HGH - Heartland Group Holdings

[Rawz]

You can't be serious that comments on here materially affected the share price. The market was very well aware HGH had a very serious level of exposure to the embattled dairy sector at the time and was reacting rationally to a very real risk of huge financial losses. Heartland took the risk to carry farmers through the crisis and in my view they were lucky to get away with it. My analysis shows Heartland badly underperformed the NZX50 during the dairy crisis...I suppose a lot depends upon what start and end dates you use to define this ill defined crisis. Fortunately these days the percentage of exposure to this sector is much lower relative to their expanding balance sheet.
Agree with your other points and I am very pleased to see their level of exposure to unsecured lending being dialed right back.
For the purposes of my own analysis I have already written off the value of their stake in Harmoney.

Oh my giddy aunt. You reckon HMY going bust?

[Beagle]

Oh my giddy aunt. You reckon HMY going bust?

Its not a business model I believe in. Algo's are completely unproven in a deep recession (unsupported by rampant central bank Covid support). Remember what happened to almost all finance company unsecured lending in the GFC ? How many dozens of finance companies went under ?...forgive me I've lost count / can't remember exactly, think it was more than 40 from vague memory. Geneva finance one of only a handful of survivors, (lucky Beagle clan dodged a bullet there, we had more than a few quid in them), and to this day, 15 years later they still have unused tax losses carried forward. Remember Handover, opps sorry, Hanover finance advertisements ? Richard Long extoling the virtues of them and saying they had "the strength to withstand any financial conditions", can I have a Tui to go with that LOL

Maybe Harmoney is a company targeting a new generation of investors who weren't investing back in the GFC ?
I would take a guess many of the current generation of investors chasing the Kathy Wood Ark investment style tech companies on the Nasdaq weren't around in the dot com bust 20 years ago.

[Rawz]

Its not a business model I believe in. Algo's are completely unproven in a deep recession (unsupported by rampant central bank Covid support). Remember what happened to almost all finance company unsecured lending in the GFC ? How many dozens of finance companies went under...forgive me I've lost count can't remember exactly, think it was more than 40 from vague memory. Geneva finance one of only a handful of survivors and to this day, 15 years later they still have unused tax losses carried forward.

If that tier 2 or 3 lender Geneva survived HMY should be just fine.

I wasnt that economically aware during GFC times but my understanding was all those finance companies that went into liquidation were involved in very very risky property lending and building resorts on Fiji etc?

Southern Cross, CBS Canterbury and MARAC survived as well :)

[Beagle]

If that tier 2 or 3 lender Geneva survived HMY should be just fine.

I wasnt that economically aware during GFC times but my understanding was all those finance companies that went into liquidation were involved in very very risky property lending and building resorts on Fiji etc?

Southern Cross, CBS Canterbury and MARAC survived as well :)

Geneva finance survived by the skin of their teeth and considerable multi year forbearance from the Bank of Scotland and several other private investors. There was all sorts of reckless finance company lending and misrepresentations to investors going on back then.
Of course Harmoney will tell you this time with their very special software programs and IT systems its different. Good luck with that but for me at 9 p.m. its definitely time for that Tui.

[Muse]

You can't be serious that comments on here materially affected the share price. The market was very well aware HGH had a very serious level of exposure to the embattled dairy sector at the time and was reacting rationally to a very real risk of huge financial losses. Heartland took the risk to carry farmers through the crisis and in my view they were lucky to get away with it. My analysis shows Heartland badly underperformed the NZX50 during the dairy crisis...I suppose a lot depends upon what start and end dates you use to define this ill defined crisis. Fortunately these days the percentage of exposure to this sector is much lower relative to their expanding balance sheet.
Agree with your other points and I am very pleased to see their level of exposure to unsecured lending being dialed right back.
For the purposes of my own analysis I have already written off the value of their stake in Harmoney.

I think its disingenuous to say HGH took a cavalier risk & attempted to carry farmers through the milk price downturn in hopes to "get away with it." The reality was then that their lending was concentrated on land & PPE, and not sharemilkers, which was the story being spruiked at the time.

Your "write-off" of HGH's stake in harmoney, equates to 1.5 cents per share on a mark to market basis (8.518m HMY shares, multiplied by $1.07 SP, equals $9.1m, divided by 592.9m HGH shares on issue). Doesn't seem like you have done much work on it, as despite all your fear mongering on this specific point, heartland's exposure to HMY is in rapid run off, and its stake in HMY is valued at only 1.5374 cents per HGH share. Doesn't seem like anything to get worked up over, even if one took your view on unsecured lending. so let's call it what it is - down ramping.

[Beagle]

Agree to disagree, no interest in relitigating the issue even if some more established posters on here seem incapable of letting it go. I'm not super proud of how dogmatic I was with the issue but you obviously don't know that I've apologized for that already years ago. If some people on here can't let that go after all these years, frankly that's their problem.

I'm well aware Harmoney is a very small part of their book. Its not hard to crunch the numbers even on my rusty old abacus LOL. All banks get put under the pump in a recession. Notice earlier how the link I posted to the YTD 21% reduction in the US bank index broadly reflects the reduction in HGH's share price this year ? Some US banks are already on a PE of 9. I still have some HGH shares. They go down to a PE of 9 in times of real trouble and are a great buy then.

Have a look at my very emphatic post in November 2020 when they were on that metric and I called them a great buy @ $1.30 and backed the truck and trailer up. They could easily go back to the same PE (about $1.53 based on forecast FY23 earnings), or maybe they stabilise around this level, and weather the coming recession okay...who knows, only time will tell. What is not in dispute is that the vast majority of banks are now firmly established in a bearish downtrend. In my experience buying into a confirmed downtrend with no TA support signals almost invariably gives more financial pain in the short term....an experience I have a fresh reminder of in respect to recent GNE purchases...silly old me.

[Rawz]

Geneva finance survived by the skin of their teeth and considerable multi year forbearance from the Bank of Scotland and several other private investors. There was all sorts of reckless lending and misrepresentations to investors going on back then.
Of course Harmoney will tell you this time with their very special software programs and IT systems its different. Good luck with that but for me at 9 p.m. its definitely time for that Tui.

HMY actually showed the market a wee bit about how their credit risk committee thinks- during 2nd qrt 2020 they basically shut up shop and stopped lending. Ultra conservative move. HGH and others carried on lending (correct move with hindsight).

Anyways- lets hope the Bank of Heartland doesnt become Harmoney's Bank of Scotland with the above said situation

[Beagle]

HMY actually showed the market a wee bit about how their credit risk committee thinks- during 2nd qrt 2020 they basically shut up shop and stopped lending. Ultra conservative move. HGH and others carried on lending (correct move with hindsight).

Anyways- lets hope the Bank of Heartland doesnt become Harmoney's Bank of Scotland with the above said situation

I sincerely hope not but that's certainly a potentially much more significantly sized fly in the ointment than the value of their ownership stake.

[Bjauck]

HMY actually showed the market a wee bit about how their credit risk committee thinks- during 2nd qrt 2020 they basically shut up shop and stopped lending. Ultra conservative move. HGH and others carried on lending (correct move with hindsight).

Anyways- lets hope the Bank of Heartland doesnt become Harmoney's Bank of Scotland with the above said situation

I am not certain now but I think, compared to Heartland, Harmoney's lending is still generally in a more risky market segment.

Although Harmoney is no longer P2P, the volume of new loans through the P2P Platforms such as Squirrel and Lending Crowd also dropped during the early Covid era. This may also have been because investors on those platforms took fright and started withdrawing their free balances from perceived "risky" P2P platforms, and deposited the proceeds in loans with greater security or in bank accounts.

https://www.squirrel.co.nz/blogs/financial-planning/p2p-investor-update-week-2-of-lockdown

[Muse]

I am not certain but I think, compared to Heartland, Harmoney's lending is generally in a more risky market segment.

Although Harmoney is no longer P2P, the volume of new loans through the P2P Platforms such as Squirrel and Lending Crowd also dropped during the early Covid era. This may also have been because investors on those platforms took fright and started withdrawing their free balances from perceived "risky" P2P platforms, and deposited the proceeds in bank accounts.

https://www.squirrel.co.nz/blogs/financial-planning/p2p-investor-update-week-2-of-lockdown

P2P lending does incur higher levels of incurred credit losses and provisions for future credit losses, although it tended to charge higher interest rates to attempt to compensate for that risk. None the less, p2p, for hmy at least, proved to be an inferior model to tradational warehouse and securitised lending, at the all important net lending margin line (interest income, less interest expense, less incurred credit loss). And a bit moot specific to HMY as they never held the lending on balance sheet, as it was done via trusts, and they were a service provider, not an actual lender. it proved very difficult to make money out of facilitating (as a service provider) p2p loans, as a lot of it was tide to originations and minimal if no tail on the lending itself.

Credit stats vary significant from p2p (oldco) to warehouse to securitisation (newco). thats for & covered on a different thread.

Specific to Heartland, they do still have a small exposure to p2p receivables, but is being repaid rapidly. HGH made sounds a year or so ago about expanding lending to HMY's warehouse/securitised on balance sheet business, but unclear where that is at. Sharing for interest some PM's I've had on HGH exposure to HMY.


QUESTION: I didnt know HGH didnt have a wholesale facility into HMY..?
But now that i think about it- could have meant it was p2p stuff. Which must be almost all repaid by now



they definitely have a facility but initially at least they were lending through HMY's p2p business. A lot of hmy's initial p2p / off balance sheet lending was funded by instos, some who specialised in p2p, as well as individuals. I actually dont understand how that works, how can an insto be considered p2p??? but the characteristics were the lending was in trust and off balance sheet from a HMY financial perspective. HMY stopped writing off balance sheet / p2p loans and those are running off. HGH FY21 receivables via harmoney was down 37%, and then at half year it more or less haved vs the pcp. the lending they were doing via hmy looked very profitable (at least at a NIM level, dunno about NLM) so must have been p2p

I forget when it was, perhaps in the FY21 result, hgh made noises that it was working to offer HMY an on balance sheet lending facility to support its transition to an on balance sheet/warehouse business. I didn't see any update from HGH in their 1H FY22 about it or other press articles, and given how fast its receivables declined in the 1H FY22 I just assumed it hasn't been completed yet.

hmy announce from time to time they got another warehouse provider but they are always cagy about saying who it is, so we cant be sure one of those was actually HGH. the last one they announced in february was one of the aussie big 4

[winner69]

The old farm gate milk price and Heartland 'exposure' to it saga ..... who could forget the angst it caused .... very emotional it was, esp to the Heartland believers and Jeff's disciples. Cant say bad things about Heartland was the lesson.

Have to say it did have ome impact on HGH share price

The HGH share price had seen a steady increase to the 120/130 up to early 2015. Farm gate milk price over $8

Farm gate milk price dropped to $4.40 in 2015 and $3.90 in 2016 seasons

Heartlands profit still kept going up .... but it's share price was still $1.30 odd in mid 2016

Farmgate mil prices started going up mid 2016 and payout was $6.12 for rthe 16/17 season (Fonterra) ,,,,, and the Heartland share price went from about $1.20 to $1.90

Spooky eh ..... low farmgate milk prices and subdued Heartland share price (with increasing profits) and then over next year booming farmgate prices and Heartland share price

Could sat the low farmgate milk prices didn't impact Heartlands profit but the sentiment around the milk prices did impact the share price

Heartland investors should still follow Global Dairy Trade prices which to some extent drives farmgate milk prices .... and seems to in a weird sort of way give an idea as to what way the Heartland share price will hed

[winner69]

Jeez HGH share price back into the 180’s

[Waltzing]

"180’s"

Nice ....

[Sideshow Bob]

Jeez HGH share price back into the 180’s

Back to where it was late May last year.....

[winner69]

Back to where it was late May last year.....

Down 30% from recent high of 259

Suppose we can only dream of it recovering to 259 ..... but a dream worth pursuing I reckon ..... that would be a 40% gain from here

[bull....]

lol like most of these types of stocks they dont do well in a recession

[alokdhir]

lol like most of these types of stocks they dont do well in a recession

Recession is not yet a done deal ...but recession SP is almost done at 1.83 ...also with very high employment ...it will take very long duration of high rates to actually precipitate deep recession ..of the type which can hurt HGH actually ...so IMO its 50/50 ...if future is bleak for HGH

[mike2020]

Depending on the final divi I would think this is now close to 10% return. You have to factor in another strong rise in the ocr to see an 18 month TD over 4%.
It seems from my own perspective the Reserve banks seem to signal more than act. Rates lower for longer was the most recent example. HGH management has been described in glowing terms of reliability. I have read every post on HGH for as long as I can remember. At what rate of return do you all see it as a buy? 12%? 15?

