HGH - Heartland Group Holdings

[alokdhir]

Yes Jarden are the most conservative of the 4 research analysts covering Heartland (Forbar, Craigs, Macquarie, Jarden), make of that what you will.

Consensus FY23 EPS is 16cps, 16.6cps FY24, 17.8cps FY25. Jarden are the lowest of the 4 each year.
Consensus DPS is 11.8cps, 12.7cps, 13.6cps for those same years, respectively. (6.6% to 7.5% net yield at spot price).

I think Jarden's base case is plausible if more conservative than the others, centred on some chunky impairment assumptions across FY23-fy24. Its nice to have a range and an average.

Note their base doesnt assume (as I imagine any other analysts do) the avenue bank acquisition until its completed. That could push EPS to 20c by fy25 under their BOE analysis.

I think Grant is an excellent analyst.

Thanks for your balanced and deep insights ...I wont be rushing to get in soon ...IMHO it can go bit lower in these difficult markets ...

[Muse]

Thanks for your balanced and deep insights ...I wont be rushing to get in soon ...IMHO it can go bit lower in these difficult markets ...

for sure, it might

no point fighting the trend (or the fed)

w/ respect to guidance and the consensus, believe it represents a strong performance - holding & growing eps through a recession - not bad.

[percy]

for sure, it might

no point fighting the trend (or the fed)

w/ respect to guidance and the consensus, believe it represents a strong performance - holding & growing eps through a recession - not bad.

And according to Craigs,Forbar,Hobson Wealth, and Jardens, paying increasing dividends.

[RTM]

Thanks for your balanced and deep insights ...I wont be rushing to get in soon ...IMHO it can go bit lower in these difficult markets ...

I am not sure of your age, your investment time horizon or whether you are simply trying to make a buck with a fast buy then sell (this is not me).
What I can tell you is it is very hard to time the exact bottom.
If you want to hold these...then what about going a 1/3 now...1/3 if they drop another 10% and another 1/3 for another 10% drop. (or some other %)
If you are a long term holder, you are not going to regret a few cents either way at this stage.
I have missed out several times on buys by dicking around worrying about 5c here or there, and missed a much bigger gain later.
FWIW.
RTM

[Rawz]

I am not sure of your age, your investment time horizon or whether you are simply trying to make a buck with a fast buy then sell (this is not me).
What I can tell you is it is very hard to time the exact bottom.
If you want to hold these...then what about going a 1/3 now...1/3 if they drop another 10% and another 1/3 for another 10% drop. (or some other %)
If you are a long term holder, you are not going to regret a few cents either way at this stage.
I have missed out several times on buys by dicking around worrying about 5c here or there, and missed a much bigger gain later.
FWIW.
RTM

this is a very good strategy.
or wait for the 50 day ema to cross the 200 day ema

[alokdhir]

I am not sure of your age, your investment time horizon or whether you are simply trying to make a buck with a fast buy then sell (this is not me).
What I can tell you is it is very hard to time the exact bottom.
If you want to hold these...then what about going a 1/3 now...1/3 if they drop another 10% and another 1/3 for another 10% drop. (or some other %)
If you are a long term holder, you are not going to regret a few cents either way at this stage.
I have missed out several times on buys by dicking around worrying about 5c here or there, and missed a much bigger gain later.
FWIW.
RTM

I have been told here many times by many wise and experienced people that you should not try to catch a falling knife ...also when to start looking to buy

Minimum is SP over 30SMA ...best is SP over 30SMA and 30SMA is over 60 SMA

I think thats a very sound advise ...

As at present HGH SP does not meet any of the above criteria so its better to stay away

But thanks for your well meaning advise

[ralph]

this is a very good strategy.
or wait for the 50 day ema to cross the 200 day ema
And then buy back in a third at a time aye

[justakiwi]

It seems to me from some of your previous posts, that you are focussed on following the advice of one "wise and experienced" person only, and are not willing to consider the wise and experienced guidance that some other posters offer. Which is fine - it is your choice who to listen to. But remember that even those you consider "experts" do not always get it right and seldom talk about that. Open your mind a little and take advantage of the depth of knowledge here, because sometimes your tunnel vision is inhibiting that. Just my humble word of advice for what its worth.


