HGH - Heartland Group Holdings

[sb9]

Hope Jeff got some magic up his sleeve and deliver another surprise at ASM this arvo..

[Beagle]

However, despite the lockdowns, we remain on track
to deliver a result within the guidance range of $93 - $96 million

Extract from CEO's speech. All you really need to know so we can all go back to :sleep:

I'll get stuck into the sausage rolls and wine now :D

[winner69]

Extract from CEO's speech. All you really need to know so we can all go back to :sleep:

I'll get stuck into the sausage rolls and wine now :D

Jeff true to form .....Next September he will deliver about $96m

[percy]

• Sir Christopher Mace will continue in the new role of Kaumātua

Reassuring.

[iceman]

All looking good and as Beagle and winner69 have pointed out, we are in for $96m NPAT this year.
Good to see they have not yet touched the $ 9.6m "COVID overlay" and intend to keep it in place. A good decision.
Jeff talked about strong performance in "asset finance" so looking forward to good growth there from infrastructure, transport and agriculture.

Most importantly, the Chairman stated that dividends will continue to grow so all good. The Chairman has been great for HGH and us SH, but maybe time soon to hand over to the next generation !

A happy holder

[Shareguy]

A well run company with the management and board having plenty of skin in the game. A consistent performer.

[winner69]

LOL.. The only thing fintechy about HGH is their shareholding in HMY

Hey rawz … Through this offering, "we are effectively making digital mainstream," he said.

See Heartland is a fintech ….don’t dismiss that thought

[winner69]

Aussie bank reports so far seem to indicate net interest margins are increasing.

Good sign for Heartland this financial year

[winner69]

Global Dairy Prices up again last night

Should see Heartland share price push on to new all time highs …250 plus here we come

[winner69]

RBNZ in its update said The other banks must lift their minimum tier 1 capital to 14%.
…Westpac apparently already over that


How’s Heartland placed

[Beagle]

Not sure mate, time for another one of your fantastic graphs to show how its grown over the last few years ?
From memory they have 7 years (as of about a year ago so something like 6 years now ?) to attain that and with their DRIP program they could get there under their own steam. I've been subscribing to the DRIP for years now.

[dibble]

Aussie bank reports so far seem to indicate net interest margins are increasing.

Good sign for Heartland this financial year


I'm guessing banks like volatility as much as most businesses when it comes to price setting, after several years of consistently low int rates where there isnt really anywhere for margins to go, the recent sudden changes allow some promising obfuscation opportunities. The slightest unnoticed margin increase can result in a decent profit uplift so some positivity for HGH might come out of growing uncertainty.

[Snow Leopard]

RBNZ in its update said The other banks must lift their minimum tier 1 capital to 14%.
…Westpac apparently already over that


How’s Heartland placed

Well the banky bit of Heartland is either just under the 14% or just over if you squint at it sideways, so no worries.

The rest of the group?
Who, apart from Snoppy, cares?

[thegreatestben]

I swear every time someone on here mentions the milk price, HGH starts to nose dive :scared:

[winner69]

Solid results in GDT auction overnight - WMP up 1.9% and continues steady rise

HGH share price a bit flat lately but it’ll follow the dairy prices up any day now.

[winner69]

LEK noted on another thread that GDT prices in NZD highest since 2007

Heartland share price will reach a new all time high in next two weeks ...might even get to $2.50

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/jlvVrxYolplA8923tos2MAhg/KTqfcIikRLYwljsQzccl2g

[Beau]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/jlvVrxYolplA8923tos2MAhg/KTqfcIikRLYwljsQzccl2g

Thanks for sharing Percy great to see things well on track with plenty of uptake and more to come with public getting increasingly aware.

[percy]

Thanks for sharing Percy great to see things well on track with plenty of uptake and more to come with public getting increasingly aware.

Yes certainly a great growth sector which HGH are leaders in.
Interesting the LVR limits increase is the first since 2004.They will have 17 years of data to base their decision on.

[Beagle]

Yes certainly a great growth sector which HGH are leaders in.
Interesting the LVR limits increase is the first since 2004.They will have 17 years of data to base their decision on.

Interesting move and timing. I think the real estate market has a pretty good chance of going backwards a bit over the next couple of years.

[peat]

Interesting move and timing. I think the real estate market has a pretty good chance of going backwards a bit over the next couple of years.

but the LVR rates for RM's are so conservative... heaps of room for that and still no worries.
Not that many people live to 100 even with our advancing care standards.

[percy]

but the LVR rates for RM's are so conservative... heaps of room for that and still no worries.
Not that many people live to 100 even with our advancing care standards.

It is the same as any lender lowering their security,a trade off between extra revenue to extra losses.
HGH having 17 years of data I can not see a big blow out in impairements.

[iceman]

Pretty impressive that there is a 70% increase in the 4 months to 31 Oct compared to pcp :

"At Heartland Bank, the rise has been even more marked.

“In the four months ended October 31, we have had a 70% increase in new business compared with the same time last year,” Ford said.

“So we have seen a big increase in the number of older people wanting to access some equity in their home so they can live a more comfortable retirement.” "

[Beagle]

Yeah I thought that 70% increase was very encouraging.

I agree Percy, they have a track record of being very conservative with lending in this area.
I would think if a super fit 90 year old wanted to borrow 50% on some $15m Herne Bay Mansion they'd probably give them a polite talking too rather than approve the loan. You and I would be lucky to make it to 90 and most certainly won't be borrowing if we do ;)
Have you bought that new car yet ?, you can't take it with you ;)

[percy]

Yeah I thought that 70% increase was very encouraging.

I agree Percy, they have a track record of being very conservative with lending in this area.
I would think if a super fit 90 year old wanted to borrow 50% on some $15m Herne Bay Mansion they'd probably give them a polite talking too rather than approve the loan. You and I would be lucky to make it to 90 and most certainly won't be borrowing if we do ;)
Have you bought that new car yet ?, you can't take it with you ;)

Not not yet...Will wait 26 months until I pass the 75 year old's driving test.
I wonder what HGH's and PAZ's share prices will be then,and if SFF's divie will be enough for a hybrid Suzuki Swift..?
Crikey 4.1 litres per 100 km..Incredible.
A lot to look forward to.

[iceman]

Not not yet...Will wait 26 months until I pass the 75 year old's driving test.
I wonder what HGH's and PAZ's share prices will be then,and if SFF's divie will be enough for a hybrid Suzuki Swift..?
Crikey 4.1 litres per 100 km..Incredible.
A lot to look forward to.

I wouldn’t be surprised your Suzuki enthusiasm may rub off on Beagle. Probably see both of you driving Suzukis at next HGH ASM 😂😂

[SCOTTY]

Not not yet...Will wait 26 months until I pass the 75 year old's driving test.
I wonder what HGH's and PAZ's share prices will be then,and if SFF's divie will be enough for a hybrid Suzuki Swift..?
Crikey 4.1 litres per 100 km..Incredible.
A lot to look forward to.
No worries Percy. Only eye test and medical report for 75 :)

[percy]

I wouldn’t be surprised your Suzuki enthusiasm may rub off on Beagle. Probably see both of you driving Suzukis at next HGH ASM 😂😂

Hollands the Christchurch Suzuki dealership,is only 2.7km from home.4 or 5 minutes away.
5 years "free" motoring,tyres ,servicing etc.
The 2 tone hot rod looks the part....Looks so fast I will most probably get a speeding ticket while parked...lol.

[Beagle]

I wouldn’t be surprised your Suzuki enthusiasm may rub off on Beagle. Probably see both of you driving Suzukis at next HGH ASM ����

I think you know the dog is considering a very different hybrid at the other end of the scale than a Suzuki ;)

I can't see the point of accumulating wealth if you don't enjoy some of it along the way.

Go on Percy, get something decent to drive while you still can https://www.youtube.com/watch?v=Ijt1QUopK5c
Spend some of your millions and stop being a Scrooge :p You do realise you can't take it with you when you go ?
There's an old saying, if you don't travel first class, your kids will ;)

[percy]

I think you know the dog is considering a very different hybrid at the other end of the scale than a Suzuki ;)

I can't see the point of accumulating wealth if you don't enjoy some of it along the way.

Go on Percy, get something decent to drive while you still can https://www.youtube.com/watch?v=Ijt1QUopK5c
Spend some of your millions and stop being a Scrooge :p You do realise you can't take it with you when you go ?
There's an old saying, if you don't travel first class, your kids will ;)

Think the Merc is an ugly looking car.
Not for me...
The way the Nissan is running it will most probably out last me....lol.

[Beagle]

Think the Merc is an ugly looking car.
Not for me...
The way the Nissan is running it will most probably out last me....lol.

LOL - I reckon with the way TRA are going our mate Grant Baker will be pretty keen on one of these https://www.driven.co.nz/news/check-out-the-latest-limited-run-hypercar-from-ferrari/?utm_source=nzh&utm_medium=referral&utm_campaign=topbox

[percy]

LOL - I reckon with the way TRA are going our mate Grant Baker will be pretty keen on one of these https://www.driven.co.nz/news/check-out-the-latest-limited-run-hypercar-from-ferrari/?utm_source=nzh&utm_medium=referral&utm_campaign=topbox


If he misses the next agm you will know he is in Italy collecting it....lol.

[biker]

LOL - I reckon with the way TRA are going our mate Grant Baker will be pretty keen on one of these https://www.driven.co.nz/news/check-out-the-latest-limited-run-hypercar-from-ferrari/?utm_source=nzh&utm_medium=referral&utm_campaign=topbox

Jeez, you can get a Tesla Plaid with much better performance for a fraction of the price

[Beagle]

If he misses the next agm you will know he is in Italy collecting it....lol.

LOL all is forgiven from that non attendance...I've made far too much money out of TRA to hold a grudge lol

[Old mate]

Overnight dairy auction prices the highest in 7 years. What's that mean again winner?:t_up:

[winner69]

Overnight dairy auction prices the highest in 7 years. What's that mean again winner?:t_up:

Means the Heartland share price will push on to new multi year highs as well :t_up:

[Old mate]

Yes sounds good sir! No worries.

[winner69]

Means the Heartland share price will push on to new multi year highs as well :t_up:

Pushing on to new highs ......or has it already made it

But will go even higher ....250 soon

[Beau]

Pushing on to new highs ......or has it already made it

But will go even higher ....250 soon

Why wouldn’t it a company which always does what has set out to do, with increased profits and dividends great management :t_up:

[winner69]

Dairy auction overnight … WMP index down 3.3% ….hmmm

[SCOTTY]

Dairy auction overnight … WMP index down 3.3% ….hmmm

Dow up 547 points :)

[winner69]

Dow up 547 points :)


That’s good .. it might be a good day for Heartland today

[percy]

That’s good .. it might be a good day for Heartland today

Well it certainly been a very successful investment for HGH shareholders.
Share price was $1.66 on 23rd December last year.Currently up 40.96% to today's share price of $2.34.
But wait there's more in the form of two divies..
Certainly beats the Dow Jones 30 which is up 17.46% in the same period.

[Beagle]

I agree 100%. Banks have a very high Covid beta and HGH is on compelling metrics for FY21 and beyond. By the companies own forecast they are on for earning 14.5 cps in FY21 so the forward PE is only 9.3 which is well and truly out of whack with the metrics the Australian banks I follow are now on. I bought more yesterday and have the highest number of shares I have ever held. I feel very well positioned and have high expectations of a strong rerating in 2021 Posted 12/11/2020.

I can't make it any clearer than that. Backed the truck up in early November last year (gave myself what I knew was a good birthday present), in the low $1.30's, up $1.00 since then + 11 cents in dividends. 84% up.

[SCOTTY]

I’m very happy with the parcel bought @ 58c some years ago 😋

[percy]

I’m very happy with the parcel bought @ 58c some years ago 😋

Crikey you would have had more in divies than they cost you.