[alokdhir]

Depending on the final divi I would think this is now close to 10% return. You have to factor in another strong rise in the ocr to see an 18 month TD over 4%.
It seems from my own perspective the Reserve banks seem to signal more than act. Rates lower for longer was the most recent example. HGH management has been described in glowing terms of reliability. I have read every post on HGH for as long as I can remember. At what rate of return do you all see it as a buy? 12%? 15?

Experts have already given back up truck levels ...$ 1.53 or around ...For W69 ...its $ 1.60 ...IMO $ 1.75 is good enough ....lol

[SCOTTY]

HGH looking better today finishing @$1.89. More importantly the VWAP was $1.9025 with 521,370 shares traded for $991,882. Not many sellers left at close.

[alokdhir]

Yes ...last two days it has done well ...Not sure it has bottomed out or just bouncing in relief of relentless selling from 2.10 to 1.80 ...

But looks it has found some support here ...how long ? ....Only God knows ....

[alokdhir]

HGH still have some legs ...seeing depth ..getting better not worse ...

W69 will know better ...if good news coming as its almost year end for them ...though no upgrade or downgrade happened so far ...not much time left to let us know

Otherwise they just meeting old guidance and maybe 7.5 Cents divvy ...next year guidance will be worth watching ...100Mil or conservative 98 ??

[mike2020]

Yeah maybe 8+ cents div with nothing but a sound future to talk about. Very depressing, where is my $1.53 I was led to expect?

[Beagle]

Early days in this recession. Lets see how things go...

[winner69]

For what's it worth here's the link to that report on NZ banks the media mentions when sort of saying banks make excessively high records profits.

Report sort of meaningful re Heartland but remember that they are a de facto bank …..really a finance company.

Yes it shows Heartlands high NIM (relative to others) but this is offset by a significantly higher debt provisioning ratio ....reflection of lending.

https://assets.kpmg/content/dam/kpmg/nz/pdf/2022/06/fips-quarterly-march-2022.pdf

[percy]

For what's it worth here's the link to that report on NZ banks the media mentions when sort of saying banks make excessively high records profits.

Report sort of meaningful re Heartland but remember that they are a de facto bank …..really a finance company.

Yes it shows Heartlands high NIM (relative to others) but this is offset by a significantly higher debt provisioning ratio ....reflection of lending.

https://assets.kpmg/content/dam/kpmg/nz/pdf/2022/06/fips-quarterly-march-2022.pdf

Thanks for the link.
Always an interesting read.

[winner69]

A little bit of history of reverse mortgages in NZ …….murders and everything …from Chris Lee


His involvement in establishing the concept of reverse mortgages illustrates this.
The Moses family had a weekend bach in Raumati South beside the Thomas family (Gene and Eugene) who had established the last-resort lender, Invincible Assurance, itself some version of an insurance company.

The Moses and Thomas families hatched up the idea of marketing reverse mortgages in New Zealand. Given there was no competition the interest on these early-day mortgages was often nearer 20% than 10%.

Invincible Assurance, owned by the Thomas family, would provide the funding. Moses would do the selling.

Of course this plan barely had started before the two Thomas men, father and son, were shot dead in their office on The Terrace in Wellington, an event unlikely to be unrelated to the sector of the moneylending market in which they operated.

Later the banks picked up the reverse mortgage idea and today Heartland Bank dominates this market, lending at a credible interest rate, and enduring almost zero bad debts.

The idea is now mainstream.

The Moses belief that exam papers could give credibility to unit trust salesmen had a shorter life. Academia never could replace knowledge, experience, and integrity.

Nor was he successful when Moses recruited completely untrained and unsuitable people in his Reeves Moses Hudig selling brand, 20 years ago.

Like Money Managers and Vestar his brand became known as high on selling, low on knowledge. His recruits have mostly dropped off, none, that I can recall, ever achieving capital market respect.

For all his failures Moses, like (Somers) Edgar and Syms, contributed to the ultimate decision to license advisers, and regulate them, their model being so dangerous that the then Commerce Minister Simon Power had to react, after years of ugly, lazy selling practices.

That has been a sane outcome. Moses has a tangential responsibility for the change for the better.
The behaviour of businesses like his undoubtedly had cost investors hundreds of millions, but the outcome has been that these failures led to improvements for which all investors should be grateful.

Moses was a mover and shaker in a sector that needed shaking.

https://www.chrislee.co.nz/taking-stock

[Habits]

Theres a blast from the past, radio host and investment advisor Doug Somers-Edgar. Wonder where he is now

[dubya]

Theres a blast from the past, radio host and investment advisor Doug Somers-Edgar. Wonder where he is now
Last I heard he was (semi?) retired and living in a stunning sea side cliff top mansion at Browns Bay, Auckland.

[Habits]

Last I heard he was (semi?) retired and living in a stunning sea side cliff top mansion at Browns Bay, Auckland.

Not surprising, he had a sharp mind and gifted tongue. Though made the mistake of selling out of his rentals late 80s early 90s which was about the time we started buying. His words of "the only problem with rentals are the tenants" still ring. I checked google, it looks like he got caught up in the GFC meltdown

[sb9]

Finally into $2s, will it hold and keep above the range...

[alokdhir]

Finally into $2s, will it hold and keep above the range...

Its in anticipation of little above guided results and good dividend ...I think till its cum dividend it can run up till $ 2.20 if overall markets hold up

[winner69]

Global Dairy Trade prices down 4% overnight auction

Bit like HGH share price a bit lower than a few months ago but hanging in there

As far as dairy goes collapsing NZD softens the blow

[percy]

https://www.google.com/url?client=internal-element-cse&cx=006730714154542492986:oh6vl0ybuqy&q=https://www.stuff.co.nz/life-style/homed/retirement/128310127/the-number-one-reason-over65s-take-out-reverse-mortgages&sa=U&ved=2ahUKEwiMxrjBue_4AhWH3nMBHezWD_AQFnoECAkQAg&usg=AOvVaw3kK_Ag7TPIgcOE7N7ruEzo

[BlackPeter]

https://www.google.com/url?client=internal-element-cse&cx=006730714154542492986:oh6vl0ybuqy&q=https://www.stuff.co.nz/life-style/homed/retirement/128310127/the-number-one-reason-over65s-take-out-reverse-mortgages&sa=U&ved=2ahUKEwiMxrjBue_4AhWH3nMBHezWD_AQFnoECAkQAg&usg=AOvVaw3kK_Ag7TPIgcOE7N7ruEzo

I guess its a sad state when people take a reverse mortgage to repay their credit card bill ... but hey, all good for Heartland.

I recon the number of new potential customers for them is nearly unlimited in times when generations learned to operate under "buy now and pay later".

Clearly - whoever bought this expensive holiday and the big SUV in the driveway on the card needs now to take it on the house ...

[stoploss]

I guess its a sad state when people take a reverse mortgage to repay their credit card bill ... but hey, all good for Heartland.

I recon the number of new potential customers for them is nearly unlimited in times when generations learned to operate under "buy now and pay later".

Clearly - whoever bought this expensive holiday and the big SUV in the driveway on the card needs now to take it on the house ...

One difference BP will be the "BNPL' crowd will not be able to save a deposit for the house.
The existing homeowner did , so let them borrow some of the equity to make their life a little more comfortable .
No point of being the richest person in the cemetery

[Rawz]

https://www.google.com/url?client=internal-element-cse&cx=006730714154542492986:oh6vl0ybuqy&q=https://www.stuff.co.nz/life-style/homed/retirement/128310127/the-number-one-reason-over65s-take-out-reverse-mortgages&sa=U&ved=2ahUKEwiMxrjBue_4AhWH3nMBHezWD_AQFnoECAkQAg&usg=AOvVaw3kK_Ag7TPIgcOE7N7ruEzo

thanks for posting Percy. that graph in the article is pretty cool. Makes sense if house prices keep going up lol

A lot of my parents friends are selling their auckland homes and moving to Whitianga or Whangamata. Thats a good option as well. Sell up your central Auckland suburb house, buy in a relaxed good vibes town, away from the big smoke and bank $1m cash while you are at it. Just hope the kids and grandkids visit lol

[Ggcc]

One difference BP will be the "BNPL' crowd will not be able to save a deposit for the house.
The existing homeowner did , so let them borrow some of the equity to make their life a little more comfortable .
No point of being the richest person in the cemetery

“Financially richest in the cemetery”. Some people feel rich and own nothing and are sometimes the happiest people I have ever met and most down to earth

[sb9]

Hello, what's happening on bid side...:D

[Bjauck]

One difference BP will be the "BNPL' crowd will not be able to save a deposit for the house.
The existing homeowner did , so let them borrow some of the equity to make their life a little more comfortable .
No point of being the richest person in the cemetery Surely everybody who buys a house with a mortgage is part of the BNPL crowd. And how many of those who buy with a deposit and mortgage had part of the deposit funded by family? The NZ real estate market is based on a BNPL foundation and a cosseted fiscal environment.

[winner69]

Hello, what's happening on bid side...:D

Upgrade on the way .... next week maybe

[Ggcc]

Upgrade on the way .... next week maybe
Or capital raise for their Aussie purchase

[alokdhir]

Upgrade should have come just before year end ...which it didnt so most likely capital raise possibility ...doesnt matter ...SP will get boosted by both

$ 2.20 I reckon before or just after results

[mike2020]

Up a couple of pips and the theories abound. Reminds me of OCA a few months ago.

[winner69]

Upgrade on the way .... next week maybe

Bugger ….forgot Jeff doesn’t do guidance upgrades - npat will be about $96m - anything above that will be put in bottom drawer for next year

Doubt whether they’ll need to raise any new capital for that forthcoming acquisition ….unless there’s something else coming up

Fridays action probably a few excited alokdhir types buying ‘cheap’ ….although ‘cheap’ is rather subjective and that can mean ‘expensive’ is ‘cheap’

[percy]

Bugger ….forgot Jeff doesn’t do guidance upgrades - npat will be about $96m - anything above that will be put in bottom drawer for next year

Doubt whether they’ll need to raise any new capital for that forthcoming acquisition ….unless there’s something else coming up

Fridays action probably a few excited alokdhir types buying ‘cheap’ ….although ‘cheap’ is rather subjective and that can mean ‘expensive’ is ‘cheap’

Yes Jeff always does achieve what he said he would do.So there will be no surprises here.
However profit will again be driven by RELs,while motor lending will be down a little.
With Chris Flood joining Jeff looking for growth in Aussie the future looks positive.
We have the number of shares we want so neither a buyer or seller.

[Waltzing]

HGH better hope that block chain does not take over finance and that still looks doubtful thank goodness.

[Rawz]

HGH cap raise $100m to buy out the rest of the HMY shares they don’t own?

Then sell it for $400m 3 years later?

Makes sense

[percy]

HGH cap raise $100m to buy out the rest of the HMY shares they don’t own?

Then sell it for $400m 3 years later?

Makes sense

Why spend capital.?
Better to offer a scrip deal,one HGH share for every two point five HMY.

[clearasmud]

Why spend capital.?
Better to offer a scrip deal,one HGH share for every two point five HMY.

All the punters who paid $3.50 will love that.

[winner69]

So ANZ acquire Suncorp Bank at 1.3 times NTA

Jeez - same multiple applied to Heartland would mean $1.52

Just as well Heartland Group isn't just a bank

[Rawz]

So NZ acquire Suncorp Bank at 1.3 times NTA

Jeez - same multiple applied to Heartland would mean $1.52

Just as well Heartland Group isn't just a bank

HGH overpriced! Who’s buying at these levels!? Don’t they know there’s a huge recession coming..?

[Waltzing]

big lolly scramble by a desperate govnt will sort out any recession...

[mike2020]

Historically speaking you might be right, they do like to burn all the available cash on the way out making the Nats into villains for the following harsh reality. NZ public love a good drama.

[peat]

So ANZ acquire Suncorp Bank at 1.3 times NTA

Jeez - same multiple applied to Heartland would mean $1.52

Just as well Heartland Group isn't just a bank
but the PE paid is higher than HGH's

[IAK]

Historically speaking you might be right, they do like to burn all the available cash on the way out making the Nats into villains for the following harsh reality. NZ public love a good drama.
Think Big!

[mike2020]

Still powering the nation today. Plus the alpine salmon are a welcome bonus.