I have been told here many times by many wise and experienced people that you should not try to catch a falling knife ...also when to start looking to buy

Minimum is SP over 30SMA ...best is SP over 30SMA and 30SMA is over 60 SMA

I think thats a very sound advise ...

As at present HGH SP does not meet any of the above criteria so its better to stay away

But thanks for your well meaning advise

[alokdhir]

It seems to me from some of your previous posts, that you are focussed on following the advice of one "wise and experienced" person only, and are not willing to consider the wise and experienced guidance that some other posters offer. Which is fine - it is your choice who to listen to. But remember that even those you consider "experts" do not always get it right and seldom talk about that. Open your mind a little and take advantage of the depth of knowledge here, because sometimes your tunnel vision is inhibiting that. Just my humble word of advice for what its worth.

Thanks to u too . But as I said that advise though not of just one person is SOUND ...it works well for me !

Also I will not be too unhappy if I miss the bus too ...I am not that big fan of HGH like most here .

Its in confirmed downtrend ....but surprisingly the wise Man U referring to has initiated a position against his own advise to others here ....lol

As I was writing this ...HGH made new 52 week low ...1.77 ...SPP price

PS : I was told here that Banks dont do well in recessions ...big one is round the corner

[winner69]

As I was writing this ...HGH made new 52 week low ...1.77 ...SPP price



A new 52 week low ..... goodness gracious me

[winner69]

A new 52 week low ..... goodness gracious me

....and same price it was in Dec 2019 .... that is some time ago

[alokdhir]

....and same price it was in Dec 2019 .... that is some time ago

We have new one again 1.76 ...Stocks making new 52 week lows are to be watched only ...not bought ...

[winner69]

What surpised me in F22 result was that NPBT from Australia Rev Mortgages were only up 4.4% on pcp - compared to NZ Rev Mortgages being 40% and the whole Group up 15.6%

The much touted 'growth' part of the business a real under-performer - that's not good

[winner69]

We have new one again 1.76 ...Stocks making new 52 week lows are to be watched only ...not bought ...

Does it look like panic selling mate?

Out and about in the rain so cant look it up

[alokdhir]

Does it look like panic selling mate?

Out and about in the rain so cant look it up

No just going down on poor volumes generally with the market ...nothing like capitulation

[Rawz]

No just going down on poor volumes generally with the market ...nothing like capitulation

its only short term weakness. long term this is a gem. like oca.

[alokdhir]

its only short term weakness. long term this is a gem. like oca.

U just need one chance to buy around 1.50 ...lol

[percy]

u just need one chance to buy around 1.50 ...lol

lol............................................... ...................

[alokdhir]

Does it look like panic selling mate?

Out and about in the rain so cant look it up

Now its in free fall ...$ 1.72 !!!!

[Muse]

Now its in free fall ...$ 1.72 !!!!

Stop it your making me salivate.

Must not get itchy fingers. Wait, wait…

People must have gotten around to reading that amazing piece of business journalism

Last time I bought some (ignoring the cap raise) was for about a buck. It fell a bit further after i bought it, but havent regretted it.

[alokdhir]

Stop it your making me salivate.

Must not get itchy fingers. Wait, wait…

People must have gotten around to reading that amazing piece of business journalism

Last time I bought some (ignoring the cap raise) was for about a buck. It fell a bit further after i bought it, but havent regretted it.

Me is also holding myself back ...If I get lucky then will see ...still 3-4 weeks ahead are bad for markets ...so trying to be patient ...not easy

[percy]

Me is also holding myself back ...If I get lucky then will see ...still 3-4 weeks ahead are bad for markets ...so trying to be patient ...not easy

After putting your left foot in,take your left foot,do the hokey pokey and turn around .
I have shaken it all about, and have "well positioned" myself for next divie in March.
Done and dusted.lol.

[Rawz]

someone saved the day! finished at $1.76.

Started down and then rebounded back to $1.80 after Master Fiordland Moose started talking sense with his posts. But then started dropping like a stone as soon as Master Winner69 popped his head in here talking about slow aussie growth. Not sure what to make of it all to be honest

[Balance]

Not a great sign when a stock cannot hold its capital raise price. Usually results in the traders and flippers bailing out.