[dabsman]

And wait till HMY takes off :)

[thegreatestben]

In to these for 1.07 from April last year, only wish I’d bought more!

Have been acquiring HMY lately

[Biscuit]

They sure were a good investment. Looking pretty expensive compared to the big banks these days though.

[SCOTTY]

They sure were a good investment. Looking pretty expensive compared to the big banks these days though.

With a gross dividend yield of 6.585% which includes fully imputed tax credits for nz investors, HGH has the edge on say ANZ 5.726% or Westpac @ 6.144% gross. Imputation credits is the golden goose in my view.

[Beagle]

https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/financials/

Average forecast is 12 cps in dividends next year fully imputed gives 7.2% gross yield rising to 13 cps in FY23 giving 7.8% gross.

About fair value now in my opinion. Holding for yield and dividend growth in the years ahead.

[winner69]

Bugger ….Heartland seems to be the most popular stock in Brokers Tips for 2022 …like Hesrtland the ‘hottest’ of the ‘hot stocks to watch’

Often not a good sign

One thing though it’ll help the shareprice over the next two to three weeks and the mum and dad punters do their annual review and start buying the popular stocks.

https://www.nzherald.co.nz/business/brokers-picks-the-hot-stocks-to-watch-in-2022/CNMTZVBCWYSOF5S2BSK4ZUXZME/

[Shareguy]

This was one of my larger positions back in the day that it was spun out of PGC. I think from memory at $.88. Since then it has increased eps I think every year. Have sold down over the years but still have a good holding. A shame it missed out on UDC but anyway has done well growing the business organically. Still plenty of growth in reverse mortgage side. Also I like the large insider ownership with the CEO and several of the board including Tomlinson having a large stake. For me it’s one of those shares that you put in the bottom draw.

[Beagle]

Bugger ….Heartland seems to be the most popular stock in Brokers Tips for 2022 …like Hesrtland the ‘hottest’ of the ‘hot stocks to watch’

Often not a good sign

One thing though it’ll help the shareprice over the next two to three weeks and the mum and dad punters do their annual review and start buying the popular stocks.

https://www.nzherald.co.nz/business/brokers-picks-the-hot-stocks-to-watch-in-2022/CNMTZVBCWYSOF5S2BSK4ZUXZME/

Bounce to $2.50 in January ?

[winner69]

Bounce to $2.50 in January ?

I’ve noticed over the years that these broker picks (esp the more popular ones) do seem to have a fair bit of buying support over the break ….I’ve assumed mums and dads buying while the big buys are on holiday

So more than $2.50 in a couple weeks quite possible ….no, I mean probably quite high

[Beagle]

What was the old ticker code these traded under mate ?

[winner69]

what was the old ticker code these traded under mate ?

hbl ………….…

[Beagle]

hbl ………….…

Thanks. Doesn't show up in the history on direct broking when you go into one's portfolio and tick all. I'll never know how much I've made out of the group now as I was relying on Direct's digital track record but its fair to say it's a "hearty" amount ;)

I think it will show decent share price gains over the years ahead with fabulous growth in their reverse home equity lending. Gross yields as noted in an earlier recent post are very good so its a good solid hold going forward despite not being especially cheap on a relative basis with its peer group anymore.

[Shareguy]

I used to use findata until that stoped , now use yahoo free watchlist. It’s like most of them though that if there is a name change you have to transfer holding to new ticker code. It did not allow you to track dividends which I’m fine with as I only measure capital changes.

[value_investor]

What's the chances we see a 3 at the front of the price on this?

I'd say pretty high based on their impressive ability to execute. Happy to pick this up at the $1 mark way back during the covid dip.

[Ggcc]

What's the chances we see a 3 at the front of the price on this?

I'd say pretty high based on their impressive ability to execute. Happy to pick this up at the $1 mark way back during the covid dip.

We will see that, but maybe 2023-25 if all goes to plan. If it happens earlier they would be either buying something or takeover

[winner69]

Home equity release market to go crazy ….only way out of financial stress for many ..inevitiable

https://www.stuff.co.nz/business/opinion-analysis/300475226/retirement-finances-the-cold-hard-facts

[Rawz]

Home equity release market to go crazy ….only way out of financial stress for many ..inevitiable

https://www.stuff.co.nz/business/opinion-analysis/300475226/retirement-finances-the-cold-hard-facts

Darn boomers, first they ride the biggest and easiest multi decade property boom and then they go and cut my inheritance lunch by giving it back to the banks :scared:

Govt should increase mandatory kiwisaver contribution rates to 6%. What is Aussie up to? 10%!! Common NZ.
This would go a long way to solving the retirement issues we face as a country. It will also help battle inflation by taking money out of peoples pockets.

Then lift the retirement age to 67 for white collar office or light duty workers and keep it at 65 for blue collar workers. I have a mate that is a bricklayer. His body will be buggered long before my right index finger buggers out from clicking the mouse in my office.

[winner69]

Hey rawz …read this good article …..was written in 2007 and now the world is probably even more slanted to the Jagger Generation.

Don’t forget young man we worked hard to make NZ a great place to live….…rawz, you’ll just have to work harder and your due rewards will come

Whatever, have a happy and prosperous 2022

[Rawz]

Hey rawz …read this good article …..was written in 2007 and now the world is probably even more slanted to the Jagger Generation.

Don’t forget young man we worked hard to make NZ a great place to live….…rawz, you’ll just have to work harder and your due rewards will come

Whatever, have a happy and prosperous 2022

The link to your 2007 article didnt pull through.?

No worries W69. I am only stirring. Sorry, I cant help myself sometimes.
In general each generation leaves the world a better place for the next generation

[iceman]

The link to your 2007 article didnt pull through.?

No worries W69. I am only stirring. Sorry, I cant help myself sometimes.
In general each generation leaves the world a better place for the next generation

I think winner is stirring too. He's very good a subtle stirring :-)

[percy]

Looks as though the brokers' HGH pick is driving demand, as the current share price is $2.42.

[Ohdoyle]

Looks as though the brokers' HGH pick is driving demand, as the current share price is $2.42.


Yeah the buy side shows large numbers of buyers possibly buying smallish parcels. Given the amount of people away at the moment the sell side could dry up quite quickly if this carries on.

I'm thinking $2.42 might be an All Time High? (Just going off the top of my head)

[winner69]

Looks as though the brokers' HGH pick is driving demand, as the current share price is $2.42.

happens most years eh percy …mums and dads ‘fine tuning’ their share portfolios …and they’re often guided by what Broker’s Hot Tips

Will boost HGH shareprice for a week or two …seeing it’s the hottest ofvthe hot tips,

[Balance]

happens most years eh percy …mums and dads ‘fine tuning’ their share portfolios …and they’re often guided by what Broker’s Hot Tips

Will boost HGH shareprice for a week or two …seeing it’s the hottest ofvthe hot tips,

HGH is heading towards $2.75 imo - Jarden & Hobson Wealth have as their top picks which mean that they will be recommending & adding to clients' portfolio in the year ahead. Unlike others (as in MSL & NZSA), they are not allowed to recommend stocks unless they have research or a BUY recommendation.

One of my core holding since I bought the first lot when Georgie Porgie of PGC sold all of his shareholding at 52c back in 2012.

https://www.stuff.co.nz/the-press/business/7315514/PGC-sells-Heartland-shares

Averaged up all the way to 82c and have been happily collecting the dividends and enjoying the sp appreciation at the same time.

[Beagle]

Home equity release market to go crazy ….only way out of financial stress for many ..inevitiable

https://www.stuff.co.nz/business/opinion-analysis/300475226/retirement-finances-the-cold-hard-facts

It surprises me with professional and businessmen my age I know, some of them have been making very good money over the years and yet many have little if anything set aside for retirement despite being on the wrong side of 60. Worse, some of them have received very good advice from me to get on with a retirement savings program but have chosen to "do an ostrich", keep enjoying their comfortable lifestyle and choose to ignore the problem.

As you suggest, they will have no choice but to eat into the value of their homes either through selling and downsizing, perhaps into the regional provinces or a reverse equity mortgage. I think HGH has a bright future ahead.

[winner69]

Got to 250

You have to love those Brokers


Heartland -- the hottest of the Broker's Hot Tips

[Beagle]

Got to 250

You have to love those Brokers


Heartland -- the hottest of the Broker's Hot Tips

You called it back in 2017 as being worth $2.50...you were a bit early ;)...but right nonetheless.

[winner69]

You called it back in 2017 as being worth $2.50...you were a bit early ;)...but right nonetheless.

Time for another call then

Heartland is worth $4.50 :t_up:

[Panda-NZ-]

Its a better choice than AIR for sure. Still the new years rush to go.

Honey, what's this heartland bank that comes recommended by XX. *clicks on site*.

[Rawz]

Also- HGH is so cheap its only $2.50 vs $21 for Westpac and $27 for ANZ.

I have had friends tell me this. Sad!

[Beagle]

Time for another call then

Heartland is worth $4.50 :t_up:

I suspect you're dead right again mate but it might take a "little" while to get there ;)
Got thinking this morning on past successes (as us old dogs tend to do at this time of year) and back in 2017 at $2.14 it was trading on a forward PE of just on 18 but the ten year rate was a lot higher so would need to be on a forward PE of about 20 now to be similarly frothy. Mid point of 2022 forecast is 16 cps but could be 17.5 cps for FY2023 and the market is always a forward looking beast.
I think $3 is not totally out of the question in late 2022 or early 2023 (total shareholder return of 25-30% is possible including dividends) but that's a forward PE of 17 on 17.5 cps for FY23 and is getting right up there in terms of fair value in my opinion.

[Old mate]

Yeah good call winner 2.50 :t_up:. Been saying it for a while

[Panda-NZ-]

Fintechs have a minus PE.

If the market decides that's what it is then we can expect over 5 bucks.

[SCOTTY]

At $2.50 still a healthy gross yield of 6.5% :)

[Beagle]

13 cps forecast dividend for next year (FY23) = 18.05 cps gross / 250 = 7.22% gross prospective yield for next financial year + dividend growth in the years ahead. Stock is in a confirmed long term uptrend. Happy holder.

[Bjauck]

The link to your 2007 article didnt pull through.?

No worries W69. I am only stirring. Sorry, I cant help myself sometimes.
In general each generation leaves the world a better place for the next generation The consumer generation that enjoyed travelling around and around the world and then enjoyed their gas guzzler when they got home, may just leave a slightly diminished inhabitable World for the following generations....

[Bjauck]

HGH is heading towards $2.75 imo - Jarden & Hobson Wealth have as their top picks which mean that they will be recommending & adding to clients' portfolio in the year ahead. Unlike others (as in MSL & NZSA), they are not allowed to recommend stocks unless they have research or a BUY recommendation.

One of my core holding since I bought the first lot when Georgie Porgie of PGC sold all of his shareholding at 52c back in 2012.

https://www.stuff.co.nz/the-press/business/7315514/PGC-sells-Heartland-shares

Averaged up all the way to 82c and have been happily collecting the dividends and enjoying the sp appreciation at the same time. One of my core holdings now too. I bought a small holding back in 2012, and steadily added until end of 2020. It has had its ups and downs as it fell in & out of favour with the market. Perhaps being a small financial/bank stock (a rare entity on the NZX) it is more prone to sentiment? However for a long term investor, the downs became opportunities to add.

[winner69]

Digital mortgage battle to erupt as fintechs eye home loans

https://www.smh.com.au/business/banking-and-finance/digital-mortgage-battle-to-erupt-as-fintechs-eye-home-loans-20211213-p59h7l.html

[Bjauck]

It surprises me with professional and businessmen my age I know, some of them have been making very good money over the years and yet many have little if anything set aside for retirement despite being on the wrong side of 60. Worse, some of them have received very good advice from me to get on with a retirement savings program but have chosen to "do an ostrich", keep enjoying their comfortable lifestyle and choose to ignore the problem.