[percy]

https://www.scoop.co.nz/stories/BU2207/S00259/heartland-bank-wins-canstars-savings-bank-of-the-year-award-for-the-fifth-year-running.htm

[alokdhir]

Is HGH reliable dividend payer in recessionary times ? Can they maintain current yield ? If yes then great buy still if doubtful then ....

If invested for divvy then short term SP trends should not matter as eventually we will come out of this and time will be rosier again with rates falling back to neutral or lower and economy booming in 18-24 months max and HGH SP then can recover all lost ground and some more .

Even if SP of $ 1.60 on cards before $ 2.60 doesn't matter if it keeps paying 13-14 cents a year !!! Experts opinion again ...Can they ?

[Rawz]

Maybe RBNZ come to HGH rescue and restrict dividends?

Did HGH catch up the dividends from the COVID restriction? Or did they hold onto them?

HGH pay too much dividends anyway

[winner69]

Hello, what's happening on bid side...:D

Last Friday that was .... just the start of a big run up of the share price

Cool stuff

Share price was a lot higher a few months ago .... just getting back there before Jeff tells us FY23 will be -- probably something over $110m

[Old mate]

Even with the gobal milk prices down again overnight winner:t_up::t_up:

[pierre]

Last Friday that was .... just the start of a big run up of the share price

Cool stuff

Share price was a lot higher a few months ago .... just getting back there before Jeff tells us FY23 will be -- probably something over $110m

Yep - and I'm picking this year's final dividend payable mid-September will be 7.5 cents making 13c for the year.

[winner69]

Even with the gobal milk prices down again overnight winner:t_up::t_up:

There's always a few months lag one way or the other ....... dairy likely to go up soon

[Old mate]

Wonder if the harmoney results and some of the us bank results pushing it along a bit.

[winner69]

Yep - and I'm picking this year's final dividend payable mid-September will be 7.5 cents making 13c for the year.

Wish they wouldn’t pay high dividends ….payout ratio too high

[pierre]

Wish they wouldn’t pay high dividends ….payout ratio too high

Too high for what reason?

[percy]

Wish they wouldn’t pay high dividends ….payout ratio too high

Think Jeff would agree with you,however the large uptake of shareholders electing DRP cushions the blow.

[alokdhir]

Hope W69 didnt sell out his big holdings in the afternoon on Mr B's advise ...lol

Seems FMD scare didnt help it go towards $ 2.20 but maybe soon

[alokdhir]

NZX enquiry comes as HGH ran too fast ...lol

Hope they know it went down because of HMY and ran up due to release of positive news about HMY !!!

Simple explanation and thinly traded on way up till yesterday as no sellers as big Divvy coming

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HGH/395684/375058.pdf

[winner69]

NZX enquiry comes as HGH ran too fast ...lol

Hope they know it went down because of HMY and ran up due to release of positive news about HMY !!!

Simple explanation and thinly traded on way up till yesterday as no sellers as big Divvy coming

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HGH/395684/375058.pdf

How stupid by NZX

Probably made Jeff's day ..... still laughing his head off I'd say

I'd say Harmoney share price has nothing to do with movements in HGH share price - if it does there's a lot of dumb punters out there

[alokdhir]

How stupid by NZX

Probably made Jeff's day ..... still laughing his head off I'd say

I'd say Harmoney share price has nothing to do with movements in HGH share price - if it does there's a lot of dumb punters out there

But it helps us ...as now HGH clarified in writing no up or down grades so results almost known ...Divvy most likely 7.5 cents .

Only thing left to know which is most important ...what is next year guidance mid point ...106 maybe

[Joshuatree]

How stupid by NZX

Probably made Jeff's day ..... still laughing his head off I'd say

I'd say Harmoney share price has nothing to do with movements in HGH share price - if it does there's a lot of dumb punters out there

Sure made my day.Speeding ticket ,as rare as rocking horse droppings ehh:).Sure has been a nice lift back.

[bigbruce]

Where on earth is Harmon Wilfred?

https://www.nzherald.co.nz/nz/overstayer-cant-be-found-as-bankers-seek-to-serve-a-1m-bankruptcy-notice-on-his-wife/A5TUYIGADONU4YG6JCTY6DVORI/

[blackie]

newbie question
how come at near closing when share price is $2.04, depth chart shows sell prices down to $1.95?
from ASB securities




Last
Change
Buy
Sell
Open
High
Low
VWAP
Volume
Turnover



$2.040
https://online.asb.co.nz/ost/Content/Style/Images/arrow-down-red_transparent.png6* 2.9%
$2.200
$1.950
$2.100
$2.100
$2.030
$2.072
119,529
$247,663







Buyers

Buy Quantity

Prices



1
1,034
$2.200


1
548
$2.180


1
1,264
$2.140


1
7
$2.090


2
6,842
$2.030


3
6,971
$2.020


5
5,272
$2.010


14
32,161
$2.000


3
17,250
$1.990


3
20,627
$1.980


34
91,976






Prices

Sell Quantity

Sellers



$1.950
13,162
1


$1.980
4,000
1


$1.990
3,096
5


$2.020
8,630
1


$2.030
444
2


$2.050
94,408
4


$2.130
3,527
1


$2.140
4,673
2


$2.150
18,354
2


$2.160
23,584
2



173,878
21

[winner69]

Blackie ….all to do with Opening and Closing Auctions

This might help

https://www.nzx.com/investing/nzx-trading-hours/anatomy-of-a-trading-day

[blackie]

thanks winner, very helpful

[Old mate]

Gobal dairy prices down 5% overnight. Falls at last 4 auctions .

[winner69]

Gobal dairy prices down 5% overnight. Falls at last 4 auctions .

Thats not good news really ….whole milk powder down 6%

Sort of signals a weaker economy on way ….papers say a recession

Jeff keeps saying Heartlands fortunes depends on economic growth and employment. But employment OK

Maybe Jeff might say something all this when he announces full year result soon.

[Rawz]

HGH running at its peak right now! Great stuff

[Rawz]

HGH running at its peak right now! Great stuff

Not sure how far down this peak thou?
But the climb of the next peak is going to be even higher than the last one!

[winner69]

Seems Jenny Ruth not that all impressed with Heartland’s disclosure around its relationship / dealings with Harmoney

https://businessdesk.co.nz/article/opinion/heartlands-key-partnership-with-harmoney-effectively-ended-in-2020
Prob paywalled

[Muse]

Seems Jenny Ruth not that all impressed with Heartland’s disclosure around its relationship / dealings with Harmoney

https://businessdesk.co.nz/article/opinion/heartlands-key-partnership-with-harmoney-effectively-ended-in-2020
Prob paywalled

article is about heartland not disclosing it wasn't still providing new funds for new lending through HMY, and their lending through them is in run off, which jarden noted in a research report a few days ago. probably fair, as HGH never came out and said they weren't successful in providing new warehouse facilities to HMY (as was their stated goal) as part of the later's transition away from p2p lending. While heartland never came out and said it in a AR or presso, they did pretty much disclose it during analyst calls, and investors were free to easily infer it from HGH's numbers. My posts #15442 & #15510 said as much well before the jarden report dropped 2 days ago. Pleased the p2p being closed off. It will be interesting if HGH ever look to provide a warehouse facility to HMY in the future, though I doubt it, given the new NZ warehouse went to a big 4 competitor, and if there was one HGH was ever going to provide, it was that one.

but boy, that jarden report was fantastic. was one of the better research reports I've read in some time. and did a very good job at illustrating that those who continue to softly rib over dairy prices are looking at completely the wrong area if they want to find emerging risk in heartland's portfolio. While jarden don't say it I see that one wee area has emerged, but as a whole, the aggregate credit mix of receivables has & continues to improve.

[Old mate]

Any links to the report fm or is it jarden paywalled? Thanks

[clearasmud]

[QUOTE While jarden don't say it I see that one wee area has emerged, but as a whole, the aggregate credit mix of receivables has & continues to improve.[/QUOTE]

Spell it out, what that one wee area, thanks

[Rawz]

its a big endorsement for HMY that a big 4 is willing to price HGH out of that space to take the warehouse facility.

All good for HGH- they will benefit as a 8.4% shareholder of HMY

[winner69]

its a big endorsement for HMY that a big 4 is willing to price HGH out of that space to take the warehouse facility.

All good for HGH- they will benefit as a 8.4% shareholder of HMY

When they topped up a year ago it took them to 10.1%

Even if they been selling since still over 9.1%

[Rawz]

When they topped up a year ago it took them to 10.1%

Even if they been selling since still over 9.1%

The companies office says they have 8,518,864 of 10,1018,964

Two plus two is four
Minus one that's three, quick maths

So 8.4% ?

Does aussie listing change it?

[winner69]

The companies office says they have 8,518,864 of 10,1018,964

Two plus two is four
Minus one that's three, quick maths

So 8.4% ?

Does aussie listing change it?

That Extensive Shareholding List is a load of crap. Hope the data scientists didn't produce it lol

The 8,518,864 was the number Heartland had at IPO ... bought more last year .... remember

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HMY/375261/349855.pdf

[Rawz]

That Extensive Shareholding List is a load of crap. Hope the data scientists didn't produce it lol

The 8,518,864 was the number Heartland had at IPO ... bought more last year .... remember

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HMY/375261/349855.pdf

Lol oh dear

[alokdhir]

W69 ...why punters are not getting excited about the forthcoming results and big dividend ?

Anything sinister on the cards ?

Very steady supply keeps coming around $ 2.10 ...not letting it cross

Enlighten us please

[winner69]

W69 ...why punters are not getting excited about the forthcoming results and big dividend ?

Anything sinister on the cards ?

Very steady supply keeps coming around $ 2.10 ...not letting it cross

Enlighten us please

No surprises about profit - it'll be headlined around that $96m but there could be some 'normalising but don't worry about that. And no doubt an increased dividend (bad)


I think Heartland share price is fairly valued at the moment - even though some might say more than fairly valued. Price Book chart below (with estimated BV for June). Over the last year P/B ratios have declined so bear that in mind

Amazing what popular in the brokers picks thing did to the share price in Dec/Jan eh - never really was worth that 260 was it.

So come announcement maybe a bit of enthusiasm ... should pop by what the divie is but will drift back to 210/220 again (if we're lucky)

What do you reckon will happen

[alokdhir]

No surprises about profit - it'll be headlined around that $96m but there could be some 'normalising but don't worry about that. And no doubt an increased dividend (bad)


I think Heartland share price is fairly valued at the moment - even though some might say more than fairly valued. Price Book chart below (with estimated BV for June). Over the last year P/B ratios have declined so bear that in mind

Amazing what popular in the brokers picks thing did to the share price in Dec/Jan eh - never really was worth that 260 was it.

So come announcement maybe a bit of enthusiasm ... should pop by what the divie is but will drift back to 210/220 again (if we're lucky)

What do you reckon will happen

Thanks for your very valuable insights ...U r the expert of HGH imo so I think what u say will happen

If the next year guidance is around 105 Mil then we may get some small pop till 2.30 maybe before going ex !!

But with difficult trading conditions on horizon ...I dont think they will stick their neck out that long ...lol

[winner69]

Thanks for your very valuable insights ...U r the expert of HGH imo so I think what u say will happen

If the next year guidance is around 105 Mil then we may get some small pop till 2.30 maybe before going ex !!

But with difficult trading conditions on horizon ...I dont think they will stick their neck out that long ...lol

Be a bad sign if Jeff didn't give any guidance for F23 .... might stretch it to $103m.

[Rawz]

No surprises about profit - it'll be headlined around that $96m but there could be some 'normalising but don't worry about that. And no doubt an increased dividend (bad)


I think Heartland share price is fairly valued at the moment - even though some might say more than fairly valued. Price Book chart below (with estimated BV for June). Over the last year P/B ratios have declined so bear that in mind

Amazing what popular in the brokers picks thing did to the share price in Dec/Jan eh - never really was worth that 260 was it.

So come announcement maybe a bit of enthusiasm ... should pop by what the divie is but will drift back to 210/220 again (if we're lucky)

What do you reckon will happen

thanks for your post and chart. awesome post

[winner69]

Pretty impressive chart below

Maybe Jeff extends the line for another year and says 'hey guys, that's our guidance for next year'

If that's the case F23 guidance will be $102m ...... but any capital raise would stuff that up

Jack Welch at GE was the master of earnings smoothing ...... quarter after quarter after quarter - never any boom quarters nor any bad quarters, just nice smoothed earnings. Maybe Jack is Jeff's hero

All turned to custard when Jack left but a fascinating study

[alokdhir]

Be a bad sign if Jeff didn't give any guidance for F23 .... might stretch it to $103m.