[alokdhir]

someone saved the day! finished at $1.76.

Started down and then rebounded back to $1.80 after Master Fiordland Moose started talking sense with his posts. But then started dropping like a stone as soon as Master Winner69 popped his head in here talking about slow aussie growth. Not sure what to make of it all to be honest

Thanks mate for not blaming me for any of the price movements today ....after all I am very small fish and even smaller general / expert ...:p

[Rawz]

Thanks mate for not blaming me for any of the price movements today ....after all I am very small fish and even smaller general / expert ...:p

Lol you actually get the credit for saying weeks ago this was going downhill!

Percy and RTM get the credits for pointing out that all this short term stuff doesn’t matter and it’s a great long term investment.

Everyone gets an award today 🏅

[alokdhir]

Lol you actually get the credit for saying weeks ago this was going downhill!

Percy and RTM get the credits for pointing out that all this short term stuff doesn’t matter and it’s a great long term investment.

Everyone gets an award today 

U shud run for next PM ....I think u have right qualities to be a very successful politician ....:p

[winner69]

Been a busy month for Heartland

Got the begging bowl out and collected $199m in cash ... after Jarden and other 'organisers' take their cut let's say they got $190m

Gave $32m back to shareholders by way of divie

Gave $150m back to bondholders

So $8m left of the $190m ... boost the petty cash or maybe put aside for the next round of exec bonuses lol

End result one could say the Heartland Balance Sheet is now 'healthier'

The wonders of high finance and 'money go rounds'

I sense another Bond issue coming up - probably be a Green Bond to give everybody the warm fuzzies - and priced to make it attractive for some

[alokdhir]

Been a busy month for Heartland

Got the begging bowl out and collected $199m in cash ... after Jarden and other 'organisers' take their cut let's say they got $190m

Gave $32m back to shareholders by way of divie

Gave $150m back to bondholders

So $8m left of the $190m ... boost the petty cash or maybe put aside for the next round of exec bonuses lol

End result one could say the Heartland Balance Sheet is now 'healthier'

The wonders of high finance and 'money go rounds'

I sense another Bond issue coming up - probably be a Green Bond to give everybody the warm fuzzies - and priced to make it attractive for some

If we assume what many experts / Gurus are saying on CNBC that S&P 500 manages to reach around 3000-3200 levels then what should be corresponding SP of HGH ...$ 1.50-55 or ....

Its a hypothetical exercise but with S&P showing signs of crumbling , Bonds crashing and rates expectations going sky high leading to deep and prolonged recession fears maybe happening .

In this worst case scenario HGH being a bank will do badly if not actually but sentiment wise ....thus SP should or will suffer

Even in such case compelling value remains $ 1.55 or it goes lower in your judgement ?? Just looking for your honest and informed view mate

[Rawz]

Winner already said his view is $2.20 by Christmas I think? But that may have changed now

[winner69]

HGH the 2nd most BOUGHT stock by Direct Broking/ Jarden clients last week (FBU was 1st)

Definition - BUY value traded in that stock exceeded the SELL value traded in that stock

Pretty canny those clients .... recognise a bargain when they see one maybe

[alokdhir]

Winner already said his view is $2.20 by Christmas I think? But that may have changed now

I gave him a distinct scenario which has a good chance of happening in next few weeks ...wanted in advance his views about corresponding HGH value proposition

[winner69]

If we assume what many experts / Gurus are saying on CNBC that S&P 500 manages to reach around 3000-3200 levels then what should be corresponding SP of HGH ...$ 1.50-55 or ....

Its a hypothetical exercise but with S&P showing signs of crumbling , Bonds crashing and rates expectations going sky high leading to deep and prolonged recession fears maybe happening .