As you suggest, they will have no choice but to eat into the value of their homes either through selling and downsizing, perhaps into the regional provinces or a reverse equity mortgage. I think HGH has a bright future ahead. For NZers of that age group, they were behaving rationally. There was no KiwiSaver (although its incentives are weak too) for much of their working life, no tax incentive to join private superannuation schemes. Investments, bought out of taxed income, that produced income were again taxed - and at one stage had extra tax imposed, if you had income over a certain level when you reached government pension age. in inflationary times you're taxed in effect just on the inflationary component of the yield on many investments. So perhaps there was comparatively little systemic incentive to build up a portfolio of income producing assets.

The biggest tax incentive was to pour as much equity as possible into leveraged real estate ownership to get untaxed capital gains. And the NZ governments, both Nat and Lab over the years have indeed delivered them healthy capital gains. It has been the best tax incentivised pension plan. So HGH, along with the retirement villages offering ORAs, have a big potential market in NZ.

[davflaws]

For NZers of that age group, they were behaving rationally. There was no KiwiSaver (although its incentives are weak too) for much of their working life, no tax incentive to join private superannuation schemes. Investments, bought out of taxed income, that produced income were again taxed - and at one stage had extra tax imposed, if you had income over a certain level when you reached government pension age. in inflationary times you're taxed in effect just on the inflationary component of the yield on many investments. So perhaps there was comparatively little systemic incentive to build up a portfolio of income producing assets.

The biggest tax incentive was to pour as much equity as possible into leveraged real estate ownership to get untaxed capital gains. And the NZ governments, both Nat and Lab over the years have indeed delivered them healthy capital gains. It has been the best tax incentivised pension plan. So HGH, along with the retirement villages offering ORAs, have a big potential market in NZ.

I have been a landlord and hated it, so have chosen equities as a form of savings - for the (potential) dividends of course rather than with any intention to avoid tax on capital gains!

But I think it is a perfectly rational strategy to live at a level you are comfortable with during your working life and then draw down your capital in your declining years. We have been on the cusp of that situation for the last few years with me almost completely retired, and my wife easing back. The fact that Covid has prevented our usual expenditure on travel (diving, walking, local culture etc) is all that has stood between us and progressive selldowns. If it wasn't for our equities we would certainly be reverse mortgaging.

Our deal with our accountant is that he is free to do his job by giving us wise and prudent financial advice - and we are free to ignore it! Im sure he does not approve of our portfolio choices and weightings!

We are happy holders.

[Bjauck]

I have been a landlord and hated it, so have chosen equities as a form of savings - for the (potential) dividends of course rather than with any intention to avoid tax on capital gains!

But I think it is a perfectly rational strategy to live at a level you are comfortable with during your working life and then draw down your capital in your declining years. We have been on the cusp of that situation for the last few years with me almost completely retired, and my wife easing back. The fact that Covid has prevented our usual expenditure on travel (diving, walking, local culture etc) is all that has stood between us and progressive selldowns. If it wasn't for our equities we would certainly be reverse mortgaging.

Our deal with our accountant is that he is free to do his job by giving us wise and prudent financial advice - and we are free to ignore it! Im sure he does not approve of our portfolio choices and weightings!

We are happy holders. In some countries, the object of pension policies and private contributory pension schemes is to provide an level of income in retirement that would mean that income-producing assets and the family home especially would not need to be disposed of in retirement.

Happy holder too. I use the Smartshares NZ top 50 ETF as a benchmark. Over the years so far my investment in HBL/HGH has exceeded that by a considerable margin.

[Beagle]

...The biggest tax incentive was to pour as much equity as possible into leveraged real estate ownership to get untaxed capital gains. And the NZ governments, both Nat and Lab over the years have indeed delivered them healthy capital gains. It has been the best tax incentivised pension plan. So HGH, along with the retirement villages offering ORAs, have a big potential market in NZ.

Definitely agree with that. With houses in many regions now over $1m moving out of big cities into regional N.Z. is not going to free up as much capital as it might have a few years ago so reverse equity loans are going to be a MASSIVE growth area for Heartland going forward and many will trade down into a smaller comfortable apartment and free up worthwhile capital that way so the retirement sector also stands to reap the rewards.

[Beagle]

Fresh all time high. Probably the first of long series of new all time high's this year in my opinion.

[Muse]

These new lending rules (the credit contracts & consumer finance act - 'CCCFA') that came into effect 1 december certainly have caused a stir

Rawz whats your take on how this could impact our favourite clutch of NZX lending orientated firms - HGH, TRA, HMY?

[Beagle]

Todd Hunter commented on this in the TRA thread recently. No worries for HGH either as I think most old folks looking for a reverse equity mortgage make their own avocado's on toast ;)

[winner69]

Global Dairy Trade last night prices up 4.6%

Prices been strong inbreçent months …as has HGH share price

Bodes well for more all time highs in lead up to heartlands half year announcement

[Waltzing]

Who would have though PGC would be where it is today.

US banks a bit trashed lately but US oil is now months into a surge upward.

[Balance]

Who would have though PGC would be where it is today.

US banks a bit trashed lately but US oil is now months into a surge upward.

You mean PGC, the basket case controlled by Georgie Porgie Kerr?

[Waltzing]

yep, we held it.. only sold HGH recently. Did not fit the profiles but has done better that the international pros..

what a shocker it was. Everytime walk past the HGH shops they are like empty little show fronts.

Be interesting to see how they handle technology going forward from here.

[percy]

yep, we held it.. only sold HGH recently. Did not fit the profiles but has done better that the international pros..

what a shocker it was. Everytime walk past the HGH shops they are like empty little show fronts.

Be interesting to see how they handle technology going forward from here.

Drivel....................

[Balance]

Drivel....................

You are being kind ….

[SCOTTY]

yep, we held it.. only sold HGH recently. Did not fit the profiles but has done better that the international pros..

what a shocker it was. Everytime walk past the HGH shops they are like empty little show fronts.

Be interesting to see how they handle technology going forward from here.

What exactly is your problem with the HGH profile or performance Waltzing? Or is it something you’re smoking?

[mike2020]

Inclined to agree. Its been a stellar performer over the last 12 months in what I consider my nzx blue chips.It's a long term hold for me. Growth plus respectable dividends. I'd buy more at todays prices and I expect soon will. Simple math.

[Beau]

yep, we held it.. only sold HGH recently. Did not fit the profiles but has done better that the international pros..

what a shocker it was. Everytime walk past the HGH shops they are like empty little show fronts.

Be interesting to see how they handle technology going forward from here.

I for one don’t understand where you are coming from here please explain like a lot of your post they don’t seem to add up at times you only need to look at posts on Oceania thread.

[Old mate]

He drinks heavily. Don't worry:t_up:

[iceman]

I for won don’t understand where you are coming from here please explain like a lot of your post they don’t seem to add up at times you only need to look at posts on Oceania thread.

I suspect he thought he was posting on the HLG thread. Mind you that’s just a guess. I seldom understand his posts

[Panda-NZ-]

Heartland reverse mortgage to dump into stocks?

[winner69]

ASB Bank lifted first-half net profit 23% with home lending up 8% and business lending up 10%, with its margins improving from the previous first half.

Hope Heartland beats that

[Beagle]

I made a modest addition to my stake yesterday. Agreed Winner, here's hoping the ASB result is a potender of good things to come for HGH....one of only a small handful of stocks on the NZX that are still in an unbroken ongoing uptrend over the last 18 months or so.

[newbieinvestor]

ASB Bank lifted first-half net profit 23% with home lending up 8% and business lending up 10%, with its margins improving from the previous first half.

Hope Heartland beats that


when is the HGH result Winner69?

[newbieinvestor]

when is the HGH result Winner69?

Heartland Group Holdings Limited will announce its financial results for the 6 months ended 31 December 2021 on Tuesday 22 February 2022.

Ah ok ... so there is 7 trading days to go...

[percy]

If this article is correct HGH are "well positioned" with their RELs.

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/n9s7l1tDD763MESyM8xudcKg/eM223njGUN76i7TKRLyf892g

[RTM]

If this article is correct HGH are "well positioned" with their RELs.

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/n9s7l1tDD763MESyM8xudcKg/eM223njGUN76i7TKRLyf892g

" It was done by Heartland Bank, which is a major provider of reverse mortgages."

Hmmmm...well...I do hope they are right. My Mum was certainly pretty determined to stay in her house as long as possible. But I wonder if this is like a political party polling their mailing list !

[777]

when is the HGH result Winner69?

A handy URL for you.

https://www.nzx.com/markets/NZSX/upcoming_results

[percy]

" It was done by Heartland Bank, which is a major provider of reverse mortgages."

Hmmmm...well...I do hope they are right. My Mum was certainly pretty determined to stay in her house as long as possible. But I wonder if this is like a political party polling their mailing list !

I noted they asked people aged over 50.
I would think it would be more relevant if they asked people aged over 70.?

[Bjauck]

I noted they asked people aged over 50.
I would think it would be more relevant if they asked people aged over 70.?The age at which people retire in NZ is comparatively high in NZ at about 68, compared to 65 in Australia and 64 in the UK. That is probably in part owing to NZ's small private superannuation sector. Yet NZ has a lot of wealth wrapped up in residential housing.

I think there are plenty of people aged 50-70, or maybe 55-70's, who want or would like to retire early. Rates of burn-out, illness and disability increases during middle age. Kiwis, including in the Boomer and X gens, tended to invest heavily in their homes. So 50-70's have scope to downsize and retire or semi-retire and live off their released capital sum, which given NZ house prices may be a tidy amount for many. Also that age group may wish to help their children purchase a house. I imagine there is plenty of scope in that target sub-market for HGH equity release.

https://www.lovemoney.com/gallerylist/75682/real-retirement-ages-around-the-world-revealed

Disc: HGH is one of my larger holdings.

[Beagle]

I noted they asked people aged over 50.
I would think it would be more relevant if they asked people aged over 70.?

Exactly. It should be noted that the average age of an incoming resident into a retirement unit is just on 80 years old and this is true right across the sector. I would think nearly all respondents in their 50's, especially low 50's would give the same answer.

Once you get over about 70 I'd imagine many would have a much better handle on the realities of age related issues and the advantages a retirement home confers.

That said I do think HGH has a HUGE total addressable market with its reverse equity loans.

[Waltzing]

removed wrong thread.

[percy]

Exactly. It should be noted that the average age of an incoming resident into a retirement unit is just on 80 years old and this is true right across the sector. I would think nearly all respondents in their 50's, especially low 50's would give the same answer.

Once you get over about 70 I'd imagine many would have a much better handle on the realities of age related issues and the advantages a retirement home confers.

That said I do think HGH has a HUGE total addressable market with its reverse equity loans.

Agree.
Agree.
Agree.

[Beagle]

Agree.
Agree.
Agree.

Mrs B swears she'll never move into a retirement village...but she's not even 60 yet. I just have a chuckle to myself and say, we'll see ;)

[arekaywhy]

just on that, given the way we have seen folks in retirement villages get treated when everyone panicked about a flu, folks in my generation seem to agree with the sentiment that fcuk all the way off if you think I'm going anywhere near one of those places. Can you imagine being in a prison? It wouldn't matter how "luxurious" it was.

If that is what people are waking up to, then I'm not so sure there is such a tail wind for this industry. I'm putting my money elsewhere.