Even $ 103 m is 6% growth ...keep in mind they have an accretive acquisition too for next fiscal ...still $ 103m will give it enough legs for $ 220 +

[winner69]

Even $ 103 m is 6% growth ...keep in mind they have an accretive acquisition too for next fiscal ...still $ 103m will give it enough legs for $ 220 +

You’d hope that acquisition is accretive ….otherwise it’ll be running at a loss eh

Big picture need to remember that if npat is +6% eps growth will be slightly less

[alokdhir]

You’d hope that acquisition is accretive ….otherwise it’ll be running at a loss eh

Big picture need to remember that if npat is +6% eps growth will be slightly less

I still remember U and Mr B calculating the acquisition to be 1 cent eps accretive ...How did u forget it so fast mate ? :D

[kiora]

DATA TABLE FOR PERFORMANCE RATIOS
https://bankdashboard.rbnz.govt.nz/profitability

[winner69]

DATA TABLE FOR PERFORMANCE RATIOS
https://bankdashboard.rbnz.govt.nz/profitability

Question

Why doesn't the much lauded Heartland NIM (4.3 v big 4 at 2.1/2.2) lead into a superior ROE v the big four

Table shows they underperform quite badly on this measure

[Rawz]

Question

Why doesn't the much lauded Heartland NIM (4.3 v big 4 at 2.1/2.2) lead into a superior ROE v the big four

Table shows they underperform quite badly on this measure

I give up master winner

Why are the banks so much more efficient in generating profits off their net assets?? Even though they have lower NIM

[Ggcc]

I give up master winner

Why are the banks so much more efficient in generating profits off their net assets?? Even though they have lower NIM
Currently for HGH Reverse equity loans

[alokdhir]

Indicative rates as per HGH reverse mortgage brochure is 7.5 % ...thats creaming rates ...maybe as they have monopoly ?

[Muse]

Question

Why doesn't the much lauded Heartland NIM (4.3 v big 4 at 2.1/2.2) lead into a superior ROE v the big four

Table shows they underperform quite badly on this measure

Interesting question.

My gut reaction without taking the time to check my notes

NIM only part of the equation: net lending margin (NIM after credit losses) is the absolute most important metric in a financial institution. More risky firms achieve higher NIMs to attempt to compensate for the incremental risk they take. Given the origins of heartland as an aggregation of non bank lenders/societies and only securing registered bank status in 10 years ago, it wouldn't be surprising if they had higher credit losses than the big 4, though the relative credit quality of lending continues to improve yoy. The higher ICLs and future provisions translate into lower NLMs.

The other possibility (or combination with the above) is from scale. Heartland might have better NIMs and/or NLMs, but operating costs as a % of income or average book could be higher. I'd need to check my notes. Very possible to have high NIM/NLM but if you aren't at scale or have disproportionately high operating costs it doesn't flow to the bottom, which translates into ROE. There are benchmarks for all that but I can't recall it offhand.

Final impression is that I guess all those metrics are for the licensed subsidiary operations only. IE, ANZ new zealand not the the consolidated group operations. Heartland does have superior consolidated group returns on equity than almost all the australasian banks (bar CBA) for FY22 forecast. This implies that the far larger australian operations of the big banks are substantially less profitable than in NZ, and the sheer weight of the aussie operations drag down the reported group ROEs. So while HGH as a consolidated group might generate superior ROEs than the consolidated operations of the big aussie banks, and be rewarded by trading at higher price to books as a result, the aussie subsidiaries actually operate more efficiently than heartland bank NZ itself.

another final possibility is the composition of how receivables are funded. Up to a certain point, the higher the leverage the better the ROE. But I dont think that is the case as the big 4 all have strong core capital ratios, so its likely one or a combination of the above.

will check my notes and revert later when not being terrorised by small humans.

[kiora]

https://www.interest.co.nz/saving/bank-leverage
And this
https://www.interest.co.nz/saving/bank-financial-comparator

[dreamcatcher]

Increasing mortgage debt for over 65's with rising number of retiring people turning to reverse mortgages to pay off their home loans

https://www.stuff.co.nz/business/129518767/frightening-increase-in-mortgage-debt-among-over65s

[Rawz]

Interesting question.

My gut reaction without taking the time to check my notes

NIM only part of the equation: net lending margin (NIM after credit losses) is the absolute most important metric in a financial institution. More risky firms achieve higher NIMs to attempt to compensate for the incremental risk they take. Given the origins of heartland as an aggregation of non bank lenders/societies and only securing registered bank status in 10 years ago, it wouldn't be surprising if they had higher credit losses than the big 4, though the relative credit quality of lending continues to improve yoy. The higher ICLs and future provisions translate into lower NLMs.

The other possibility (or combination with the above) is from scale. Heartland might have better NIMs and/or NLMs, but operating costs as a % of income or average book could be higher. I'd need to check my notes. Very possible to have high NIM/NLM but if you aren't at scale or have disproportionately high operating costs it doesn't flow to the bottom, which translates into ROE. There are benchmarks for all that but I can't recall it offhand.

Final impression is that I guess all those metrics are for the licensed subsidiary operations only. IE, ANZ new zealand not the the consolidated group operations. Heartland does have superior consolidated group returns on equity than almost all the australasian banks (bar CBA) for FY22 forecast. This implies that the far larger australian operations of the big banks are substantially less profitable than in NZ, and the sheer weight of the aussie operations drag down the reported group ROEs. So while HGH as a consolidated group might generate superior ROEs than the consolidated operations of the big aussie banks, and be rewarded by trading at higher price to books as a result, the aussie subsidiaries actually operate more efficiently than heartland bank NZ itself.

another final possibility is the composition of how receivables are funded. Up to a certain point, the higher the leverage the better the ROE. But I dont think that is the case as the big 4 all have strong core capital ratios, so its likely one or a combination of the above.

will check my notes and revert later when not being terrorised by small humans.

Thanks for your post FM, i think all your points are on the money

[winner69]

Hope Heartland does better than ASB

ASB Bank lifted its annual net profit by 11% as it benefited from higher margins as interest rates rose and income grew faster than costs.

[alokdhir]

Pre result day SP languishing with persistent seller even below yesterday's price ....

Maybe someone not very impressed with the results preview ...lol

Cant be anything wrong ...our experts here and even great Jarden has full confidence in their dear Jeff ....But Forbars is a different story

Fingers crossed ...97M and 7.5 Cents divvy is my humble expectations ...FY23 ...105 m please

[Bjauck]

Pre result day SP languishing with persistent seller even below yesterday's price ....

Maybe someone not very impressed with the results preview ...lol

Cant be anything wrong ...our experts here and even great Jarden has full confidence in their dear Jeff ....But Forbars is a different story

Fingers crossed ...97M and 7.5 Cents divvy is my humble expectations ...FY23 ...105 m please Maybe the change of ownership in Kiwibank has rattled some sellers. Perhaps Kiwibank will not be under the same pressure to maintain profit margins?

[DonkeyKong]

Pre result day SP languishing with persistent seller even below yesterday's price ....

Maybe someone not very impressed with the results preview ...lol

Cant be anything wrong ...our experts here and even great Jarden has full confidence in their dear Jeff ....But Forbars is a different story

Fingers crossed ...97M and 7.5 Cents divvy is my humble expectations ...FY23 ...105 m please

What did Jarden and Forbars say?

[alokdhir]

What did Jarden and Forbars say?

HGH is Jarden's brokers pick while Forbar says it will underperform with target and fair value of $ 1.85

Our expert thinks HGH is fairly valued at currently available data ...but that can change tomorrow

Normally HGH makes its biggest move after next years guidance in August as it adjusts to next year EPS .

So fingers crossed ...though divvy will support but next year outlook is more important for bigger SP move

[RTM]

https://www.nzx.com/announcements/397405

Trading halt

[alokdhir]

Placement of new shares ...W69 mentioned it ....was not happy with this outcome

Now we know why someone was a continuous supplier at 2.15 from last many days

[winner69]

Placement of new shares ...W69 mentioned it ....was not happy with this outcome

Now we know why someone was a continuous supplier at 2.15 from last many days

Might even get some at $1.70 odd

[RTM]

Might even get some at $1.70 odd

Don't really want or need any more.
Seems odd to be taking money in with a placement...while handing it out with a dividend.
Is the dividend at risk I wonder ?

[alokdhir]

Might even get some at $1.70 odd

Doing private placement on the day of results !!!

Dont know why u think $ 1.70 ...maybe a good deal ....doing now so they get divvy also !!!!

U had such praise for Jeff ...so he must be investor friendly ...can be a good deal from investor angle ...cheap rights ?

[winner69]

Doing private placement on the day of results !!!

Dont know why u think $ 1.70 ...maybe a good deal ....doing now so they get divvy also !!!!

The weird and wondrous world of high finance mate .... things happen

[alokdhir]

Heartland expects NPAT for FY2023 to be in the range of $109 million to $114 million, excluding any impacts of fair value changes on equity investments held.

This will be on increased equity so next year eps growth will be ....??? Maybe 17.5 cents ...W69 please help us

[winner69]

Love the way Jeff recycles things through his bottom drawer

Even a A$13m writedown in Harmoney shares soesn't impact the bottom line .... like take a few things out and put a few things in and hey presto you report $95.1m profit or $96.1m if you are normal

What was F22 guidance again

[alokdhir]

Love the way Jeff recycles things through his bottom drawer

Even a A$13m writedown in Harmoney shares soesn't impact the bottom line .... like take a few things out and put a few things in and hey presto you report $95.1m profit or $96.1m if you are normal

What was F22 guidance again

$ 1.80 is the offer ...we can also get upto a limit of 50k ...but can try for more

[sb9]

Love the way Jeff recycles things through his bottom drawer

Even a A$13m writedown in Harmoney shares soesn't impact the bottom line .... like take a few things out and put a few things in and hey presto you report $95.1m profit or $96.1m if you are normal

What was F22 guidance again

Guidance was in the range of $93m to $96m, so bang on the dot...

[LaserEyeKiwi]

Heartland expects NPAT for FY2023 to be in the range of $109 million to $114 million, excluding any impacts of fair value changes on equity investments held.

This will be on increased equity so next year eps growth will be ....??? Maybe 17.5 cents ...W69 please help us

but they are issuing somewhere around 111 million new shares, so share count goes from ~589m -> ~700m, meaning EPS will be impacted substantially as net income is divided by 19% more shares on issue.

Guidance at high end would be 16.3c EPS with 700m shares outstanding (essentially flat on this year)

[RTM]

$ 1.80 is the offer ...we can also get upto a limit of 50k ...but can try for more

DIvidend down a bit....this could dampen enthusiasm....share price might drop to around this ?
When will the trading halt finish ?
Lot to read

[winner69]

Guidance FY23 109m to 114m tremendous up

But EPS could go backwards

[Muse]

Guidance FY23 109m to 114m tremendous up

But EPS could go backwards

Gotta back out /do a proforma for stockco to see how the underlying business is growing. Would have been nice to have fully funded this with corporate debt, rather than a bridge to be repaid by equity. Sensible I guess.

[LaserEyeKiwi]

Gotta back out stockco (A10-12m) to see how the underlying business is growing. Would have been nice to have fully funded this with corporate debt, rather than a bridge to be repaid by equity. Sensible I guess.

Reminds me of the NZX equity raise to fund their acquisition earlier this year. That was a clusterf@!K for shareholder value.

[Gerald]

Never seems to produce any cash despite all the big profits. Wonder how many years till the next raise?

[Muse]

article on the result and the plethora of initiatives particular in AU on interest.co.nz

https://www.interest.co.nz/banking/117291/heartland-group-holdings-sees-net-profits-rise-93-full-year-capital-raising-repay

[newtrader]

There is a lot of information to process. Considering whether it is beneficial to participate in the placement over the SPP. The SPP has the upside of potentially getting a price lower than the placement price of 1.80 but the allocation might be smaller. 130m in placement and 70m in SPP.

What does this mean?

From page 12 and 13 of the annoucement
(http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HGH/397408/377166.pdf)
Heartland is also utilising its placement
capacity to increase the ability of shareholders to participate in the SPP the maximum amount possible
under the NZX Listing Rules for a SPP without utilising placement capacity, being 5% of shares on issue and
$15,000 per applicant. The SPP provides to participants the benefit of a downside pricing mechanism which
is not available in pro rata structures.

