1 million is the total amount actually paid out by Heartland, as opposed to cash not paid in to Heartland by Catherine? For example, Heartland, or its previous company, may have loaned $400,000 to Catherine a few years ago. She evidently was a 'slow payer' and penalty interest rates applied. Those would swallow an Iceberg without any problem. It would certainly make a Debt Mountain out of $400,000. My figures are purely theoretical, plucked from the air. As is, I suspect, the $2.1 million owed.

[Xerof]

http://www.insolvencywatch.co.nz/category/receivership-notices/page/15/

Catherine put into Receivership in July last year, so would have been festering for a while before that

if you notice Heartland staff and directors all wearing fishnets, you know they have taken posession of inventory....

[Cool Bear]

I do have concerns that you may be a very thirsty Bear by the 9th of July.
Do you "Cool Bears" sort of soak up liquids before you hibernate??
Haha. If, or rather when, HNZ hits $1, this bear can afford to go somewhere warmer and do not need to hibernate in the cold.

[iceman]

An interesting and informative article for people interested in reverse mortgages. I agree people need to be very careful and the providers should be responsible and explain thoroughly what people are doing.
But I also see this as good way for older people to enjoy the fruits of their life of hard work and savings.

I found this comment interesting :
"SBS Auckland area manager Matthew Isbister said one in 10 of his bank's customers were in the market for a reverse mortgage in Auckland.

"We're seeing a lot more interest in the product than three years ago."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11283811

[percy]

Thanks for posting the link iceman.I thought the article was very fair.Certainly growing demand. The SBS area manager confirms Heartland's comments "This has produced higher numbers in the sales pipeline than anticipated."
From what I am told you can tee up a home loan in a few days while a reverse mortgage takes a good few weeks.

[artemis]

I see from the article that Heartland has 4000 customers, presume that means reverse mortgagors. Agree they are not for everyone, but for folk with no close rellies, better than leaving the house to the cats' home.

[winner69]

Interesting interview with Bruce Mclachlan from Coop Bank
http://www.interest.co.nz/news/70645/co-operative-bank-records-solid-profit-growth-impairments-drop-aims-double-business-5-yea

He was on radio this morning and mentioned Heartland

I get feeling that Bruce and Jeff have a lot of respect for each other and for each others businesses.

Maybe one day a get together

[percy]

Interesting interview with Bruce Mclachlan from Coop Bank
http://www.interest.co.nz/news/70645/co-operative-bank-records-solid-profit-growth-impairments-drop-aims-double-business-5-yea

He was on radio this morning and mentioned Heartland

I get feeling that Bruce and Jeff have a lot of respect for each other and for each others businesses.

Maybe one day a get together

Would make very good sense.

[percy]

I am sorry I do not keep the kind of records to correctly answer your question.I started to buy in reasonable numbers about May 2012.I think the share price was about 52 cents.As the company has progressed I have continued buying.I usually buy in 10,000/20,000 share lots.My last purchase was a few weeks ago at 89 cents.I would guess my average cost would be about 75cents.
Today's share price is 95 cents.At present we know the dividend has been 5 cents per share net or 5,26%,This works out at 7.39% gross.HNZ dividend is fully imputed.
On my 52 cents per share purchase the net yield is 9.61%
On my average of 75 cents per share the net yield is 6.67%
On Forbar's projected dividend year 2014 of 6.5cents my yields are [52cents] 12.5% and average cost [75cents] 8.67%and on todays sp[95cents] 7.8%.
And on Forbar's projected dividend year 2015 of 8 cents my yields are [52cents] 15.38% and av cost [75cents] 10.67% and today's sp [95cents]8.42%.
You have some astute friends belgarion.lol.

[iceman]

Interesting questions and friends you have Belg,

My first purchase, for about 40% of my current holding, was in November 2011 at 49c. I have slowly accumulated on several occasions since then, in 10,000 – 12,000 shares lots. My current average SP is 65.74 c. Last purchase 84c.
With a 5c dividend, the yield on my current HNZ portfolio is 7.60% net.
With the forecast 6c dividend, this will increase to 9.12%.
By utilising the 2.5% DRP, the above yield numbers increase to 7.79% and 9.35% respectively. Another way to look at the DRP is that I will effectively get all my money back, based on a steady 6c fully imputed dividend (?) , in 9.4 years (compounded).
But with forecast increased profits and dividends, I expect this to be 6-7 years in reality

I hope this is of interest to your friend and my fellow members of the Percy fan club !!!

[percy]

Thanks Iceman for yet again reminding me of the significance the compounding discounted dividend reinvestment has.