[percy]

Mrs B swears she'll never move into a retirement village...but she's not even 60 yet. I just have a chuckle to myself and say, we'll see ;)

I am 73,wife 72, and really have no idea whether we will move into a retirement village.
I lot of friends have died,and circumstances can change so quickly.
One of us could die,have a stroke,or get dementia,which would mean the safety/care of a retirement village would be an attractive option.
There is a large number of social services available for people who decide to stay in their own home.
We live in a 3 year old over 60s unit,so maintenance is not an issue.
We did look at retirement villages before we bought our unit,and decided lack of privacy was an issue for us,which put us off retirement villages.
Did not want to see the neighbour enjoying bacon and eggs, while I was just having a kiwi fruit and toast for breakfast..lol

[Biscuit]

just on that, given the way we have seen folks in retirement villages get treated when everyone panicked about a flu, folks in my generation seem to agree with the sentiment that fcuk all the way off if you think I'm going anywhere near one of those places. Can you imagine being in a prison? It wouldn't matter how "luxurious" it was.

If that is what people are waking up to, then I'm not so sure there is such a tail wind for this industry. I'm putting my money elsewhere.

Wait until you are a bit older and are confused how to use a toaster.

[amalgam]

I am 73,wife 72, and really have no idea whether we will move into a retirement village.
I lot of friends have died,and circumstances can change so quickly.
One of us could die,have a stroke,or get dementia,which would mean the safety/care of a retirement village would be an attractive option.
There is a large number of social services available for people who decide to stay in their own home.
We live in a 3 year old over 60s unit,so maintenance is not an issue.
We did look at retirement villages before we bought our unit,and decided lack of privacy was an issue for us,which put us off retirement villages.
Did not want to see the neighbour enjoying bacon and eggs, while I was just having a kiwi fruit and toast for breakfast..lol

I am 80 & my wife is 75…we have just sold our house & are about to move into a retirement village. We thought like you Percy…lack of privacy etc…..but in the last year things have changed medically & we have decided to seek security with people our own age. Our children wont need to worry about us as much in the future as we have continuing care in the village.
Its a different period in our lives, as no longer are we striving to make or save money. In fact the we accept the fact that our villa will not appreciate in value.
The family wont get as much from our estate when we die…we are going to gift a substantial amount now.

[Beagle]

I am 73,wife 72, and really have no idea whether we will move into a retirement village.
I lot of friends have died,and circumstances can change so quickly.
One of us could die,have a stroke,or get dementia,which would mean the safety/care of a retirement village would be an attractive option.
There is a large number of social services available for people who decide to stay in their own home.
We live in a 3 year old over 60s unit,so maintenance is not an issue.
We did look at retirement villages before we bought our unit,and decided lack of privacy was an issue for us,which put us off retirement villages.
Did not want to see the neighbour enjoying bacon and eggs, while I was just having a kiwi fruit and toast for breakfast..lol

I suspect when you and your wife are about 80, health concerns will see you make a pragmatic decision many others have taken. You'll be too old by then to worry about what the neighbor's think lol

[thegreatestben]

I am 80 & my wife is 75…we have just sold our house & are about to move into a retirement village. We thought like you Percy…lack of privacy etc…..but in the last year things have changed medically & we have decided to seek security with people our own age. Our children wont need to worry about us as much in the future as we have continuing care in the village.
Its a different period in our lives, as no longer are we striving to make or save money. In fact the we accept the fact that our villa will not appreciate in value.
The family wont get as much from our estate when we die…we are going to gift a substantial amount now.

Hi Amalgam, thanks for sharing this view.
I hope that the decision works out well for you both and that you will be able to enjoy seeing the benefits gained by gifting to your family.

I was given approximately half the value of my mortgage by a family member on their passing, actually a year after because of probate. It has really had a massive impact on my life and I am hugely grateful for it. I often think how much better it would have been to be able to show my thanks somehow while they were still with us. It seems to strange for it all to be a big secret and a huge surprise after they are gone.

I'm sure that will be a source of joy for you and your wife!

[RTM]

Exactly. It should be noted that the average age of an incoming resident into a retirement unit is just on 80 years old and this is true right across the sector. I would think nearly all respondents in their 50's, especially low 50's would give the same answer.

Once you get over about 70 I'd imagine many would have a much better handle on the realities of age related issues and the advantages and disadvantages a retirement home confers.

That said I do think HGH has a HUGE total addressable market with its reverse equity loans.

I've fixed that for you Beagle...

[percy]

I am 80 & my wife is 75…we have just sold our house & are about to move into a retirement village. We thought like you Percy…lack of privacy etc…..but in the last year things have changed medically & we have decided to seek security with people our own age. Our children wont need to worry about us as much in the future as we have continuing care in the village.
Its a different period in our lives, as no longer are we striving to make or save money. In fact the we accept the fact that our villa will not appreciate in value.
The family wont get as much from our estate when we die…we are going to gift a substantial amount now.

I think you have made a sound decision to move into a retirement village.Compelling reasons.
Interesting noting you are gifting a substantial amount now to your family.
Going on from your post and thegreatestben's post I think it makes a huge difference to family's receiving money early.
We have helped the two daughters.Both now live without mortgages.Granddaughter will finish university without a student loan.
My late friend's trust I am a trustee of, has recently made substantial capital payments to the beneficiaries,so as it will start to impact their lives now rather than later.

[newbieinvestor]

I made a modest addition to my stake yesterday. Agreed Winner, here's hoping the ASB result is a potender of good things to come for HGH....one of only a small handful of stocks on the NZX that are still in an unbroken ongoing uptrend over the last 18 months or so.

Picked up a small parcel at 2.35 of my only HGH stake at the end of the day .. lets see if market sentiment eclipses the results....... Perhaps I should have waited a bit more ....hmmmmmmm..

[newbieinvestor]

A handy URL for you.

https://www.nzx.com/markets/NZSX/upcoming_results

Thanks 777! :t_up:

[nztx]

Picked up a small parcel at 2.35 of my only HGH stake at the end of the day .. lets see if market sentiment eclipses the results....... Perhaps I should have waited a bit more ....hmmmmmmm..


Me too, turned my back & looked later to see some kind souls had crashed the SP just after I was done :)

[Old mate]

Gobal diary prices up 4.2% overnight. Highest level in eight years. What's that mean again winner:t_up:

[winner69]

Gobal diary prices up 4.2% overnight. Highest level in eight years. What's that mean again winner:t_up:

Means n next week or two Heartland share price will be higher .... and with the half year announcement probably over 3 bucks

No worries

[dabsman]

It can keep lower till DRP priced is determined thanks!

[Muse]

Means n next week or two Heartland share price will be higher .... and with the half year announcement probably over 3 bucks

No worries

aye nice tailwind
I wouldn't be surprised though to see some language bashing the changes to the CCCFA and some guarded guidance released in respect of it. HGH still got that covid provision?

[thegreatestben]

HGH still got that covid provision?

Surely, still too many unknowns.

Can't help but feel like it'll be good news and little reaction to the SP next week. I think I'm an HGH lifer though so plenty of time for gains.

[Muse]

I think I'm an HGH lifer though so plenty of time for gains.

..... ditto......

[winner69]

aye nice tailwind
I wouldn't be surprised though to see some language bashing the changes to the CCCFA and some guarded guidance released in respect of it. HGH still got that covid provision?

Still had that covid provision as at June 2021

No doubt a few other things in Jeff's bottom drawer - Jeff the master of smoothing profits

Don't want big jumps in profitability ... and no reporting surprises ... even though he indulges a few times and profit is slightly more than guidance

[percy]

Still had that covid provision as at June 2021

No doubt a few other things in Jeff's bottom drawer - Jeff the master of smoothing profits

Don't want big jumps in profitability ... and no reporting surprises ... even though he indulges a few times and profit is slightly more than guidance

Jeff is what is referred to "as a safe pair of hands."

[Beagle]

Last year they announced an interim dividend of 4.0 cps down half a cent on the year before due to the RBNZ restrictions on payout's.
See here https://announcements.nzx.com/detail/367925
Have those restrictions now been lifted ? I have it in the back of my mind they're still in force until 30 June 2022 ?
What anyone's guess on the interim dividend ?

[Greekwatchdog]

Last year they announced an interim dividend of 4.0 cps down half a cent on the year before due to the RBNZ restrictions on payout's.
See here https://announcements.nzx.com/detail/367925
Have those restrictions now been lifted ? I have it in the back of my mind they're still in force until 30 June 2022 ?
What anyone's guess on the interim dividend ?

My guess is around $0.05.

[pierre]

Last year they announced an interim dividend of 4.0 cps down half a cent on the year before due to the RBNZ restrictions on payout's.
See here https://announcements.nzx.com/detail/367925
Have those restrictions now been lifted ? I have it in the back of my mind they're still in force until 30 June 2022 ?
What anyone's guess on the interim dividend ?

"The Reserve Bank (RBNZ) is easing the dividend restrictions placed on retail banks at the height of COVID-19.
Banks can now pay up to 50% of their earnings as dividends to their shareholders.
In other words, dividends can't exceed 50% of net profit after tax reported in the bank’s most recently completed financial year.
The restrictions do not prevent a bank from paying an interim dividend (for example, at the half year). In such cases it is the total dividend paid in the year that is limited by the restriction.
The 50% dividend restriction will remain in place until July 1, 2022, when the RBNZ plans to remove limits entirely - "subject to no significant worsening in economic conditions".

In HGH's case the restriction applies to 50% of earnings from their NZ banking operations only. My guess is 5c for the half year - then if all is going well, a final of 7c making 12c for the year.

[percy]

"The Reserve Bank (RBNZ) is easing the dividend restrictions placed on retail banks at the height of COVID-19.
Banks can now pay up to 50% of their earnings as dividends to their shareholders.
In other words, dividends can't exceed 50% of net profit after tax reported in the bank’s most recently completed financial year.
The restrictions do not prevent a bank from paying an interim dividend (for example, at the half year). In such cases it is the total dividend paid in the year that is limited by the restriction.
The 50% dividend restriction will remain in place until July 1, 2022, when the RBNZ plans to remove limits entirely - "subject to no significant worsening in economic conditions".

In HGH's case the restriction applies to 50% of earnings from their NZ banking operations only. My guess is 5c for the half year - then if all is going well, a final of 7c making 12c for the year.

I think you are right.
Thanks for your post.

[Beagle]

Thanks pierre. Your annual expectation of 12 cps lines up with average analyst expectations and from a commercial perspective with risks apparent the interim and final split looks logical to me https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/financials/
12 cps grossed up for imputation credits is 12 / 0.72 = 16.67 cps and on a $2.36 share price that's 7.06% gross yield, growing in the years to come.

Lets get a bit creative here and look at the forward yield investment case for next financial year.

First lets establish the base case. The current SP is $2.36 but if we assume you get 5 cents back in a few weeks there's a good argument for saying the net price looking at this from a FY23 income perspective is this is a net $2.31 investment.

Average analyst forecast for FY23 is 13 cps which grossed up for imputation credits is 13 / 0.72 = 18.06 cps which on a $2.31 net investment per share shows a 7.82 % gross yield + growth in future years. Hmmm

Risks apparent appear to revolve around Covid and its effect on the economy. HGH lend to lots of small business's and I am seeing some of them in deep stress so I would expect their Covid provisioning will be needed in the second half of FY22.

[iceman]

Thanks pierre. Your annual expectation of 12 cps lines up with average analyst expectations and from a commercial perspective with risks apparent the interim and final split looks logical to me https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/financials/
12 cps grossed up for imputation credits is 12 / 0.72 = 16.67 cps and on a $2.36 share price that's 7.06% gross yield, growing in the years to come.

Lets get a bit creative here and look at the forward yield investment case for next financial year.

First lets establish the base case. The current SP is $2.36 but if we assume you get 5 cents back in a few weeks there's a good argument for saying the net price looking at this from a FY23 income perspective is this is a net $2.31 investment.