[BlackPeter]

Cool picture of a stingray in their company presentation (page 35). Given that it is the introduction to the outlook section - Do stingrays really bring luck :scared:?

[beetills]

AVENUE Bank appears to be a miniture Heartland.
IMO becoming a Bank in Aus is a good move.

[winner69]

Heading towards being an Aussie company with some small NZ subsidiaries

Wonder if Jeff likes living in Melbourne or Sydney

[winner69]

AVENUE Bank appears to be a miniture Heartland.
IMO becoming a Bank in Aus is a good move.

More so if that Aus bank 'owns' a NZ bank (Heartland Bank)

[winner69]

Never seems to produce any cash despite all the big profits. Wonder how many years till the next raise?

We need to get our mate Snoopy to update his workings on the 'cash flow' impacts of reverse mortgages (like receiving no cash until people die or move on)

It was a good piece of work and signaled the need for regular capital raises

[winner69]

Reminds me of the NZX equity raise to fund their acquisition earlier this year. That was a clusterf@!K for shareholder value.

Agree LEK - as soon as you see them say Heartland elected this offer structure due to the volatile market conditions to date in 2022, and its objective to further diversify its share register to promote increased liquidity on both the NZX and ASX. you know they don't really care about the interests of the 'smaller' shareholders

No worries though .... Greg can buy as many as he as to to keep his 9.8% holding .....that's further diversifying the share register and promoting increased liquidity eh

[Balance]

We need to get our mate Snoopy to update his workings on the 'cash flow' impacts of reverse mortgages (like receiving no cash until people die or move on)

It was a good piece of work and signaled the need for regular capital raises

Very inefficient way of finding growth - pay out dividends (28% tax imputation) and then, raising capital to replace the dividend paid!?

Guess it’s the reality of being a dividend yielding stock - need to keep faith with the masses.

[winner69]

That $16.7 million gain in relation to derivatives was an added bonus

Saved the day didn't it

[Snow Leopard]

That $16.7 million gain in relation to derivatives was an added bonus

Saved the day didn't it

Jeff always has something handy to keep the results trajectory on track.
Overlays seem to be the in thing going forward

[davflaws]

Cool picture of a stingray in their company presentation (page 35). Given that it is the introduction to the outlook section - Do stingrays really bring luck :scared:?

Crikey yes! - unless your name is Steve.

[whatsup]

Don't really want or need any more.
Seems odd to be taking money in with a placement...while handing it out with a dividend.
Is the dividend at risk I wonder ?

In the BIL days S Hers used to fund their own dividends via a cash or bonus issue !! , eventually crashing the company !

[mike2020]

And he went on to gain a knighthood and then had it stripped on kiddie porn charges. Do the super successful ever learn? ;)

If StockCo is earnings accretive and the rest of the new capital is put to work then the sp should recover quickly and $1.80 will be seen as a gift. I hope.

[Bjauck]

Regardless of the flannel about wishing to encourage more institutional investors for the sake of liquidity, as I understand it the Placement and SPP at a deep discount is a crock for individual shareholders, who cannot outlay more capital to ensure their holding’s relativity is maintained. In effect the value of their holding has been undermined. A rights issue and bookbuild (as ANZ recently undertook) would have at least given them a share of the premium to the heavily discounted issue price.

[Old mate]

Who's in for the shares? Pretty quick turnaround to make decision. Buying on market after trading halt might get similar results.

[percy]

Regardless of the flannel about wishing to encourage more institutional investors for the sake of liquidity, as I understand it the Placement and SPP at a deep discount is a crock for individual shareholders, who cannot outlay more capital to ensure their holding’s relativity is maintained. In effect the value of their holding has been undermined. A rights issue and bookbuild (as ANZ recently undertook) would have at least given them a share of the premium to the heavily discounted issue price.

I do not like SPPs.
Seems stupid putting up a good deal of capital to get scaled back to 5% to 15% of what I applied for.
Rights issues are the only fair way as per the reasons you pointed out.
HGH have had plenty of time to organise a rights issue..
I have applied for a good number of shares in the placement for both myself and the wife.
See what happens.

[alokdhir]

Simple question for our experts ....Is HGH now a SELL ? If not then whats its fair value at present ? still $ 2.10 or below ?

Next year EPS as per guidance and new equity is 16.3 Cents ...so basically flat !!

[Waltzing]

In the current enivornment that might be considered an OK result.

The AUS banks have the advantage that the economy is just bigger.

And China really needs AUS minerals even if it doesnt need the Wine. But Chinese drinkers do like Aussie Wines which mean the communist party really needs to fight those Wine loving citizens....

Your an Expert now..

Banks will be very busy trying to get control of Risk and meet ever increasing Regs which means technology investments.

Closing branches the only solutions for some?

[RTM]

Simple question for our experts ....Is HGH now a SELL ? If not then whats its fair value at present ? still $ 2.10 or below ?

Next year EPS as per guidance and new equity is 16.3 Cents ...so basically flat !!

I am not going to sell....and I am hoping it will not become a buying opportunity. $1.70 or less.

[alokdhir]

I am not going to sell....and I am hoping it will not become a buying opportunity. $1.70 or less.

They are offering at 1.80 ....discount is for attracting capital in such high rates environment ....why it should go below offer price ?

Also whats the maximum allowed for retail investors ? I dont think anyone will get so much that they can influence the market price

After initial knee jerk downside on opening ...I think it will settle back to around 2.10 levels ...thats my thoughts ...what say others

[RTM]

They are offering at 1.80 ....discount is for attracting capital in such high rates environment ....why it should go below offer price ?

Also whats the maximum allowed for retail investors ? I dont think anyone will get so much that they can influence the market price

After initial knee jerk downside on opening ...I think it will settle back to around 2.10 levels ...thats my thoughts ...what say others

There will be a few scratching their heads about handing out a reduced dividend with one hand....while simultaneously asking for money.

[maclir]

What an annoying way to treat small shareholders. I was extremely busy today so missed the Jarden email. So I guess I have to take a punt on the SPP. Surely a striaght rights issue was the way to go?

[Baa_Baa]

I am not going to sell....and I am hoping it will not become a buying opportunity. $1.70 or less.

When a company values it's own stock at a significant discount to the market price, it's only reasonable that the market follow their lead. For example, if a punter owned stock at the current price but committed to the discounted SPP, it makes sense that they sell now and use that money to fund the new purchase - bingo, instant capital gains. But only a couple of days or you lose your ex-Div. For that and other reasons, it's not surprising when the market re-rates the stock down to the company's lowly SPP valuation.

The whole thing looks a bit desperate, the obscene haste and compressed timeframes, the significant devaluation to market, ambushed on announcement day, waiver of the listing rules (time between announce, divi and cap raise), dilution of shareholders who cannot participate, the method of SPP instead of a rights offer. Something smells, it's just plain not a good look.

[alokdhir]

There will be a few scratching their heads about handing out a reduced dividend with one hand....while simultaneously asking for money.

Yes I agree ...its too complicated and small investor unfriendly ...I thought Jeff was a investor friendly person ...but then I forgot he is a Banker ...lol

Max is $ 50,000 which can be scaled back ...I think cant even apply for more then 50K ...so max u can get is worth 50K ....Price is lower of either 1.80 or 2.5% discount to 5 days VWAV including last day ....so need bring it below 1.85 for 5 days to get it below 1.80 ....so if u want its better to get it in market if it goes below 1.80 ....why bother the hassles

From my past experience I have learnt that once one finds out that any company not small investor friendly ...its better to forget it as they will keep doing such stuff in future also

GNE turned out to be much better yield provider then HGH !!!! Disappointed small investor

[alokdhir]

Record date for divvy is 26th Aug ...ex on 25th then SPP opens ...so it will be ex divvy selling of 5 days which will decide price of offer if its below 1.80 !!!

Trading will resume tomorrow and only one day its cum divvy ie 24th August ...How tight ? Everything rushed

[justakiwi]

Totally agree, with a much more realistic timeframe to apply and settle. The smallest shareholders are the ones paying the price for this.


What an annoying way to treat small shareholders. I was extremely busy today so missed the Jarden email. So I guess I have to take a punt on the SPP. Surely a striaght rights issue was the way to go?

[alokdhir]

When a company values it's own stock at a significant discount to the market price, it's only reasonable that the market follow their lead. For example, if a punter owned stock at the current price but committed to the discounted SPP, it makes sense that they sell now and use that money to fund the new purchase - bingo, instant capital gains. But only a couple of days or you lose your ex-Div. For that and other reasons, it's not surprising when the market re-rates the stock down to the company's lowly SPP valuation.

The whole thing looks a bit desperate, the obscene haste and compressed timeframes, the significant devaluation to market, ambushed on announcement day, waiver of the listing rules (time between announce, divi and cap raise), dilution of shareholders who cannot participate, the method of SPP instead of a rights offer. Something smells, it's just plain not a good look.

It seems they want to dilute small investors and enhance institutional or big investors thru private placement route ...agree doesn't look good at all

[alokdhir]

If u want 5.5 cents divvy then cant sell tomorrow ....VWAP starts from 30th August onwards

Jarden will support the SP as underwriter ...lol

[peat]

14083 whats up with this?

[winner69]

Help please

Webcast replay ….can you fast forward through the boring bits?

https://shareholders.heartland.co.nz/shareholder-resources/reports-results-presentations

[alokdhir]

19% dilution of equity ...even if u can afford to participate to your maximum allowed $ 50K ...still your holdings will get diluted ...but next year they doing 19% NPAT growth if they manage $ 114 .....so this dilution will only take a year's growth as price of non participation ...while still giving u 11 cents divvy for the year .

Thats in nutshell cost of this drama to small investors .

[Rawz]

Very smart raising capital at the top of the cycle!!

Don’t worry about missing out now. Be heaps available at the same price soon enough- just my opinion.

[Balance]

The NZX capital raising this year is a good case in point of how the sp can fall below the rights price.

Watch the shortfall situation carefully.

[clearasmud]

Very smart raising capital at the top of the cycle!!

Don’t worry about missing out now. Be heaps available at the same price soon enough- just my opinion.

Come on Rawz, your better than that.

[clearasmud]

19% dilution of equity ...even if u can afford to participate to your maximum allowed $ 50K ...still your holdings will get diluted ...but next year they doing 19% NPAT growth if they manage $ 114 .....so this dilution will only take a year's growth as price of non participation ...while still giving u 11 cents divvy for the year .

Thats in nutshell cost of this drama to small investors .

Dividend growth is minimal until they bed in their new investments.

[alokdhir]

Growth trend was 1 cent eps addition per year ...at current p/e of 13.5 thats growth to SP of 13 cents per year .

As next year eps remains same even though NPAT increases 19% so small investors loose out 13 cents of SP growth in the year ahead ...keeping all other things equal .

HGH SP will not be rerating up to next year guided eps as that eps is same as this years eps of 16 cents . Eventually after one month SP will come back to 210 levels ie 7.25% gross dividend yield and 6-7% eps growth prospects from FY24 onwards

This acquisition was supposed to be 1 cents eps accretive if financed thru debt or other means ....but if financed thru equity its neutral for eps growth of this year

Maybe in the long run its cheaper to finance a good acquisition thru rightly priced equity . Hopefully it will lead to better growth ahead ie FY 24 onwards as FY 23 growth got neutralised by enhanced equity ...they can still pay 11 cents dividend out of 16.1 cents eps forecast of FY23

[alokdhir]

Also I know many experts here had a good idea of this coming but they chose not to enlighten the followers . They had a $ 200 m Bridge loan ...which by nature needs to be settled soon either way . Corporate debt or Equity were the only options . As now rates are very unfavourable and debt is hard to secure so it was 7/10 chance of a equity raise . I understand it in hindsight but our " Experts " knew it pretty well and they kept quite on this possibility .....

[winner69]

Jeff has always had huge aspirations to be a real fintech …and probably realised NZ was too small a place to really make it.

So this Advance thing in Australia is going to be the platform to make his dreams come true….a real fintech

A few years time Heartland changers it’s name to Advance and essentially becomes an Aussie company with a branch in NZ

Heartland doesn’t resonates with Aussies …but Advance does eh …..and heaps more positive than Heartland.

Advance Jeff fair has a nice ring to it

[alokdhir]

Selling today will make us loose 5.5 Cents dividend ...so more prudent to wait one day ...imo

[Balance]

Jeff has always had huge aspirations to be a real fintech …and probably realised NZ was too small a place to really make it.