[vorno]

So, what do you guys make of this: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11285528

[Cool Bear]

Percy, just 3 cents more.
5965

And an advance note of thanks to Percy fan club aka friends of Belgarion.

[Beagle]

^^Love it. One or two shareholders might be having a couple of coldies tonight seeing as we're at 97 already :)

[percy]

Thanks guys. They get it now. My guess is they'll see you on the share register shortly. :)

Glad to be of help.
Must admit your querie got me thinking about what was our actual average cost?Well, I rang my friends at Craigs who informed me my average cost is 73.9 cents per share,while my wife's is 58.8cents per share. So we are doing better than I thought.[I guessed 75cents]So average of both our holdings would work out near 66.35 cents per share.

[percy]

Percy, just 3 cents more.
5965

And an advance note of thanks to Percy fan club aka friends of Belgarion.

Rather confirms my worse fears!!
Going to take a lot of beers to fill a rather large "Cool Bear."
Added to that, I think I still owe KW a couple of "large" red wines for advice given.

[Queenstfarmer]

Anyone out there know what PGW's holding is on this stock?

[Snow Leopard]

Anyone out there know what PGW's holding is on this stock?

Zero, I believe. They sold out last August.

Best Wishes
Paper Tiger

Disc: $0.97 :t_up:

[Toasty]

Zero, I believe. They sold out last August.

Best Wishes
Paper Tiger

Disc: $0.97 :t_up:

Hi PT. Forgive my ignorance but does your disc: mean that you are in now at $0.97?

[nextbigthing]

I can hear the sound of the velcro on Percy's wallet opening...

[Beagle]

Is this a private bet or is good old Uncle Percy shouting the bar for ST shareholders when it hits a buck ?

[percy]

Is this a private bet or is good old Uncle Percy shouting the bar for ST shareholders when it hits a buck ?

Are you mad!!!?????????????????????????????
Sharetraders down here are just as thirsty as you Aucklanders.!!!!!!!!!!!!!!!!!!!!!!!
Very private bet.!! lol.

[percy]

If that were the case I would be booking tickets with AIRNZ immediately (while buying up large into a buck!) :p

Moosie 900.
Should you join us next Wednesday night[7pm 9th July Trevinos,22 Riccarton Road] I will shout your beer,no matter what HNZ shareprice is.!!!
Will need proof of identity!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!

[couta1]

Moosie 900.
Should you join us next Wednesday night[7pm 9th July Trevinos,22 Riccarton Road] I will shout your beer,no matter what HNZ shareprice is.!!!
Will need proof of identity!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!
You'll recognize him as the only moose in the bar with one antler missing(See my last post on Dil thread)

[vorno]

I would like to recommend an android app called JStock - it will let you accurately keep track of your stocks, including averages asked the like. Can also save to cloud. It's fantastic..unlike ASB's useless portfolio system!

Edit: only mentioned because you shouldn't have to call your broker to find out your averages* :)

[Harvey Specter]

I would like to recommend an android app called JStock - it will let you accurately keep track of your stocks, including averages asked the like. Can also save to cloud. It's fantastic..unlike ASB's useless portfolio system!

Edit: only mentioned because you shouldn't have to call your broker to find out your averages* :)Sharesight also does average price - mine is 76.7c.

[Snow Leopard]

Hi PT. Forgive my ignorance but does your disc: mean that you are in now at $0.97?

It means I like that price. I like this mornings price even more [:t_up::t_up: so to speak].

I have bought various parcels over the last 2 years and have an average buy price of $0.655.

Best Wishes
Paper Tiger

[Beagle]

If that were the case I would be booking tickets with AIRNZ immediately (while buying up large into a buck!) :p
Exactly what I was thinking of doing while backing up the truck on AIR as well :)

[Options]

Can anybody give an update on the depth of this stock. Finally the market recognising the value.

[vorno]

Sharesight also does average price - mine is 76.7c.

I'll be sure to check it out, cheers.

[Snoopy]

FY2013 looks to be shaping up quite well for Heartland. Looking further forward than that the new basal 3 Capital Conservation Buffer adding 2.5 percentage points to the amount of capital that must be held, plus another 0-2.5 percent for the countercyclical buffer means very little if any spare capital. So no growth beyond FY2013 if current dividend levels are maintained. A PE of 10 sounds about right in those circumstances.

Round figures I will go for an 11% ROE on shareholders equity of 85c giving earnings of 9.35c. A PE of ten translates that to a share price of 94c. Sounds about right.

However, all that assumes no more bad property debts that would further reduce the equity base. I would discount the share price by 10% to take account of that risk, and that leaves fair value at 85c, exactly where Heartland trades today. Heartland, a good solid company that is fairly and fully priced at 85c.