Average analyst forecast for FY23 is 13 cps which grossed up for imputation credits is 13 / 0.72 = 18.06 cps which on a $2.31 net investment per share shows a 7.82 % gross yield + growth in future years. Hmmm

Risks apparent appear to revolve around Covid and its effect on the economy. HGH lend to lots of small business's and I am seeing some of them in deep stress so I would expect their Covid provisioning will be needed in the second half of FY22.

Good post Beagle and I agree. I think there is no less risk to HGH's business now than in 2021 as I think NZ is yet to take the economic hit that COVID will no doubt deliver. But Heartland has been good at managing their loan risks so we will be fine, but I'm sure they will keep the the COVID provisioning for at least another 12 months. I think that would be the prudent thing to do.

Discl: HGH remains one of my biggest holdings as it has for many years and I'm very happy with that. Added a few yesterday.

[Cyclical]

Risks apparent appear to revolve around Covid and its effect on the economy. HGH lend to lots of small business's and I am seeing some of them in deep stress so I would expect their Covid provisioning will be needed in the second half of FY22.


Good post Beagle and I agree. I think there is no less risk to HGH's business now than in 2021 as I think NZ is yet to take the economic hit that COVID will no doubt deliver. But Heartland has been good at managing their loan risks so we will be fine, but I'm sure they will keep the the COVID provisioning for at least another 12 months. I think that would be the prudent thing to do.

Isn't it unfortunate, from an economy point of view anyway, that we had this massive fiscal sugar rush a little under 2 years ago, which in hindsight wasn't really necessary (to that extent at least), but resulted in the usually steady as she goes supply and demand scale to get way out of kilter. Now the chickens are coming home to roost and the brakes are coming on in a big way, just when businesses and households are actually needing a bit of help. The pain is going to be felt for quite some time me thinks, and all mainly due to some over exuberance (and dare I say it, inexperience) at the money printer.

[BlackPeter]

Isn't it unfortunate, from an economy point of view anyway, that we had this massive fiscal sugar rush a little under 2 years ago, which in hindsight wasn't really necessary (to that extent at least), but resulted in the usually steady as she goes supply and demand scale to get way out of kilter. Now the chickens are coming home to roost and the brakes are coming on in a big way, just when businesses and households are actually needing a bit of help. The pain is going to be felt for quite some time me thinks, and all mainly due to some over exuberance (and dare I say it, inexperience) at the money printer.

Well yes, but then there is a lot to say about the benefits of hindsight ... and more so about the merit of pretending to have had a better solution without the need or ability to prove it.

If we compare the current phase with the the end of WW I and the 1918 Spanish flu pandemic followed by ongoing economic problems leading into the great depression, then I think the politicians and economists of the world (nothing little NZ could have changed in a meaningful way) did so far quite well. Admittedly - still early days - there will be no doubt plenty more opportunity for hindsight :) ;

[alokdhir]

What r the expectations from results tomorrow ? What is normal and whats better then normal growth ? Thoughts please

[BlackPeter]

What r the expectations from results tomorrow ? What is normal and whats better then normal growth ? Thoughts please

They provided a revenue forecast, didn't they ? I somewhere noted FY NPAT expected between 93m and 96m;

If the HY is supporting this window, that's good ... and if they are close to the top this is as expected.

If the NPAT is however ways above the forecast, than they lost their capabilities of creative accounting, which would be a disappointment unless they have a really good apology :p ;

[alokdhir]

They provided a revenue forecast, didn't they ? I somewhere noted FY NPAT expected between 93m and 96m;

If the HY is supporting this window, that's good ... and if they are close to the top this is as expected.

If the NPAT is however ways above the forecast, than they lost their capabilities of creative accounting, which would be a disappointment unless they have a really good apology :p ;

In nutshell ...nothing SP moving news possible ...just a dividend play and steady as CEN ...rest all is already priced in !!!

[winner69]

Investors are betting banks will be among the big sharemarket winners from rising inflation, amid estimates Australian lenders stand to make almost $900 million more a year in profit from just one hike in official interest rates.

https://www.smh.com.au/business/banking-and-finance/900m-bonus-investors-bet-on-bank-profits-rising-from-rate-hikes-20220216-p59x58.html

Where aussie bank share prices go Heartland follows

[alokdhir]

Investors are betting banks will be among the big sharemarket winners from rising inflation, amid estimates Australian lenders stand to make almost $900 million more a year in profit from just one hike in official interest rates.

https://www.smh.com.au/business/banking-and-finance/900m-bonus-investors-bet-on-bank-profits-rising-from-rate-hikes-20220216-p59x58.html

Where aussie bank share prices go Heartland follows

ATM the Aussies banks are doing better then our little HGH ...maybe as they are on radars of many more investors then HGH ...HGH has some catching up to do ...maybe after results its back in business to 2.60 +. ...

[winner69]

ATM the Aussies banks are doing better then our little HGH ...maybe as they are on radars of many more investors then HGH ...HGH has some catching up to do ...maybe after results its back in business to 2.60 +. ...

Hgh seems to be doing OK v aussie banks over the last few months ….on the compare charts I looked at

[alokdhir]

Hgh seems to be doing OK v aussie banks over the last few months ….on the compare charts I looked at

So u dont think tomorrow run to $ 2.60 possible ...will stay in this range only ?

Will find out soon ...just 12 hrs plus ;)

[Rawz]

HGH is going to report very strong earnings tomorrow

Holders will be well rewarded

[Beagle]

Really hoping I feel like this tomorrow morning. Its been a pretty rough start to 2022 for this doggie.
13541

[alokdhir]

Anything over $ 50 Mil NPAT and Divvy over 5 cents will do for me please . That should make even Mr B happy I hope !!!

[RTM]

Really hoping I feel like this tomorrow morning. Its been a pretty rough start to 2022 for this doggie.
13541

Remember there is the Heartland wait…usually about 11am from memory….

[Beagle]

Remember there is the Heartland wait…usually about 11am from memory….

Thanks mate. Full year announcement last year was 9.33 a.m. and half year 9.32 last year.

[winner69]

Thanks mate. Full year announcement last year was 9.33 a.m. and half year 9.32 last year.

Bankers not renowed for early starts

[arekaywhy]

haha, down to the minute, love it

[alokdhir]

Bankers not renowed for early starts

How come W69 doesn't have his forecast of NPAT and Divvy ....normally your calculations are pretty much on the spot ...favour us with your take till we wait for the actuals ....hazard an estimate !!

[winner69]

How come W69 doesn't have his forecast of NPAT and Divvy ....normally your calculations are pretty much on the spot ...favour us with your take till we wait for the actuals ....hazard an estimate !!

ha ha .... leaving it up to Jeff to please us this time

Not worried about the divie ..... they shouldn't be paying out so much to start with

[X-men]

out..NPAT $47.5m and dividend 5.5cents

[Muse]

guidance FY22 npat of 93-96m

[percy]

out..NPAT $47.5m and dividend 5.5cents

Excellent result.
The higher than expected divie is a pleasant surprise.Record date 1st March.Payment date 16th March.
Those RELs are certainly performing.

[Beagle]

Agreed Percy. I'm very happy indeed. Good to see strong lending growth which means they are well positioned for ongoing growth in the years ahead. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HGH/387639/365045.pdf

[Bjauck]

Excellent result.
The higher than expected divie is a pleasant surprise.Record date 1st March.Payment date 16th March.
Those RELs are certainly performing.
2019 Divi 3.5c/share
2020 Divi 4.5c/share
2021 Divi 4.0c/share
2022 Divi 5.5c/share

A 57% increase in the interim divi over 3 years. It certainly helps compensate for income drops elsewhere!

It is good to see that the net interest margin was up by 3bps.

They trumpeted the Canstar savings bank award.

Happy holder.

[winner69]

Jeff 'managing' reported profit and market expectations (guidance) in his usual way

As rolling 2 half year (12 months) npat is now $92m you would have to assume that there will be a smallish profit upgrade sometime in May/June

Here's how Jeff has 'managed' things over the years

[Beau]

Yes excellent interim result steady as it goes.

[Shareguy]

Another excellent result. Still plenty of growth to come in reverse mortgages. Love that divi.

[X-men]

Hgh always delivers...

[sb9]

Jeff 'managing' reported profit and market expectations (guidance) in his usual way

As rolling 2 half year (12 months) npat is now $92m you would have to assume that there will be a smallish profit upgrade sometime in May/June

Here's how Jeff has 'managed' things over the years

Jeff is the man with Midas touch :)

[Beau]

Hgh always delivers...
Yes a very sound long term investment especially with compounding dividend builds up very nicely indeed.

[winner69]

Jeff is the man with Midas touch :)

....hope he doesn't end up like Midas (at least according to Aristotle)

[alokdhir]

....hope he doesn't end up like Midas (at least according to Aristotle)

At present market is not very impressed like all here ...maybe its fairly valued at current SP ...real mover will be full year results with next year guidance ...maybe thats when market will update SP as per new guidance like last year .

[percy]

2019 Divi 3.5c/share
2020 Divi 4.5c/share
2021 Divi 4.0c/share
2022 Divi 5.5c/share

A 57% increase in the interim divi over 3 years. It certainly helps compensate for income drops elsewhere!

It is good to see that the net interest margin was up by 3bps.

They trumpeted the Canstar savings bank award.

Happy holder.

The increase in NIM was excellent considering the changed balance of revenue.ie Higher mortgages and less business loans.

[Beagle]

At present market is not very impressed like all here ...maybe its fairly valued at current SP ...real mover will be full year results with next year guidance ...maybe thats when market will update SP as per new guidance like last year .

eps at mid point of guidance is 16.0 cps so its on a forward PE of 15.0 It is, as you suggest about fair value here and a great long term hold for steady growth in eps and dividends. Boring is good :sleep:

[iceman]

I'm a little underwhelmed with this result. Steady increases in NIM, ROE and NPAT and a great increase in dividends. But I was expecting a bit more I must admit. Thankfully my next biggest holding after HGH (3rd & 4th biggest) came out with a great result. Thanks PGW and HGH.

[winner69]

eps at mid point of guidance is 16.0 cps so its on a forward PE of 15.0 It is, as you suggest about fair value here and a great long term hold for steady growth in eps and dividends. Boring is good :sleep:

PE of 15 is above average for Heartland .... so slowly but surely getting re-rated.

How does PE look v your peer group

[Beagle]

PE of 15 is above average for Heartland .... so slowly but surely getting re-rated.

How does PE look v your peer group

FY22 forward PE's for peer group

BEN 11.9
BOQ 13.2
ANZ 13.7
NAB 16.0
WBC 17.3
CBA 17.4
Average 14.9

All taken off market screener and is the average of all analysts forecasts.

My view is that HGH confers some key advantages not the least of which is the full imputation credits attached to dividends.
The strong growth in reverse mortgages is very pleasing and the total addressable market is huge. Low risk and very good margin lending that's growing very strongly holds a lot of promise for growth going forward.

Any investor looking for strong and growing fully imputed dividend income in the years ahead, would struggle to find a more ideal company.

There is no logical reason HGH should trade at a discount to its peers, something I have been saying for many years.

P.S. Good to see the high risk unsecured lending through Harmoney falling away. Long may that trend continue !

[iceman]

Thanks Beagle. HGH sits comfortably in the middle where I think it should be. I think we are fairly priced at the moment and have no intention to either buy or sell.

[percy]

FY22 forward PE's for peer group

BEN 11.9
BOQ 13.2
ANZ 13.7
NAB 16.0
WBC 17.3
CBA 17.4
Average 14.9

All taken off market screener and is the average of all analysts forecasts.

My view is that HGH confers some key advantages not the least of which is the full imputation credits attached to dividends.
The strong growth in reverse mortgages is very pleasing and the total addressable market is huge. Low risk and very good margin lending that's growing very strongly holds a lot of promise for growth going forward.