So this Advance thing in Australia is going to be the platform to make his dreams come true….a real fintech

A few years time Heartland changers it’s name to Advance and essentially becomes an Aussie company with a branch in NZ

Heartland doesn’t resonates with Aussies …but Advance does eh …..and heaps more positive than Heartland.

Advance Jeff fair has a nice ring to it

And Jeff thinks that he will be able to make it big in OZ when most NZ companies go over there and get their backsides kicked all the way back to NZ with their tails between their legs?

Telecom
Air NZ
Fletcher Building
BNZ
The Warehouse
NZI
Pumpkin Patch
Zintel
etc


Big red flag for me if he continues to raise capital year in month out to fund expansion into Australia.

Still a holder of the shares from when Georgie Porgie (PGC) helpfully exited at a lovely lowly price all those years ago.

[ithaka]

HGH
24/08/2022 08:31
OFFER
PRICE SENSITIVE
REL: 0831 HRS Heartland Group Holdings Limited

OFFER: HGH: Heartland $130 million placement fully subscribed

Not for release to US wire services or distribution in the United States.

NZX/ASX release
24 August 2022

Heartland's $130 million placement fully subscribed

Heartland Group Holdings Limited (NZX/ASX:HGH) (Heartland) is pleased to
announce that it has successfully completed the bookbuild for the fully
underwritten NZ$130 million placement (Placement) of the NZ$200 million
equity raising announced on 23 August 2022. The Placement was strongly
supported by existing institutional and retail shareholders and also
attracted significant bids from other institutional and retail investors who
Heartland welcomes as shareholders.

The Placement was fully subscribed at the fixed price of NZ$1.80 per share.
This price represents a discount of 12.8% to the ex-dividend adjusted last
close price of NZ$2.0650 per share on 22 August 2022, and a discount of 13.7%
to the 5-day volume weighted average ex-dividend adjusted price (VWAP) of
NZ$2.0851 (up to and including 22 August 2022).

Heartland undertook the Placement with the key objective of treating existing
shareholders in eligible jurisdictions fairly. All existing eligible
shareholders who bid for their pro-rata allocation of the Placement were
allocated at least that amount of new shares.

Settlement of the Placement is expected to occur on 26 August 2022 for the
ASX and on 29 August 2022 for the NZX, with the allotment of all shares and
the commencement of trading on the NZX and ASX expected to occur on 29 August
2022. The new shares to be issued under the Placement will rank equally in
all respects with Heartland's existing ordinary shares on issue, but will not
be eligible for the FY2022 final dividend with a record date of 26 August
2022, and will not entitle the investor to participate in the SPP which had a
record date of 22 August 2022.

As announced on 23 August 2022, Heartland is also undertaking a
non-underwritten NZ$70 million share purchase plan (SPP), with the ability
for Heartland to accept oversubscriptions at its discretion. A SPP offer
document will be sent to eligible shareholders on 25 August 2022 and will
also be available at www.heartlandshareoffer.co.nz (http://www.heartlandshareoffer.co.nz) from that date. All
eligible shareholders are encouraged to visit that website and apply online.

Key dates for the SPP are set out below.

Key SPP dates

Record Date: 7.00pm NZST/5.00pm AEST Monday 22 August 2022
Expected dispatch of SPP offer document: Thursday 25 August 2022
SPP opens: Thursday 25 August 2022
SPP closes: 7.00pm NZST/5.00pm AEST Monday 5 September 2022
Announcement of results of SPP: Thursday 8 September 2022
Settlement and allotment of shares issued under the SPP offer: Friday 9
September 2022
Trading of SPP shares commences on NZX: Friday 9 September 2022
Trading of SPP shares commences on ASX: Monday 12 September 2022

- ENDS -

[alokdhir]

HGH getting punished ...rightly so ...they deserve it

Bad company ethics ...behaved like a true selfish Bankers :t_down:

Jarden should help Jeff not loose face by SP dropping 10% on opening after Record Results ....lol

[bull....]

wonder if it go the same way as arv did after there rights issue

[alokdhir]

wonder if it go the same way as arv did after there rights issue

Its going below rights price on day 1 ....not after ...lol ...while today its got 5.5 cents divi too ...so today below 185.5 will be below rights price

[dabsman]

Pretty dissapointed how all this was managed. No opportunity to participate at all. What is wrong with having a rights offer? Very happy with the recent ANZ raise and took my full allocation. I didnt need to be favoured by my broker (my broker obviously didnt participate in HGH and I think ASB never do...). Just leaves a bad taste in my mouth

[bull....]

Its going below rights price on day 1 ....not after ...lol ...while today its got 5.5 cents divi too ...so today below 185.5 will be below rights price

got to love there timing , right at top of there business cycle

[alokdhir]

Pretty dissapointed how all this was managed. No opportunity to participate at all. What is wrong with having a rights offer? Very happy with the recent ANZ raise and took my full allocation. I didnt need to be favoured by my broker (my broker obviously didnt participate in HGH and I think ASB never do...). Just leaves a bad taste in my mouth

Me have ASB custodian services ...they didnt even send me any info as they said it was so rushed that only Jarden people could participate ...what a sham and no laws against it ....this is high street robbery by listed company ...

Jeff has committed fraud on small investors ....I will never ever invest in his company .

Happy he is getting egg on his face via NZX SP down 10% in spite of having 5.5 Cents divvy inside ...He deserves it ...Jarden too

[justakiwi]

Interestingly, Sharesies investors were able to apply for the Placement - not just the SPP. Unfortunately I have no spare cash right now so unable to take advantage of either option.

As others are saying, a rights issue would have evened the playing field, and would (probably) have given small investors like me, a little more time to gather funds.

Disappointing.


Pretty dissapointed how all this was managed. No opportunity to participate at all. What is wrong with having a rights offer? Very happy with the recent ANZ raise and took my full allocation. I didnt need to be favoured by my broker (my broker obviously didnt participate in HGH and I think ASB never do...). Just leaves a bad taste in my mouth

[Balance]

Chill folks.

Looks like there's enough flippers in the placement who are happy to take their gains after obtaining shares at $1.80.

Could very well see the sp below $1.80 in the months ahead - you can participate in at the placement price then.

Seen it all before.

[stoploss]

Interestingly, Sharesies investors were able to apply for the Placement - not just the SPP. Unfortunately I have no spare cash right now so unable to take advantage of either option.

As others are saying, a rights issue would have evened the playing field, and would (probably) have given small investors like me, a little more time to gather funds.

Disappointing.
Hi JAK,
This gives you plenty of time to gather some funds .

Record Date: 7.00pm NZST/5.00pm AEST Monday 22 August 2022
Expected dispatch of SPP offer document: Thursday 25 August 2022
SPP opens: Thursday 25 August 2022 SPP closes: 7.00pm NZST/5.00pm AEST Monday 5 September 2022
Announcement of results of SPP: Thursday 8 September 2022
Settlement and allotment of shares issued under the SPP offer: Friday 9September 2022
Trading of SPP shares commences on NZX: Friday 9 September 2022
Trading of SPP shares commences on ASX: Monday 12 September 2022

[bull....]

Chill folks.

Looks like there's enough flippers in the placement who are happy to take their gains after obtaining shares at $1.80.

Could very well see the sp below $1.80 in the months ahead - you can participate in at the placement price then.

Seen it all before.

too true , sellers booking there profits

[alokdhir]

Chill folks.

Looks like there's enough flippers in the placement who are happy to take their gains after obtaining shares at $1.80.

Could very well see the sp below $1.80 in the months ahead - you can participate in at the placement price then.

Seen it all before.

How will they be called flippers if they ready to sell at loss ...they bought at 1.80 ...so selling below 1.80 will be loss for them !!!

I am not sure it will go much below 1.80 and for much time if any ...after these 111 m shares get absorbed then it will go back to 2.00-2.10 range ...may take 2-3 months though

[bull....]

no way there business will down turn like all bank type business as world goes down

[Balance]

How will they be called flippers if they ready to sell at loss ...they bought at 1.80 ...so selling below 1.80 will be loss for them !!!

I am not sure it will go much below 1.80 and for much time if any ...after these 111 m shares get absorbed then it will go back to 2.00-2.10 range ...may take 2-3 months though

The flippers obtained their $1.80 shares yesterday and they are selling today to lock in their profits - knowing full well it's a case of who gets out first.

So who are the flippers?

They are existing shareholders (typically institutions or large investors) who participate in placements and sell their existing shares at above the placement price - knowing full well that the shares sold will be replaced by the placement shares.

Happens with almost every placement of shares where existing institutional shareholders are given preference.

Example :

ACC has (say) 15m HGH shares. They participate and take 2m shares in the placement at $1.80.

Once trading halt is lifted, they sell at anything above $1.855 to lock in some profits.

[mike2020]

Makes sense but really you have less than 1% of yesterdays placement traded and its hit the 1.80s already. I have enjoyed the div up until now, I liked the reverse loan book growth but I did have doubts about getting into the AU livestock business. HGH is starting to feel more of a roller coaster ride than I have previously experienced it to be. I considered it one of the stable parts of my portfolio long term. Now I am not sure.

[thegreatestben]

Makes sense but really you have less than 1% of yesterdays placement traded and its hit the 1.80s already. I have enjoyed the div up until now, I liked the reverse loan book growth but I did have doubts about getting into the AU livestock business. HGH is starting to feel more of a roller coaster ride than I have previously experienced it to be. I considered it one of the stable parts of my portfolio long term. Now I am not sure.

Feeling the same here Mike. I liked HGH as a do nothing having bought during the covid lows.

[alokdhir]

The flippers obtained their $1.80 shares yesterday and they are selling today to lock in their profits - knowing full well it's a case of who gets out first.

So who are the flippers?

They are existing shareholders (typically institutions or large investors) who participate in placements and sell their existing shares at above the placement price - knowing full well that the shares sold will be replaced by the placement shares.

Happens with almost every placement of shares where existing institutional shareholders are given preference.

Example :

ACC has (say) 15m HGH shares. They participate and take 2m shares in the placement at $1.80.

Once trading halt is lifted, they sell at anything above $1.855 to lock in some profits.

But how they take price below 1.80 was the main question ...not definition of flippers

U mentioned flippers will make sure price goes below 1.80 in future

[mike2020]

Were placement shares entitled to the div? I didn't think they were. That would mean anything over 1.80 is a win right?

[percy]

I do not like SPPs.
Seems stupid putting up a good deal of capital to get scaled back to 5% to 15% of what I applied for.
Rights issues are the only fair way as per the reasons you pointed out.
HGH have had plenty of time to organise a rights issue..
I have applied for a good number of shares in the placement for both myself and the wife.
See what happens.

Have received advice from Craigs we have received all the HGH placement shares we applied for.
Thanks Craigs.
They are not entitled to the current divie.

[Balance]

But how they take price below 1.80 was the main question ...not definition of flippers

U mentioned flippers will make sure price goes below 1.80 in future

The flippers are knocking the sp down post the placement.

Market sentiment and share price dynamics are what could take the sp lower than $1.80.

I am a realist - bear in mind I have plenty of HGH shares from when PGC sold down so I am not trying to knock the sp down.

I was simply telling those who are complaining about being able to participate in the placement at $1.80 that they could very well get their opportunity later.

NZX and ARV are recent examples.




Chill folks.

Looks like there's enough flippers in the placement who are happy to take their gains after obtaining shares at $1.80.

Could very well see the sp below $1.80 in the months ahead - you can participate in at the placement price then.

Seen it all before.

[alokdhir]

The flippers are knocking the sp down post the placement.

Market sentiment and share price dynamics are what could take the sp lower than $1.80.

I am a realist - bear in mind I have plenty of HGH shares from when PGC sold down so I am not trying to knock the sp down.

I was simply telling those who are complaining about being able to participate in the placement at $1.80 that they could very well get their opportunity later.

NZX and ARV are recent examples.

The way they have done placements ...ie Underwritten placement first then retail SPP non underwritten makes their life more difficult ...as first lot of flippers who got at 1.80 will make SP close to SPP price thus not many going that way which will lead to big shortfall which maybe sold at a discount ....Jarden is smart that they did underwritten part first and then let SPP part rot .....

Why they couldn't do SPP and Placement together or underwrite both parts at 1.80 !!! Jeff is supposed to be smarter then Jarden ...is he ??

[Balance]

The way they have done placements ...ie Underwritten placement first then retail SPP non underwritten makes their life more difficult ...as first lot of flippers who got at 1.80 will make SP close to SPP price thus not many going that way which will lead to big shortfall which maybe sold at a discount ....Jarden is smart that they did underwritten part first and then let SPP part rot .....