In this worst case scenario HGH being a bank will do badly if not actually but sentiment wise ....thus SP should or will suffer

Even in such case compelling value remains $ 1.55 or it goes lower in your judgement ?? Just looking for your honest and informed view mate

I'll put that to my new financial advisor ..... and outfit called OpenAI ..... and see what it comes up with

[alokdhir]

I'll put that to my new financial advisor ..... and outfit called OpenAI ..... and see what it comes up with

U r smart mate ...U are never objective . U let people keep guessing your mind ...lol :p

[winner69]

Engineering the next digital frontier with Bendigo and Adelaide Bank


https://thatdigitalshow.withgoogle.com/post/apac-24-next-digital-frontier-with-bendigo-and-adelaide-bank/

[alokdhir]

Engineering the next digital frontier with Bendigo and Adelaide Bank


https://thatdigitalshow.withgoogle.com/post/apac-24-next-digital-frontier-with-bendigo-and-adelaide-bank/

If your new S&P 500 target is 2800 then my HGH target is $ 1.45 ....:D

[mike2020]

If your new S&P 500 target is 2800 then my HGH target is $ 1.45 ....:D

I'm not convinced you even want HGH but you are here talking it down daily. You may get to enjoy a good 6 weeks of misery, dig in buddy :t_up:

[percy]

If your new S&P 500 target is 2800 then my HGH target is $ 1.45 ....:D

My target price is $2.50.
Have had that for years.
Guess I always will.....
In the meantime I am looking forward to my next HGH divie.
Having increased my holding by 33% I am looking forward to a 33% increase in divies received.Fully imputed too.
The increased shareholding does off course mean I will be receiving that 33% increase for ever.,no matter what the share price does.
It is called being "well positioned."

[alokdhir]

My target price is $2.50.
Have had that for years.
Guess I always will.....
In the meantime I am looking forward to my next HGH divie.
Having increased my holding by 33% I am looking forward to a 33% increase in divies received.Fully imputed too.
The increased shareholding does off course mean I will be receiving that 33% increase for ever.,no matter what the share price does.
It is called being "well positioned."

Your target of $ 2.50 was exceeded early this year ...it went to $ 2.59 if I remember correctly ....maybe now its turn of mine coming ...then maybe I will also be well positioned like u ...lol

[alokdhir]

I'm not convinced you even want HGH but you are here talking it down daily. You may get to enjoy a good 6 weeks of misery, dig in buddy :t_up:

I dont need to convince anyone about anything ....U were the one crying about 1.53 not coming when MR B said that possible way back ...Now I think its possible ...also I made my position vey clear that I buy at my compelling value or I am happy to sit out

U need prepared for whats ahead ...thats what I am doing ....also no need for me to talk it down ...only if that was possible for a small fish like me ...SP will do what market forces tells it to do

[mike2020]

I dont need to convince anyone about anything ....U were the one crying about 1.53 not coming when MR B said that possible way back ...Now I think its possible ...also I made my position vey clear that I buy at my compelling value or I am happy to sit out

U need prepared for whats ahead ...thats what I am doing ....also no need for me to talk it down ...only if that was possible for a small fish like me ...SP will do what market forces tells it to do

I'm hardly one for tears, I just thought it was funny when it went to the 1.80s last time and the sky was falling and it rebounded back to 2.16ish.
I appreciate your concern for my state of preparation but fear not, I get blind Freddy's parrots audio books every Tuesday.

[alokdhir]

I'm hardly one for tears, I just thought it was funny when it went to the 1.80s last time and the sky was falling and it rebounded back to 2.16ish.
I appreciate your concern for my state of preparation but fear not, I get blind Freddy's parrots audio books every Tuesday.

As u were very concerned about my intentions so it became my business too to worry about your preparation ...lol

Jokes apart ....SP is very dependent on market conditions and Banks dont do well in recessions for obvious reasons

HGH P/E range had been historically 9-18 ....as now times are exceptionally bad for banks ahead so expecting it to touch P/E of 9 is not very unreasonable


so 16.2 eps times 9 = $ 1.45 SP ....hopefully u will understand my logic of my new target of compelling value

[mike2020]

Fair call. So, what if it really does turn into a capital hungry beast while interest rates rise? You just keep adjusting your buy price down till its 70 cents? (my new target) :t_up:

[Rawz]

HGH a great long term hold!
HGH also a great trade! Outrageous highs come and give way to outrageous lows!

[winner69]

If we assume what many experts / Gurus are saying on CNBC that S&P 500 manages to reach around 3000-3200 levels then what should be corresponding SP of HGH ...$ 1.50-55 or ....

Its a hypothetical exercise but with S&P showing signs of crumbling , Bonds crashing and rates expectations going sky high leading to deep and prolonged recession fears maybe happening .