Any investor looking for strong and growing fully imputed dividend income in the years ahead, would struggle to find a more ideal company.

There is no logical reason HGH should trade at a discount to its peers, something I have been saying for many years.

P.S. Good to see the high risk unsecured lending through Harmoney falling away. Long may that trend continue !

I agree with you.
A lot to like with HGH.
I also think directors and management having such large holdings,makes them fully focused on shareholders' interests.
Can't comment on HMY as I do not follow them

[winner69]

Suppose 8.8% increase in NPAT (normalised) v pcp and 7.7% increase in EPS (normalised) is pretty reasonable .... not double digit though

Book Value up 4.4% from a year ago and 1.6% from June 21

Too much paid out in divies

[iceman]

Suppose 8.8% increase in NPAT (normalised) v pcp and 7.7% increase in EPS (normalised) is pretty reasonable .... not double digit though

Book Value up 4.4% from a year ago and 1.6% from June 21

Too much paid out in divies

I agree winner. As much as I like the dividends, I think they've increased them too much.

[Beagle]

Dividend comment and upgrade to my forecast.

Well worth noting from the presentation that their capital ratio is 13.0% and that the company has 7 years from 1/7/2022 to bring that ratio up to the 16% mandated by RBNZ and that they believe they are on track to achieve that "organically", or some such similar term, forgive me I've forgotten.

Most everyone will already be aware of the DRIP (dividend reinvestment plan) and that shares issued are at a 2% discount.

I am highly supportive of a high dividend yield on the basis that the company has stated they're on track to meet the new much higher capital ratio over time and that the current level's of dividends paid are clearly not impinging upon their growth.

People who have no immediate need for the dividend in cash can easily reinvest in shares and achieve compounding growth over time at an advantageous entry price.

Upgrade to my dividend forecast. I was previously expecting an FY23 dividend of 13 cps, but I am bringing this forward a year to FY22 and am now expecting a 7.5 cps final dividend, up 0.5 cps on 2021 for a total of 13 cps this year but wouldn't rule out a special dividend to celebrate the end of mandated dividend constraints from RBNZ.

My guess is growth in FY23 will be at a similar rate to FY22, (about 7-8%) and the dividends will grow in line with eps so I am hoping for 14 cps in FY23, up from my earlier expectations of 13 cps.

Gross prospective FY23 yield on a net investment basis now.
Current share price $2.40 less 5.5 cps back in a few weeks time = net investment for FY23 income of $2.345.

14 cps fully imputed = 14 / 0.72 = 19.44 cps gross which on $2.345 gives a gross prospective yield of 8.29%

Those like myself fully subscribed to the DRIP can effectively boost their yield higher given their dividend remuneration is issued at a 2% discount so the effective gross yield is 8.29 / 0.98 = 8.46%. Out on my walk in the park today i pondered what that yield based on the net price mentioned above would look like 5 years from now. Hmmm...if they can keep eps and dividends growing at 7% for the next 5 years then the gross yield on today's net share price is just on 12%. I reckon that's food for more thought.

My price target for 31 March 2023 is $2.60. Between now and then there will be 2 interim dividends paid totaling by my estimate 5.5 cps + 6.0 cps next year and the final dividend for FY22 of an estimated 7.5 cps, total 19 cps + 20 cps forecast share price gain = total forecast gain of 39 cps for a total shareholder return of ~ 16%.

P.S. As I type the deteriorating geo political environment in Europe is having a material effect on markets that are open today and the Dow Jones futures as of a few minutes ago are down ~ 500 points. People have to decide for themselves about the risks and whether that creates an opportunity to get these shares cheaper than they should be.

[winner69]

...................
There is no logical reason HGH should trade at a discount to its peers, something I have been saying for many years.

!

But on Price to Book ratio they are almost up there with CBA and well ahead of the others ....so rated very highly v peers

I know its 'all about earnings' but ROE (an earnings measure) / Equity (Book Value) / PE ratios etc are inexorably linked

[X-men]

Wtf happening...down more than 3%

[Beagle]

Russia just invaded Ukraine.

[Shareguy]

I think the cccfa rules will have a big impact here and of course their shareholding in harmony which will where the brunt. Going to go through it all tonight.

[Snoopy]

Too much paid out in divies


Easy fix for that. Join the DRP! And for the next dividend it looks like it will come with a 'Putin' discount!

SNOOPY

[percy]

Easy fix for that. Join the DRP! And for the next dividend it looks like it will come with a 'Putin' discount!

SNOOPY

The very strong support from shareholders for DRP means HGH can pay high dividends.

[percy]

I think the cccfa rules will have a big impact here and of course their shareholding in harmony which will where the brunt. Going to go through it all tonight.

"The introduction of changes to the New Zealand Credit Contracts and Consumer Finance Act 2003 and the Credit Contracts and Consumer Finance Regulations 2004 (CCCFA) slowed growth in Motor and online Home Loans in January and February 2022. This has the potential to impact on the growth rate for the remainder of the six-month period ending 30 June 2022 (2H2022). This is being partially offset by growth in other areas, especially Reverse Mortgages in Australia and New Zealand, and no material reduction in anticipated full year growth is expected."

Looks as though the regulators have work to do.
For a good number of people,no car, no work.

[winner69]

Wtf happening...down more than 3%

Brutal end to day eh …..jeez 233

[Grimy]

Only a cent lower than a week ago.....

[value_investor]

My take on the results

- Solid results from first glance, interest income is going to continue generating cash into the future especially with interest rates going up, it also means that impairment will be going up. Interesting to see in 6 months how that looks, how many loans financed at low rates. Rates are going up in at least the next 3 announcements, so by the FY result its likely we'll see a hike up at a minimum 0.75% (all things remaining equal to now).

- The above can already be seen, if you go into note 4 asset impairment expense is up from $4.5m to $8.5m. Expect this to continue going up in the future, with rates increasing. I think that expected credit losses going forward, depending on the risk profile will creep up. Mostly a question of how much considering the general economy. Keeping in mind we are at record low unemployment and higher income tax takes than ever before indicating we are quite frothy from a liquidity stand point. See here https://www.interest.co.nz/public-policy/113896/higher-employment-levels-and-bracket-creep-are-combining-shift-extra-14-bln

- Dividends growing again at a steady pace, I think there is actually room to increase these again at the FY result considering the effects of Covid probably didn't present as much as we first thought. However, they chose to be prudent during those times and there could still be a flow on effect of that as mentioned above.

Overall, its a pretty solid result given the general market. I think we are seeing prices being suppressed on the back of it with everything else that is going on. Interest rate rises, Covid, Ukraine/Russia conflict. The outlook is still strong and could be a buy if it goes lower. Currently sitting at a PE of 14.5, which I would say given the industry is just above fair value. Anything sub $2.00 is a fantastic buy, and without the constraints mentioned its probably touching $3.00 with a cheeky guidance update between now and the FY result.

Disc: long term holder.

[alokdhir]

Brutal end to day eh …..jeez 233

Was just short term punters squaring in disappointment as didn't get the bounce as wanted ...it will be back around $ 2.40 mark or over before it goes ex

[Greekwatchdog]

For Bars Review.
UNDERPERFORM


HGH's 1H22 result was below our expectations with NPAT of NZ$47.1m lower than forecast NZ$49.5m, driven by softer than expected yields across its portfolio, generating a disappointing level of net interest income. Going forward we expect to see a modest slowdown in loan receivable growth given the introduction of the new CCCFA responsible lending regulations and anticipate some additional impairment pressure from rising rates and stimulus roll off. HGH has historically traded at an average -12% forward PE discount to its Australian banking peers, which we feel is appropriate given the considerable differences in scale, position in the market, competitive advantage and quality of assets. With HGH now trading at a material premium of +19% to these Australian banking peers, we reiterate our UNDERPERFORM rating. ​​​​​


link
NZX Code HGH
Share price NZ$2.35
Target price NZ$1.84 (from 1.95)
Risk rating High
Issued shares 574.3m
Market cap NZ$1,350m
Avg daily turnover 364.8k (NZ$774k)
link
Financials: Jun/ 21A 22E 23E 24E
NPAT* (NZ$m) 87.9 91.7 97.1 97.4
EPS* (NZc) 15.1 15.4 16.1 15.8
EPS growth* (%) 24.0 2.4 4.5 -1.8
DPS (NZc) 11.0 12.0 12.5 13.0
Imputation (%) 100 100 100 100
*Based on normalised profits
link
Valuation (x) 21A 22E 23E 24E
PE 15.6 15.2 14.6 14.8
EV/EBIT n/a n/a n/a n/a
EV/EBITDA n/a n/a n/a n/a
Price / NTA 2.0 1.3 1.1 1.0
Cash div yld (%) 4.7 5.1 5.3 5.5
Gross div yld (%) 6.5 7.1 7.4 7.7
What's changed?
Earnings: FY22 NPAT decreased -NZ$2m (2%) from NZ$94m to NZ$92m
Target price: Decreased -11cps (-6%) from NZ$1.95 to NZ$1.84 driven by 1) WACC changes, and 2) minor earnings revisions
Amortisation expense treated as non-recurring?
Following a 1H22 amortisation charge of NZ$3m vs NZ$7m in 1H21 we note that HGH's FY22 earnings (and guidance) will be inflated by removal of a one off amortisation charge of NZ$4.3m (accounted for as a one off exceptional item at FY21). Taking this into account and applying the FY22 NPAT guidance (reported) of NZ$93m–NZ$96m we believe the market will interpret the underlying range to be nearer NZ$90m–NZ$93m. Our underlying FY22 forecast NPAT decreases from NZ$94m to NZ$92m (the mid point of this range) given minor earnings revisions driven by recent regulatory changes and rising interest rates.


New lending rules a headwind for residential mortgage aspirations
Following changes to the Credit Contracts and Consumer Finance Act (CCCFA), from December 2021 the eligibility criteria on the affordability of credit has narrowed and lenders have been required to tighten lending criteria. We believe the impact will be felt most at the higher risk end of the market (historically HGH's share of the market, as shown by the RBNZ dashboard). This may be a significant headwind as HGH looks to break into the residential mortgage market and for future growth in its motor division.


The Deposit Takers Act — additional regulation to negotiate
The Deposit Takers Act, currently in draft format and indicatively scheduled to become law in 2023, creates a single regulatory regime for all deposit takers. It also introduces the Depositor Compensation Scheme, covering losses of up to NZ$100k for each depositor. The scheme will be overseen by the RBNZ and funded by all deposit takers, including HGH. Whilst the indicative cost to HGH is yet to be confirmed, the Act highlights the complex and costly regulatory environment in which HGH continues to operate in.

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/cc2X3cZq9zplfbh87dWCog/hdoL8PGylECU892yqqSvQrLQ

[X-men]

Never trust frosty crook....