Why they couldn't do SPP and Placement together or underwrite both parts at 1.80 !!! Jeff is supposed to be smarter then Jarden ...is he ??

He wants the money and the underwriters are smart enough to play the game to win - after being caught with PEB, ARV and NZX.

I do not have a problem with companies raising capital ( great opportunities sometimes) but I must say I draw the line when they raise money to invest in Australia.

Outsized ego at play - what makes NZ executives think they can take on the Australian players? What competitive edge do they bring to that market of sharks and predators?

Remember how that idiot Mark Weldon bought into Grain Corp in Australia? All in the name of growth and diversification - came back to NZ with a black eye and destruction of shareholders' values.

[winner69]

Jeff says welcome to the new shareholders - both significant institutional and retail investors

All going to plan says Jeff - some small retail investors might be pissed off but they just don't get the big picture. They can always sell there shares.

Jeff waiting for that doyen of business journalism Jenny to ring him for comment on such an unfair capital raise - got his response already

And Jeff back on the phone to RBNZ tohurry them up to allow him to Advance

Been a busy morning for Jeff but main thing is its all going to plan

[alokdhir]

He wants the money and the underwriters are smart enough to play the game to win - after being caught with PEB, ARV and NZX.

I do not have a problem with companies raising capital ( great opportunities sometimes) but I must say I draw the line when they raise money to invest in Australia.

Outsized ego at play - what makes NZ executives think they can take on the Australian players? What competitive edge do they bring to that market of sharks and predators?

Remember how that idiot Mark Weldon bought into Grain Corp in Australia? All in the name of growth and diversification - came back to NZ with a black eye and destruction of shareholders' values.

I agree with your perception ...Outsized Ego at work ...

Are u happy to trust your money with such ego at play ? I am not that convinced at the moment

Also previous examples are not always what future holds ...so maybe like MFT he actually does better

Mind u all big 4 Aussy banks do more profitable business in NZ then in their own back yard ...So maybe he loves volumes and bigger market and thinks he is more efficient ...time will tell ...but I am worried with his EGO

[justakiwi]

Are these his words or yours?



All going to plan says Jeff - some small retail investors might be pissed off but they just don't get the big picture. They can always sell there shares.

[RTM]

Completely agree Balance. And you have an example with Mike below. Myself as well.
Although I won't drop them all...I am certainly considering lightening up a bit. Although already down to 8% of portfolio.:mad ;:


The flippers are knocking the sp down post the placement.

Market sentiment and share price dynamics are what could take the sp lower than $1.80.

I was simply telling those who are complaining about being able to participate in the placement at $1.80 that they could very well get their opportunity later.




Makes sense but really you have less than 1% of yesterdays placement traded and its hit the 1.80s already. I have enjoyed the div up until now, I liked the reverse loan book growth but I did have doubts about getting into the AU livestock business. HGH is starting to feel more of a roller coaster ride than I have previously experienced it to be. I considered it one of the stable parts of my portfolio long term. Now I am not sure.

[winner69]

alokdhir - Jeff is a very modest guy ....and far from being egotistical .... no outsized EGO here

[winner69]

Are these his words or yours?

Of course I'm putting words in Jeff's mouth ....but one can read Jeff like a book

[justakiwi]

Well if you have "read" him correctly, it seems pretty clear that retail investors are not his priority, and small investors are insignificant.


Of course I'm putting words in Jeff's mouth ....but one can read Jeff like a book

[alokdhir]

alokdhir - Jeff is a very modest guy ....and far from being egotistical .... no outsized EGO here

So in your view he can help small investors grow their wealth ? Is it reasonable to assume he will only embark on wealth creating projects and not take unnecessary risks with shareholders money etc ...In nutshell will he be able to create shareholder wealth ahead ?? I am not looking for big returns ...just 15% including dividend ie 6% Divvy and 9% Capital growth consistently ahead ??

Just looking for your personal expert opinion as I am wondering if HGH is turning to be ATM type company

[BlackPeter]

So in your view he can help small investors grow their wealth ? Is it reasonable to assume he will only embark on wealth creating projects and not take unnecessary risks with shareholders money etc ...In nutshell will he be able to create shareholder wealth ahead ?? I am not looking for big returns ...just 15% including dividend ie 6% Divvy and 9% Capital growth consistently ahead ??

Just looking for your personal expert opinion as I am wondering if HGH is turning to be ATM type company

Not sure I'd expect an ATM type drop, but some hype deflation might well be in the books. FPH or RYM could be examples for solid companies suffering hype deflation. Obviously - if the Australian adventure turns pear-shaped, than all bets are off.

[winner69]

So in your view he can help small investors grow their wealth ? Is it reasonable to assume he will only embark on wealth creating projects and not take unnecessary risks with shareholders money etc ...In nutshell will he be able to create shareholder wealth ahead ?? I am not looking for big returns ...just 15% including dividend ie 6% Divvy and 9% Capital growth consistently ahead ??

Just looking for your personal expert opinion as I am wondering if HGH is turning to be ATM type company

Over time you should be OK alokdhir.

No company can make small retail shareholders happy - most (even the likes of MFT and FPH) see them as a necessary evil.

Jeff's sent Chris Flood (his right hand man for years) over to Australia to get things moving. He'll manage that well.

Wouldn't guarantee you 15% annual return with Heartland though. You'll get your 7%/8% divie but capital gains over the years have been somewhat muted (because of high payout rate). The share price has a few spikes and a great return year year but often goes nowhere.

Typical is 5 year return from June 2017 when share price was 178 - 60 cents in divie and not much capital gain -overall return just over 4% pa

So to answer your question - Heartland will be OK .... no A2 here .... risk profile has increased a bit .... but your expectations of 15% pa returns might be a bit tough

jeez, if I used a 1% expected return in my FPH DCF model I would get FPH value at about $7

[herbert240]

Have received advice from Craigs we have received all the HGH placement shares we applied for.
Thanks Craigs.
They are not entitled to the current divie.

Well done Percy. Wife has HGH in managed portfolio with Craigs and wasn't contacted!

[alokdhir]

Over time you should be OK alokdhir.

No company can make small retail shareholders happy - most (even the likes of MFT and FPH) see them as a necessary evil.

Jeff's sent Chris Flood (his right hand man for years) over to Australia to get things moving. He'll manage that well.

Wouldn't guarantee you 15% annual return with Heartland though. You'll get your 7%/8% divie but capital gains over the years have been somewhat muted (because of high payout rate). The share price has a few spikes and a great return year year but often goes nowhere.

Typical is 5 year return from June 2017 when share price was 178 - 60 cents in divie and not much capital gain -overall return just over 4% pa

So to answer your question - Heartland will be OK .... no A2 here .... risk profile has increased a bit .... but your expectations of 15% pa returns might be a bit tough

jeez, if I used a 1% expected return in my FPH DCF model I would get FPH value at about $7

Thanks for your candid response .

I am beginning to think I am better off in GNE then in HGH for yield part of the portfolio . Its more reliable and stable with no such ambitions at work also which can be at crossroads with small investors interests

I am already regretting I diversified my yield portfolio with HGH in it also and not just GNE . But advise which I received here was sound thats why I did as diversification is always useful

[percy]

Well done Percy. Wife has HGH in managed portfolio with Craigs and wasn't contacted!

Neither was I.....
I emailed them with what we wanted.The power of emails.?
Pleased I applied for a good amount...lol.
Now that HGH have a strong Aussie base ,with Reverse Equity Loans and Stock Co,I think Advance Bank will speed up their growth trajectory.
An exciting rewarding future to be part of..

[Balance]

Jeff says welcome to the new shareholders - both significant institutional and retail investors

All going to plan says Jeff - some small retail investors might be pissed off but they just don't get the big picture. They can always sell there shares.

Jeff waiting for that doyen of business journalism Jenny to ring him for comment on such an unfair capital raise - got his response already

And Jeff back on the phone to RBNZ tohurry them up to allow him to Advance

Been a busy morning for Jeff but main thing is its all going to plan

Can’t blame Jeff for building up HGH’s institutional shareholder base at the expense of small retail shareholders.

Realistically, the institutions are the ones who can pour the hundreds of millions or billions of dollars required to fund growth if he gets the strategy right.

So has he got the strategy right?

Is expansion into Australia really a good idea?

[winner69]

Thanks for your candid response .

I am beginning to think I am better off in GNE then in HGH for yield part of the portfolio . Its more reliable and stable with no such ambitions at work also which can be at crossroads with small investors interests

I am already regretting I diversified my yield portfolio with HGH in it also and not just GNE . But advise which I received here was sound thats why I did as diversification is always useful

alokdhir, fyi last 5 years TSR returns from HGH have been as below. August years and TSR is change in share price plus gross dividend (not reinvested)

2018 -3%
2019 -2%
2020 -15%
2021 99%
2022 -10%

Hmm .... more down years than up years ...... and From August 17 returns has been 6.1% pa (gross dividends) ..... maybe I've been the mug punter

[herbert240]

[QUOTE=percy;972156]Neither was I.....
I emailed them with what we wanted.The power of emails.?
Pleased I applied for a good amount...lol.
Now that HGH have a strong Aussie base ,with Reverse Equity Loans and Stock Co,I think Advance Bank will speed up their growth trajectory.
An exciting rewarding future to be part of..[/QUOT

I have done placements through Chris Lee before after being contacted and thought Craigs would operate the same way so we have learnt a very good lesson...thanks Percy.

[alokdhir]

alokdhir, fyi last 5 years TSR returns from HGH have been as below. August years and TSR is change in share price plus gross dividend (not reinvested)

2018 -3%
2019 -2%
2020 -15%
2021 99%
2022 -10%

Hmm .... more down years than up years ...... and From August 17 returns has been 6.1% pa (gross dividends) ..... maybe I've been the mug punter

Doesn't look like a good investment TBH ...hardly any returns over 5 years time frame

I will pass on this when I get the chance ...wont be buying at 1.80 offer also ...Today sold some at open but now its price is in no mans land ...cant sell cant buy levels ...lol

[ronaldson]

Jarden client - not previous holder - applied for 12k and have had just over 4k allocated so roughly one-third of my application, with settlement by 29 August. No brokerage incurred, which is normal at least with Jarden on these occasions, and curiously the Contract Note says " CD " despite the placement shares supposedly not being eligible for the dividend. Will have to wait and see on that one but of course the shares trading on-market at the moment are on a CD basis going ex on Friday, so likely that is why.

[RTM]

Doesn't look like a good investment TBH ...hardly any returns over 5 years time frame

I will pass on this when I get the chance ...wont be buying at 1.80 offer also ...Today sold some at open but now its price is in no mans land ...cant sell cant buy levels ...lol

Yeah...at this stage I am passing as well. Have a buy in at 172...maybe this gets hit in the next couple of months. They've released the best news they had. probably no more updates for 6 months... ? what is there to drive the price up ? especially in the uncertain world we live in.
At this stage....passing. I have more than enough to join Percy's " exciting rewarding future to be part of" should they succeed.

[curious zebra]

Completely agree Balance. And you have an example with Mike below. Myself as well.
Although I won't drop them all...I am certainly considering lightening up a bit. Although already down to 8% of portfolio.:mad ;:

RTM, you say you've knocked your HGH holding down to 8% of your portfolio - do you mean 8% of your equity p/f, or 8% of your total investments incl bonds, property etc [excluding your home]? And, if you don't mind answering this, are you retired?
Just working on rebalancing our holdings and am interested - thanks!

[alokdhir]

Yeah...at this stage I am passing as well. Have a buy in at 172...maybe this gets hit in the next couple of months. They've released the best news they had. probably no more updates for 6 months... ? what is there to drive the price up ? especially in the uncertain world we live in.
At this stage....passing. I have more than enough to join Percy's " exciting rewarding future to be part of" should they succeed.

Its a dead investment for next 6 months ...even FPH looks more promising then this ...I just dont know how it was top pick of many brokers including our beloved Sharetrader Forum . Maybe Jarden had a ulterior motive to promote them ...but what about others ?

If u see W69 post on last 5 years returns then how come it was so popular .

They are embarking on a big gamble plan which has at best 50% chance of doing well ....which is too much risk for my old bones .

I thought it to be a stable yield provider not software company !!!!