Heartland has gone through my fair value price of 94c. However, given a dividend is close you might add a couple of cents to that, bringing fair value to 96c. I do know that one major broker has recently changed their attitude to Heartland. It is now seen as an up and coming New Zealand bank, a safe looking yield investment, with little political risk. As a result those rich grannies and grandads with a few bob to invest are now being steered into Heartland. I hope for the sake of those grannies and grandads who lost a shirt or two when the financial sector collapsed following the GFC, that the brokers are right.

Actually not much has changed. No profit upgrade. The worst of the bad debts are still there even if the selldown of the easier stuff has made it appear that Heartland are getting their loan book under control. Even I might invest when the annual report comes out and we can really see what box those bad loans have been put in. And hey, with enough investor enthusiasm Percy may have to pay up on his liquid Heartland hedge.

I heard an item on the news this morning that what was purported to be abominable snowman DNA has been matched to an extinct(?) polar bear. I wonder if that is any relation to the 'Cool Bear' on this thread? I wonder if Percy realises just how much beer a yeti can drink?

SNOOPY

[Harvey Specter]

I do know that one major broker has recently changed their attitude to Heartland. It is now seen as an up and coming New Zealand bank, a safe looking yield investment, with little political risk.

Which one. My dad's broker (ForBar I think) recommended against investing when I told him to get in in the low 80c's

[percy]

And hey, with enough investor enthusiasm Percy may have to pay up on his liquid Heartland hedge.

I heard an item on the news this morning that what was purported to be abominable snowman DNA has been matched to an extinct(?) polar bear. I wonder if that is any relation to the 'Cool Bear' on this thread? I wonder if Percy realises just how much beer a yeti can drink?

SNOOPY

I have grave misgivings about the beer drinking capacity of one rather large "Cool Bear."!!??
In a moment of share madness today I also offered to pay for "Moosie's" beer without any regard to Heartland's share price.
Luckily I am having a day in Auckland on Tuesday, which with a 6.30am flight, should help clear my mind of "silly thoughts."
Should you be passing Trevinos on Wednesday night, please do not "lift a leg" on the poor forlorn old sod , standing outside looking into his empty wallet.!

[Toasty]

A big dollop of shares up for grabs this morning. Almost 700k from one seller. Is this a big transaction for this stock?

[forest]

A big dollop of shares up for grabs this morning. Almost 700k from one seller. Is this a big transaction for this stock?

Average daily volume is about 460k so you could call it big.

[iceman]

A big dollop of shares up for grabs this morning. Almost 700k from one seller. Is this a big transaction for this stock?

I can not see that on the ANZ site !

[Toasty]

I can not see that on the ANZ site !

It disappeared shortly before open. Someone testing the waters?

[iceman]

It disappeared shortly before open. Someone testing the waters?

Maybe Percy offloading a small parcel of his :ohmy:

[Beagle]

Maybe Percy offloading a small parcel of his :ohmy:
Percy's attempt to stop the SP in its tracks and avoid ordering in a tanker load of beer:D

[percy]

Percy's attempt to stop the SP in its tracks and avoid ordering in a tanker load of beer:D

What you may call"caught in the act."!!!!!!!!!!!!!
You can expect the upward trajectory to resume on Thursday .!!!!!!!!!!!!!!!!!!!!!!!

lol.

[Cool Bear]

A big dollop of shares up for grabs this morning. Almost 700k from one seller. Is this a big transaction for this stock?
That 700,000 @98 was offered for sale shortly after 4.30pm on Friday when orders are not done immediately but accummulated until the actual close. He/she could then withdraw it just before 5pm. It cross my mind then that Percy is trying to stop the SP rising before the weekend. A small bit of it was actually sold at the close. This morning the balance of 699+k disappeared just before the opening bell.

Seriously, is it a case of someone getting rid of a big parcel, or someone trying to accumulate at a lower price by frightening those wavering holders into selling?

[Beagle]

Probably just an institution looking to rebalance their portfolio and / or feed the ducks while they're quacking. Lots of orders are fill or kill by end of business day.

[percy]

Golly! HNZ not on the NZX first page anymore. Percy on holiday? ;)

More seriously ... a pullback from 98c to 96c. Volumes at 96c pretty thin. Will 96c become the new 88c? Or are buyers being coy and sellers hiding?

Still picking over a $1.00 in the next month or two. (Yeah, I know that likely to be a safe bet.)

$1.00 in the next month or two!!! Are you after free beer too????
Happy with 94,95 or 96 becoming the new support level. Look forward to the next ceiling.
I brought so many books last Tuesday, at six Auckland publishers, I am running around like a flea in a fit, trying to price them all, and get myself organised for the schools going back next week.