[850man]

This isn't helping either - from this article below (paywalled) "The decline rate for Heartland Bank's vehicle lending has tripled since the Government tightened consumer credit laws, its chief executive Chris Flood says.And the company is having to use four times as many employees to process its loans with approval times for a standard car loan increasing from 20 minutes to two hours."

https://www.nzherald.co.nz/business/bank-boss-decline-rate-for-motor-vehicle-loans-has-increased-three-fold-after-credit-law-change/6OT4XFQ4ROATFR7HJTBWWAUDF4/

[winner69]

Chris Flood has a lot to say - hates spending more to do less

Bank boss: Decline rate for motor vehicle loans has increased three-fold after credit law change

https://www.nzherald.co.nz/business/bank-boss-decline-rate-for-motor-vehicle-loans-has-increased-three-fold-after-credit-law-change/6OT4XFQ4ROATFR7HJTBWWAUDF4/

[winner69]

Beagle won't agree with this but from Forbar ..... but then again it's Forbar after all

HGH has historically traded at an average -12% forward PE discount to its Australian banking peers, which we feel is appropriate given the considerable differences in scale, position in the market, competitive advantage and quality of assets. With HGH now trading at a material premium of +19% to these Australian banking peers, we reiterate our UNDERPERFORM rating. ​​​​​

[Ggcc]

Chris Flood has a lot to say - hates spending more to do less

Bank boss: Decline rate for motor vehicle loans has increased three-fold after credit law change

https://www.nzherald.co.nz/business/bank-boss-decline-rate-for-motor-vehicle-loans-has-increased-three-fold-after-credit-law-change/6OT4XFQ4ROATFR7HJTBWWAUDF4/

And from a large local dealer I spoke with, they all moved to Oxford to get stuff done quicker than the banks. This was only short term as the banks will adapt eventually.

[Greekwatchdog]

Wouldn't expect the "dog" to agree but then we are all entitled to an opinion. People just like to shoot the so called experts as they are easy targets and everyone always remember being stitched by them.
Then they forget when they are wrong so it all ends up one way.

Its there to offer a balanced perspective from someone else"s eyes. Its not there to please so called Sharetrader experts.

[percy]

Wouldn't expect the "dog" to agree but then we are all entitled to an opinion. People just like to shoot the so called experts as they are easy targets and everyone always remember being stitched by them.
Then they forget when they are wrong so it all ends up one way.

Its there to offer a balanced perspective from someone else"s eyes. Its not there to please so called Sharetrader experts.

Pity the Sharetrader experts show up the brokers' research departments so often.
Interesting to remember when HGH first was formed ,and was listed, Forbar was about the only broker whose forecasts were correct.I expect that analyst has moved onto greater things.
Although Forbar now have a less than 50% correct predictions with HGH,Jeff Greenslade, HGH's CEO's predictions remain at near 100%.

[Greekwatchdog]

Pity the Sharetrader experts show up the brokers' research departments so often.
Interesting to remember when HGH first was formed ,and was listed, Forbar was about the only broker whose forecasts were correct.I expect that analyst has moved onto greater things.
Although Forbar now have a less than 50% correct predictions with HGH,Jeff Greenslade, HGH's CEO's predictions remain at near 100%.

They win some they lose some. Your money your investing so only research matters.

[Beau]

[QUOTE=percy;943645]Pity the Sharetrader experts show up the brokers' research departments so often.
Interesting to remember when HGH first was formed ,and was listed, Forbar was about the only broker whose forecasts were correct.I expect that analyst has moved onto greater things.
Although Forbar now have a less than 50% correct predictions with HGH,Jeff Greenslade, HGH's CEO's predictions remain at near 100%.[/QUOTE

Well put Percy and how true .

[RTM]

[QUOTE=percy;943645]Pity the Sharetrader experts show up the brokers' research departments so often.
Interesting to remember when HGH first was formed ,and was listed, Forbar was about the only broker whose forecasts were correct.I expect that analyst has moved onto greater things.
Although Forbar now have a less than 50% correct predictions with HGH,Jeff Greenslade, HGH's CEO's predictions remain at near 100%.[/QUOTE

Well put Percy and how true .

And if I recall correctly Percy had about the same consistent prediction rate as Jeff.
Well done Percy. Still my biggest holding. 8.5%

[Beagle]

Forbar have been consistently downbeat on HGH in recent years and have been consistently wrong.
They never rung the bell at the bottom or even tried too.

I am not pretending for one minute I am always right but I put up one of the most emphatic posts on here I have ever made, (rung the bell in other words), in early November 2020 that at ~ $1.30 these were exceptionally good buying and it was time to back up the truck, which is exactly what I did. The outperformance since then has been extraordinary in what has been a flat market overall. All that time Forbar have been really downbeat on HGH and have remained so ever since. Counting dividends received I've nearly doubled my money in 16 months on that truckload so I need a trailer now as well :t_up:

My own work yesterday showed that on a forward FY22 basis HGH is trading in line with its peer group.

For the record:- I was with Forbar for about 10 years on full advisory service. I left more than a decade ago because I thought I could do a lot better with my own analysis than they could, a decision I have never for one minute regretted.

Their claim that HGH is now trading at a premium to its peer group must be predicated upon a very different peer group than I used.
I think their valuation is completely ridiculous. I am happy with my $2.60 price target for March 2023.
I think a famous line from the movie Wall street says it best, "Their analyst wouldn't know preferred stock from livestock".

[alokdhir]

Forbar have been consistently downbeat on HGH in recent years and have been consistently wrong.
They never rung the bell at the bottom or even tried too.

I am not pretending for one minute I am always right but I put up one of the most emphatic posts on here I have ever made, (rung the bell in other words), in early November 2020 that at ~ $1.30 these were exceptionally good buying and it was time to back up the truck, which is exactly what I did. The outperformance since then has been extraordinary in what has been a flat market overall. All that time Forbar have been really downbeat on HGH and have remained so ever since. Counting dividends received I've nearly doubled my money in 16 months on that truckload so I need a trailer now as well :t_up:

My own work yesterday showed that on a forward FY22 basis HGH is trading in line with its peer group.

For the record:- I was with Forbar for about 10 years on full advisory service. I left more than a decade ago because I thought I could do a lot better with my own analysis than they could, a decision I have never for one minute regretted.

Their claim that HGH is now trading at a premium to its peer group must be predicated upon a very different peer group than I used.
I think their valuation is completely ridiculous. I am happy with my $2.60 price target for March 2023.
I think a famous line from the movie Wall street says it best, "Their analyst wouldn't know preferred stock from livestock".

I am with u on this one ...Jarden and many others are positive ...Your $ 2.60 by March 2023 ...maybe more will come after August results and new guidance ...as market trusts HGH guidance so it immediately updates SP accordingly . This normally happens after full year results .

[alokdhir]

Does HGH has any Russian connection ? why free fall for a stable bank ...maybe Mr B went out of this too ...:p

[RTM]

222 - 5.5 divie...seems like a steal.

[Beagle]

Almost everything got bashed with the ugly stick today.

[alokdhir]

Now HGH is almost 8% gross yield stable outlook stock with rising profits and reliable dividends . Maybe it will find support today

[winner69]

Heartland H1 profit up 8% on pcp

Kiwibank H1 profit up 16% ...... hmmm

[Beagle]

Now HGH is almost 8% gross yield stable outlook stock with rising profits and reliable dividends . Maybe it will find support today

I gave it some this morning.

[JohnnyTheHorse]

I gave it some this morning.

Got my traders foot in this morning :). Easy money.

[alokdhir]

I gave it some this morning.

I had my extra fill yesterday at closing ...cud not resist 2.22 coming out as auction price ....maybe it will turn out to be golden buy of this year ...only time will tell or shall I say only Russia will know ...lol

[Rawz]

I gave it some this morning.

Beagle are you starting to drip feed your hoard of cash back into the market?

Bottom is in you reckon?

[Beagle]

Beagle are you starting to drip feed your hoard of cash back into the market?

Bottom is in you reckon?

I couldn't resist putting a paw up for a small top up in the low 220's. I really like the forecast FY23 yield at that price.
Its was only a very small buy of another 10,000.

Its going to be really hard to pick the bottom so I'm just trying to pick up a few shares of different companies on a case by case basis when they get beaten down too much...sort of dollar cost averaging back in slowly over time.

Its just a very very small and very tentative start, nothing more than that.

[newbieinvestor]

I couldn't resist putting a paw up for a small top up in the low 220's. I really like the forecast FY23 yield at that price.
Its was only a very small buy of another 10,000.

Its going to be really hard to pick the bottom so I'm just trying to pick up a few shares of different companies on a case by case basis when they get beaten down too much...sort of dollar cost averaging back in slowly over time.

Its just a very very small and very tentative start, nothing more than that.


Hi Beagle,

I made a small buy of HGH today, and was reading up about the DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) given the record date is on 2nd March. I am guessing since you are already an existing shareholder you have the DRIP in place.
Given I am a newbie with sharesies and trying to open (https://investorcentre.linkmarketservices.co.nz/Login/Login) an Linked account (https://investorcentre.linkmarketservices.co.nz/OpenAccess/ValidateHolding) to enable DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) using but dont quite know the Sharesies CSN or FIN...
What would be your suggestion - perhaps I should do it next time via fill up the physical form?

Thanks!

[Snow Leopard]

Hi Beagle,

I made a small buy of HGH today, and was reading up about the DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) given the record date is on 2nd March. I am guessing since you are already an existing shareholder you have the DRIP in place.
Given I am a newbie with sharesies and trying to open (https://investorcentre.linkmarketservices.co.nz/Login/Login) an Linked account (https://investorcentre.linkmarketservices.co.nz/OpenAccess/ValidateHolding) to enable DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) using but dont quite know the Sharesies CSN or FIN...
What would be your suggestion - perhaps I should do it next time via fill up the physical form?

Thanks!

If you bought your shares through Sharesies and they are held via Sharesies then they/you can not take part in the DRiP and you will get the cash.

You can arrange to transfer shares out of Sharesies into your own name (for a fee I believe). Afer that you could sign them up for the DRiP

[newbieinvestor]

If you bought your shares through Sharesies and they are held via Sharesies then they/you can not take part in the DRiP and you will get the cash.

You can arrange to transfer shares out of Sharesies into your own name (for a fee I believe). Afer that you could sign them up for the DRiP


Thanks Snow Leopard!:t_up:

[Cyclical]

Hi Beagle,

I made a small buy of HGH today, and was reading up about the DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) given the record date is on 2nd March. I am guessing since you are already an existing shareholder you have the DRIP in place.
Given I am a newbie with sharesies and trying to open (https://investorcentre.linkmarketservices.co.nz/Login/Login) an Linked account (https://investorcentre.linkmarketservices.co.nz/OpenAccess/ValidateHolding) to enable DRIP (https://shareholders.heartland.co.nz/shareholder-resources/dividends) using but dont quite know the Sharesies CSN or FIN...
What would be your suggestion - perhaps I should do it next time via fill up the physical form?

Thanks!


If you bought your shares through Sharesies and they are held via Sharesies then they/you can not take part in the DRiP and you will get the cash.

You can arrange to transfer shares out of Sharesies into your own name (for a fee I believe). Afer that you could sign them up for the DRiP

Or just take the cash dividend via Sharesies and invest it back into HGH ex div...probably isn't going to be a lot in it and you may even be lucky enough to score them cheaper.

[iceman]

Or just take the cash dividend via Sharesies and invest it back into HGH ex div...probably isn't going to be a lot in it and you may even be lucky enough to score them cheaper.

Could be an expensive way of doing it if people are talking about fairly modest number of shares. DRP much better without fees payable.

[RTM]

I couldn't resist putting a paw up for a small top up in the low 220's. I really like the forecast FY23 yield at that price.
.

Same, got quite a surprise when my 223c order was partially filled on Friday.
About 10% of portfolio now. Bit high, couldn’t resist.

[BlackPeter]

Could be an expensive way of doing it if people are talking about fairly modest number of shares. DRP much better without fees payable.

I think he is talking about sharesies investors. Their fees are from memory .5% on small orders (less on large orders) - quite neglectable in the play of things. Buy shares for $10 and pay 5 cents fees. That's affordable.

[Cyclical]

I think he is talking about sharesies investors. Their fees are from memory .5% on small orders (less on large orders) - quite neglectable in the play of things. Buy shares for $10 and pay 5 cents fees. That's affordable.

That's correct.

[alokdhir]

Today is last day of Cum Dividend I think ...so for 5.5 cents it can go to $ 2.35 maybe ....