[Ggcc]

Doesn't look like a good investment TBH ...hardly any returns over 5 years time frame

I will pass on this when I get the chance ...wont be buying at 1.80 offer also ...Today sold some at open but now its price is in no mans land ...cant sell cant buy levels ...lol
Very short sighted view, but hey I’m a happy holder at $1.30ish. While I know someone with 1 million shares at 85 cents. We are both very happy with their longterm approach. Each to their own however

[alokdhir]

Very short sighted view, but hey I’m a happy holder at $1.30ish. While I know someone with 1 million shares at 85 cents

If 5 years records are short sighted then maybe I am shortsighted ....agree

Still in profits doesn't mean what is the right thing to do like FPH at 37 was a sell ...lol

[Ggcc]

If 5 years records are short sighted then maybe I am shortsighted ....agree

Still in profits doesn't mean what is the right thing to do like FPH at 37 was a sell ...lol
The market is erratic and emotions running high right now as we all can’t know what the future holds.

[winner69]

14083 whats up with this?

Sussed this out yet peat - NTA 116 cents to 96 cents is some drop eh

NTA seems to have gone down a lot because they booked nearly $140m of goodwill for Stockco and there has been a huge increase in liabilities (4.9 billion to 6.3 billion). Borrowings increased by 900m - no wonder they needed a cap raise in a hurry

So hopefully a better look this time next year

[alokdhir]

The market is erratic and emotions running high right now as we all can’t know what the future holds.

Agree with u but I am thinking with my mind not heart and trying to figure out all the outcomes possible and my true purpose of investing in HGH ...which can be very different then yours ...its in that part of my portfolio which is yield part and has likes of GNE type stocks ...now it seems it doesn't belong or fit there ...maybe they trying to become a growth stock then reliable yield provider

[Ggcc]

Agree with u but I am thinking with my mind not heart and trying to figure out all the outcomes possible and my true purpose of investing in HGH ...which can be very different then yours ...its in that part of my portfolio which is yield part and has likes of GNE type stocks ...now it seems it doesn't belong or fit there ...maybe they trying to become a growth stock then reliable yield provider

I sort of see this share like Infratil which I purchased for $3 per share. The change from HBL to HGH changed my mind. People still don’t understand IFT after all these years, but hey the share price of theirs proves otherwise. I do understand when things don’t quite fit in to your vision of investing. I’ve pulled out of many shares in my time for that reason

[peat]

Sussed this out yet peat - NTA 116 cents to 96 cents is some drop eh

NTA seems to have gone down a lot because they booked nearly $140m of goodwill for Stockco and there has been a huge increase in liabilities (4.9 billion to 6.3 billion). Borrowings increased by 900m - no wonder they needed a cap raise in a hurry

So hopefully a better look this time next year

it wont matter anyway once they're a fintech! ;+)

[RTM]

Yesterdays problem child...

So I could sell some at 187 today (I'd still get the dividend right ? ).....and apply for them back in the share offer.
Profit of around 4% less commission. For filling some paper work in.
Any one any ideas on why I wouldn't do this ? I many be confused re the dividend date ?

[Master98]

Yesterdays problem child...

So I could sell some at 187 today (I'd still get the dividend right ? ).....and apply for them back in the share offer.
Profit of around 4% less commission. For filling some paper work in.
Any one any ideas on why I wouldn't do this ? I many be confused re the dividend date ?
problem is you can't guarantee to buy back what you already sold from SPP, heavily scaling very possible.

[RTM]

problem is you can't guarantee to buy back what you already sold from SPP, heavily scaling very possible.

Yes...that is a risk. I might also get any I miss out on cheaper in the future on-market...less than 180.
That is also possible. Who knows. And that's assuming I want to have the same sized holding in now have, not sure of that at the moment.

But if I sell today....do I still get the dividend on shares owned right now ? Thats what I need to be SURE on.

[percy]

problem is you can't guarantee to buy back what you already sold from SPP, heavily scaling very possible.

Exactly right.
However rather than selling any, I think the best approach is to apply for some in the SPP,depending on spare cash available,then hang on to the next full moon,before deciding whether to sell or not. Share price will most probably be over $2.10 by then.

[percy]

Yes...that is a risk. I might also get any I miss out on cheaper in the future on-market...less than 180.
That is also possible. Who knows. And that's assuming I want to have the same sized holding in now have, not sure of that at the moment.

But if I sell today....do I still get the dividend on shares owned right now ? Thats what I need to be SURE on.

Yes they are currently quoted XD on DB site.

[RTM]

Yes they are currently quoted XD on DB site.

Thank you.

[percy]

Thank you.
And this from NZX site.

Upcoming dividends
Code Ex Dividend Period Amount Supp. Imputation Payable Currency
HGH 25 Aug 2022 Final 5.500c 0.971c 2.139c 14 Sep 2022 NZD

[alokdhir]

Can u apply only worth $ 50K shares at 1.80 or U can apply for extra also via SPP ??

[BlackPeter]

Can u apply only worth $ 50K shares at 1.80 or U can apply for extra also via SPP ??

From the offer document:



...
On behalf of the Board, I am pleased to offer you the opportunity to participate in this SPP Offer. Under the SPP Offer, shareholders with an address recorded in Heartland’s share register that is in New Zealand or Australia each have the opportunity to apply for up to a maximum value of NZ$50,000 / A$45,000 of new ordinary shares in Heartland ...


I think the offer document is pretty clear, isn't it? "up to a maximum" means exactly that.

[alokdhir]

From the offer document:



I think the offer document is pretty clear, isn't it? "up to a maximum" means exactly that.

But people via earlier placement got as much as they applied for ? Did they ? As thats what I understand from Percy's message ....

[BlackPeter]

But people via earlier placement got as much as they applied for ? Did they ? As thats what I understand from Percy's message ....

I would not expect that they got what they applied for if they applied for more than what they were entitled to.

Don't think either that percy wanted to convey this?

Percy?

[alokdhir]

I would not expect that they got what they applied for if they applied for more than what they were entitled to.

Don't think either that percy wanted to convey this?

.

"I do not like SPPs.
Seems stupid putting up a good deal of capital to get scaled back to 5% to 15% of what I applied for.
Rights issues are the only fair way as per the reasons you pointed out.
HGH have had plenty of time to organise a rights issue..
I have applied for a good number of shares in the placement for both myself and the wife.
See what happens."

Also he said latter ...he got all he applied for ...

So I assumed good number means he applied for more then entitlement and got them all ....

Maybe u can read his mind better ...

[ithaka]

But people via earlier placement got as much as they applied for ? Did they ? As thats what I understand from Percy's message ....
My broker is Jarden. I was allocated about half of what I applied for. Perhaps other brokers had a different application/allocation ratio.

[alokdhir]

My broker is Jarden. I was allocated about half of what I applied for. Perhaps other brokers had a different application/allocation ratio.

Did u apply worth 50K NZD or more ??

[BlackPeter]

.

"I do not like SPPs.
Seems stupid putting up a good deal of capital to get scaled back to 5% to 15% of what I applied for.
Rights issues are the only fair way as per the reasons you pointed out.
HGH have had plenty of time to organise a rights issue..
I have applied for a good number of shares in the placement for both myself and the wife.
See what happens."

Also he said latter ...he got all he applied for ...

So I assumed good number means he applied for more then entitlement and got them all ....

Maybe u can read his mind better ...

I can't read his mind either ... and there is no need for that as well.

I can read however what he said, and this does not include that he applied for more than he was entitled for.

Just assume that the "good" number he mentioned is either less or equal to his entitlements. ... and he said that's what he got.

Where is the problem?

[alokdhir]

I can't read his mind either ... and there is no need for that as well.

I can read however what he said, and this does not include that he applied for more than he was entitled for.

Just assume that the "good" number he mentioned is either less or equal to his entitlements. ... and he said that's what he got.

Where is the problem?

Maybe in our respective assumptions ...U assumed he applied for less or equal then 50K worth ....me thought good number means ..a lot !!!

[percy]

.

"I do not like SPPs.
Seems stupid putting up a good deal of capital to get scaled back to 5% to 15% of what I applied for.
Rights issues are the only fair way as per the reasons you pointed out.
HGH have had plenty of time to organise a rights issue..
I have applied for a good number of shares in the placement for both myself and the wife.
See what happens."

Also he said latter ...he got all he applied for ...

So I assumed good number means he applied for more then entitlement and got them all ....

Maybe u can read his mind better ...

No mention about entitlement re the placement.
I did not want to waste time applying for say $50,000 in the SPP,only to receive $10,000 for wife and myself..
I therefore requested under $50,000 each for wife and myself from Craigs.
We received all we requested.I would guess it is up to your individual broker.
I threrefore will not be applying for any via the SPP [unless I change my mind.lol.]

[alokdhir]

No mention about entitlement re the placement.
I did not want to waste time applying for say $50,000 in the SPP,only to receive $10,000 for wife and myself..
I therefore requested under $50,000 each for wife and myself from Craigs.
We received all we requested.
I threrefore will not be applying for any via the SPP [unless I change my mind.lol.]

Thanks for clarifying ...as thats what I thought that there was no limit under placement ...limit is only for SPP

Also u applied around 50K each and got both in full ...no scaling down ...means they had lots to give ..

Just trying to get an idea what ratio will be for SPP ...at present it seems it can be also all applied for till 50K ...good chance of shortfall rather then excess applications ...as today is day 1 and SP is already 1.86 ....still plenty days to go

[ithaka]

Did u apply worth 50K NZD or more ??
I applied for 15000 shares and was allocated 7800 so it looks to have been quite well oversubscribed.

[alokdhir]

I applied for 15000 shares and was allocated 7800 so it looks to have been quite well oversubscribed.

Percy applied 27000 each for two applications and got both in full ....Maybe Jarden had more applications then Craigs

[sb9]

I won't be bothered to participate in SPP, firstly no surplus funds available and secondly can't be bothered locking funds for long without knowing how much gets allocated.

[ithaka]

Percy applied 27000 each for two applications and got both in full ....Maybe Jarden had more applications then Craigs
Jarden were the underwriting broker.

[alokdhir]

[QUOTE=sb9;972375]I won't be bothered to participate in SPP, firstly no surplus funds available and secondly can't be bothered locking funds for long without knowing how much gets allocated.[/QUOTE

Key SPP dates
Record Date: 7:00pm NZST/5.00pm AEST Monday, 22 August 2022
Expected dispatch of SPP offer document: Thursday, 25 August 2022
SPP opens: Thursday, 25 August 2022
SPP closes: 7.00pm NZST/5.00pm AEST Monday, 5 September 2022
Announcement of results of SPP: Thursday, 8 September 2022
Settlement and allotment of shares issued under the SPP offer: Friday, 9
September 2022
Trading of SPP shares commences on NZX: Friday, 9 September 2022
Trading of SPP shares commences on ASX: Monday, 12 September 2022

[alokdhir]

Jarden were the underwriting broker.

That I know ...then how come Craigs could fulfil all requirements ...maybe they could not inform all their clients ...while Jarden did and got better demand

[Master98]

Just trying to get an idea what ratio will be for SPP ...at present it seems it can be also all applied for till 50K ...good chance of shortfall rather then excess applications ...as today is day 1 and SP is already 1.86 ....still plenty days to go
39m shares for spp, currently have 593m shares in issue, so average 1 new share for ever 15 shares you own, i assume will heavily scaling.

[alokdhir]

As they have mentioned scaling or individual allotment can be based on your actual holdings on record date ...so if hold good qty and your order is less then say 19% of your holdings then u may get full allotment ...reason being ...allowing u to maintain your holding % ...ie no dilution of previous holding . Makes sense ...they trying to be fair

[Master98]

"If anyone's interested in the scaling ratio in the placement I applied to invest an extra $200,000 through Jarden and received 57,778 shares worth $104,000.40. 52% of the value I applied for."

[newtrader]

I applied at Jarden for about 20,000 shares but only received about a third (33.7%). Their scaling seems like a mystery, some received their full allocation, some half, and for people like me, only a third.

For what it's worth, I am an existing holder of HGH. The number of new shares allocated represents less than 20% of my HGH holdings before allocation.

[DonkeyKong]

I applied at Jarden for about 20,000 shares but only received about a third (33.7%). Their scaling seems like a mystery, some received their full allocation, some half, and for people like me, only a third.

For what it's worth, I am an existing holder of HGH. The number of new shares allocated represents less than 20% of my HGH holdings before allocation.

Does it represent roughly 18.74% of your HGH holding before the allocation?

[newtrader]

Does it represent roughly 18.74% of your HGH holding before the allocation?

It is less than 18.74% of my HGH holding before allocation.

I don't want to provide exact numbers but it was roughly 15%.

Do you have some insight on how the allocation scaling worked at Jarden (and elsewhere)?