[winner69]

eartland do well out of the old people ....so I hope Jeff is on the ball and will make it easy for oldies to do everyday banking ...after all as the article says we'll all be idiots one day ...and Heartland could be showing strategic foresight

‘I’m old, not an idiot’: the elderly are ill-served online

https://www.ft.com/content/cdf03d65-5045-4c3a-8384-cae176cda2fb

Hopefully you'l be able to read

And you youngsters can laugh your heads off if you so desire

[clearasmud]

eartland do well out of the old people ....so I hope Jeff is on the ball and will make it easy for oldies to do everyday banking ...after all as the article says we'll all be idiots one day ...and Heartland could be showing strategic foresight

‘I’m old, not an idiot’: the elderly are ill-served online

https://www.ft.com/content/cdf03d65-5045-4c3a-8384-cae176cda2fb

Hopefully you'l be able to read

And you youngsters can laugh your heads off if you so desire
Their banking software is still **** isn't it?

[Grimy]

It is certainly the worst of the 4 banks I deal with. It does the job, but not user friendly.

[winner69]

Their banking software is still **** isn't it?

I give a wry smile when I end up having to talk to a real person when Jeff harps on about making everything digital and not having the need for lots of people.

[Bjauck]

It is certainly the worst of the 4 banks I deal with. It does the job, but not user friendly. I find their internet banking is horrible to deal with! It is much easier to use a real person via Heartland's phone banking.

[sb9]

Dairy prices have risen to a record high at this morning's Global Dairy Trade auction, with the GDT price index gaining 5.1 per cent since the last auction.

https://www.nzherald.co.nz/business/dairy-price-rally-continues-gdt-index-up-51pc/HSUT5OZAAS7MFSOZCZBVJSHHYM/

[Beagle]

Not sure what the fuss is with their online banking system. Its seems to work okay for me.

[pierre]

Not sure what the fuss is with their online banking system. Its seems to work okay for me.

Agree it works okay-ish - but it's very ugly and looks like it was developed by someone from the Kremlin school of architecture.

[Marilyn Munroe]

I find their internet banking is horrible to deal with! It is much easier to use a real person via Heartland's phone banking.

I bereave it is an off the self solution supplied by Oracle.

Boop boop de do
Marilyn

[Bjauck]

Not sure what the fuss is with their online banking system. Its seems to work okay for me.
It had been some months since I logged on to internet banking (as I found it dreadful.) I had been using the iOS app, which is very good, and phone banking. I logged on to internet banking today, and it has been upgraded since my last visit. It is now very much smoother and more intuitive to find what I want.

Previously each click opened up a new window and the message centre always produced an error for me.

[Muse]

Old Heartland getting smashed this morning off small volumes - down 4.5% to $2.10 and sellers at $2.09. Interesting the SP has now moved to slightly below the spot valuation from the brokers. Implies healthy net yields of +6% from here. But if the oil embargo happens that's probably going to reset spending and borrowing patterns and the consensus will no longer remain a valid baseline. Just think though - at 6% net yield - you are just keeping up with inflation even pre ukraine war - wild times.





Normalised EPS
FY22
FY23
FY24


Jarden
0.159
0.168
0.183


Craigs
0.161
0.169
0.176


Macquarie
0.162
0.166
0.180


Forbar
0.154
0.161
0.158


Average
0.159
0.166
0.174


Spot PE @ $2.10
13.21x
12.65x
12.05x














DPS
FY22
FY23
FY24


Jarden
0.13
0.135
0.14


Craigs
0.13
0.1365
0.141


Macquarie
0.135
0.145
0.155


Forbar
0.12
0.125
0.13


Average
0.129
0.135
0.142


Spot yield @ $2.10
6.1%
6.4%
6.7%














Valuation
Spot
TP



Jarden
2.33
2.46



Craigs
2.17
2.27



Macquarie
2.24
2.33



Forbar
1.78
1.84



Average
2.13
2.23

[audiav]

Feeling like deja vu. A while back bought into H around 1.50ish and it soon got pulled back to 1.20 ish (I think that’s when Beagle backed up the truck). Sold at 1.90 to do some Reno’s. So now a possible re-entry point :)

[Beagle]

Old Heartland getting smashed this morning off small volumes - down 4.5% to $2.10 and sellers at $2.09. Interesting the SP has now moved to slightly below the spot valuation from the brokers. Implies healthy net yields of +6% from here. But if the oil embargo happens that's probably going to reset spending and borrowing patterns and the consensus will no longer remain a valid baseline. Just think though - at 6% net yield - you are just keeping up with inflation even pre ukraine war - wild times.





Normalised EPS
FY22
FY23
FY24


Jarden
0.159
0.168
0.183


Craigs
0.161
0.169
0.176


Macquarie
0.162
0.166
0.180


Forbar
0.154
0.161
0.158


Average
0.159
0.166
0.174


Spot PE @ $2.10
13.21x
12.65x
12.05x














DPS
FY22
FY23
FY24


Jarden
0.13
0.135
0.14


Craigs
0.13
0.1365
0.141


Macquarie
0.135
0.145
0.155


Forbar
0.12
0.125
0.13


Average
0.129
0.135
0.142


Spot yield @ $2.10
6.1%
6.4%
6.7%














Valuation
Spot
TP



Jarden
2.33
2.46



Craigs
2.17
2.27



Macquarie
2.24
2.33



Forbar
1.78
1.84



Average
2.13
2.23










Great post. If they pay 14 cps in dividends in FY23 up from 13 cps this year that's a gross yield of 9.26%.
If that gets to 10% ($1.94 share price) I'm getting the truck out.

[Muse]

Great post. If they pay 14 cps in dividends in FY23 up from 13 cps this year that's a gross yield of 9.26%.
If that gets to 10% ($1.94 share price) I'm getting the truck out.

Aye on my watchlist

[alokdhir]

Did not know Forbar had so much influence in markets ...since FB report of underperform out after results ...HGH is not doing well ...Is it the Forbar report or the actual results which market did not like ? Hopefully it will do better ahead .

[Monarch]

HGH was largely tracking along with the NZ50 and ASF (finance smartshares etf) until reports day. When did forbar release their report?

[Muse]

Did not know Forbar had so much influence in markets ...since FB report of underperform out after results ...HGH is not doing well ...Is it the Forbar report or the actual results which market did not like ? Hopefully it will do better ahead .

Forbar's report was from 23 Feb. Highlights
* 1H npat came in $2.3m lower than their forecast, with lower than expected net interest income
* expect a slowdown in receivables from CCFA
* expect additional impairments from rising rates & stimulus roll off
* Forbar grumpy that HGH gone from trading at average discount of 12% to its comps to a 19% premium
* they noted FY22 earnings will be inflated by a removal of a one off amortisation charge
* noted the draft depopsit takers act as a risk
* showed charts showing its FWD PE premium vs peers has been high since mid 2021

[Beagle]

Did not know Forbar had so much influence in markets ...since FB report of underperform out after results ...HGH is not doing well ...Is it the Forbar report or the actual results which market did not like ? Hopefully it will do better ahead .

Just about everything has been hit with the ugly stick. Market making fools of almost all of us. I've previously posted what I think of Forbar analysis.

[alokdhir]

Just about everything has been hit with the ugly stick. Market making fools of almost all of us. I've previously posted what I think of Forbar analysis.

I remember we discussed just after results that around $ 2.40 is fair price at that moment ...market down just 3-5% since then but HGH down 11.5% at todays SP of $ 2.07 ...it was rock solid before ...CCFA worries ? I was not expecting a steady bank to underperform market ...as been told by W69 that banks do well in rising rates environment and they are good hedge in such times ...this has reasonable multiples also and solid yield ...

Maybe soon market will start liking it for above reasons if not for its steady growth ahead .

IMO its current fair value should be $ 2.25 -2.30

[Beagle]

Its been a tough month to be a HGH shareholder, no argument about that and the share price weakness has also really surprised me.
Over the last 3 months the share price movement has matched the NZX50 and over the last year its outperformed the index by just over 20%.

I have two possible theories for the recent weakness.
1. The market is pricing in considerable business failures resulting from the effects of the pandemic and maybe thinks HGH's existing Covid provisioning is not going to be enough to cover that.
2. The market is pricing in the very real chance of a bad recession driven off the back of the above in tandem with other concerns such as high inflation and soaring fuel prices because of the war.

These are very difficult times in the market with extreme volatility and high risk. I have been very transparent on here about the risks and my very high cash position which I built late last year. Everyone needs to think really hard about asset allocation strategies and decide for themselves what risk they're prepared to take in these incredibly uncertain times.

For what its worth I have a 6.7% portfolio allocation to HGH and am not selling it but will probably not add to it either until there is a new uptrend.

[Muse]

Its been a tough month to be a HGH shareholder, no argument about that and the share price weakness has also really surprised me.
Over the last 3 months the share price movement has matched the NZX50 and over the last year its outperformed the index by just over 20%.

I have two possible theories for the recent weakness.
1. The market is pricing in considerable business failures resulting from the effects of the pandemic and maybe thinks HGH's existing Covid provisioning is not going to be enough to cover that.
2. The market is pricing in the very real chance of a bad recession driven off the back of the above in tandem with other concerns such as high inflation and soaring fuel prices because of the war.

These are very difficult times in the market with extreme volatility and high risk. I have been very transparent on here about the risks and my very high cash position which I built late last year. Everyone needs to think really hard about asset allocation strategies and decide for themselves what risk they're prepared to take in these incredibly uncertain times.

For what its worth I have a 6.7% portfolio allocation to HGH and am not selling it but will probably not add to it either until there is a new uptrend.

Yeah I dunno either but got a third potential explanation - the unwinding of December’s big pop.

At close of November HGH sat at about 2.21 - a few broker picks publicised in the herald it jumped to 2.59 or up 17% over 6 weeks or so. I’m always a bit wary of those jumps as they can unwind quickly if they are momentum plays by newer less committed investors. As the peak cycles off disappointed expectations lead to a reversal in expectations and the trend collapses. Throw in a financial result that was just “very solid” and inline with guidance and we got a downtrend with everything else in the world.

I dont think the market is rational enough to have already repriced unemployment and macro uncertainty into HGH already, though its a risk. I just think positive sentiment is incredibly hard to maintain these days with all that is going on and in effect everything is being rerated down.

Unless I’m selling I dont really mind a falling market although I find it interesting and spend time assessing the catalysts and where they are headed as I love buying things and dont want to spend anything than I have to.

HGH is pure bottom drawer material - a solid well run company paying lots of divvies and leading the way in reverse mortgages

[percy]

HGH is part of my dividend portfolio.
Latest divie was better than expected,and HGH capacity to pay increasing future divies looks secure, with HGH's core businesses ;Reverse Equity Loans and Motor Vehicle financing providing above average returns,and in other areas HGH have the agility to move quickly to take advantage of opportunities.
The share price can go up,down, or sideways,however the increasing divies are why I hold, and will continue to hold HGH and my other divie holdings.

[Muse]

I've previously posted what I think of Forbar analysis.

I don't know why Forbar have their nickers in such a twist re Heartland. Sure it's price to book is at a slight premium to most of the Australian banks, but its well known that the single biggest driver of price to book is return on equity, where Heartland shines. It's PE is below its peers and has a superior dividend yield.

See heartland valuation (red dot) vs. its Australian peers below:

13621

If anything the analysis suggests Heartland is undervalued relative to its peers (heartland consistently below trendline on a price to book and PE basis). I'd say some discount is warranted given Heartlands smaller size, its evolution from an amalgamation of non bank lenders and eventual registered bank status, and mix of receivables but I certainly don't agree with Forbar that it is overvalued relative to its peers.

[winner69]

Good work FM but Heartland ratios might be a bit light

I reckon Heartland P/B is 1.59 at the moment -- like 210/132

Calanderisation?