In this worst case scenario HGH being a bank will do badly if not actually but sentiment wise ....thus SP should or will suffer

Even in such case compelling value remains $ 1.55 or it goes lower in your judgement ?? Just looking for your honest and informed view mate

I put your scenario as in your post to OpenA1 and asked it to 'advise' me what best way forward. It said:

It depends on your investment goals. If you're looking for stability then heartland shares may not be the best choice in these circumstances. However, if you're willing to accept some risk in exchange for the potential for income as well as capital appreciation, then heartland shares may offer an attractive investment opportunity at the current price but of course will offer even better returns if the share price drops to $1.35. And be sure to do your homework before investing.

I then gave it some parameters to see if it would come up with a target price in a years time. Response was:

I do not have a target price, but I would expect the share price to rebound soon.

I think that OpenAi is on to it

[alokdhir]

I put your scenario as in your post to OpenA1 and asked it to 'advise' me what best way forward. It said:

It depends on your investment goals. If you're looking for stability then heartland shares may not be the best choice in these circumstances. However, if you're willing to accept some risk in exchange for the potential for income as well as capital appreciation, then heartland shares may offer an attractive investment opportunity at the current price but of course will offer even better returns if the share price drops to $1.35. And be sure to do your homework before investing.

I then gave it some parameters to see if it would come up with a target price in a years time. Response was:

I do not have a target price, but I would expect the share price to rebound soon.

I think that OpenAi is on to it

Thats a great generic response ....but SP of $ 1.35 is noteworthy ....me had $ 1.45 as 9 times of 16.2 eps in my mind is very compelling value

Rebound soon part is surely market dependent ....but as I expect markets to make significant bottom ...hopefully the final bottom in next few weeks ....then all will rebound surely

Lets c where it reaches ...1.45 is too far away ...

[winner69]

Thats a great generic response ....but SP of $ 1.35 is noteworthy ....me had $ 1.45 as 9 times of 16.2 eps in my mind is very compelling value

Rebound soon part is surely market dependent ....but as I expect markets to make significant bottom ...hopefully the final bottom in next few weeks ....then all will rebound surely

Lets c where it reaches ...1.45 is too far away ...

I think most things these days are generic, even artificial intelligence

[Ggcc]

I dont need to convince anyone about anything ....U were the one crying about 1.53 not coming when MR B said that possible way back ...Now I think its possible ...also I made my position vey clear that I buy at my compelling value or I am happy to sit out

U need prepared for whats ahead ...thats what I am doing ....also no need for me to talk it down ...only if that was possible for a small fish like me ...SP will do what market forces tells it to do

In this case in this market I am assuming Mr B might be correct and if a war happen there will be bargains in every sector and sub $1 will be possible.

[alokdhir]

I think most things these days are generic, even artificial intelligence

Mate SP now $ 1.66 ...Bring out your big bucks ...or not yet ?

[Rawz]

Mate SP now $ 1.66 ...Bring out your big bucks ...or not yet ?

we havnt even had bad economic numbers hit the front page of the NZ Herald! SP dropping like a stone and we not yet in a recession.

this is going to get way oversold i feel

[alokdhir]

we havnt even had bad economic numbers hit the front page of the NZ Herald! SP dropping like a stone and we not yet in a recession.

this is going to get way oversold i feel

Markets are super smart and quick these days ...when they see 10Y rates of 4% in US they know what ahead ...they dont need to see actual news ...that will take time to come ....but market pretty sure it will come ahead ...

Yes agree they will end up overdoing it ...but thats how markets work ...they overdo on both sides ...

Knowing that waiting for $ 1.55 is not unreasonable ...whats your opinion ?

[Rawz]

Markets are super smart and quick these days ...when they see 10Y rates of 4% in US they know what ahead ...they dont need to see actual news ...that will take time to come ....but market pretty sure it will come ahead ...

Yes agree they will end up overdoing it ...but thats how markets work ...they overdo on both sides ...

Knowing that waiting for $ 1.55 is not unreasonable ...whats your opinion ?

I post awhile back that when HGH raised funds to buy the reverse mortgage business the price book value dropped to 0.97. It is very unlikely but just with this bear market combined with the cap raise sucking up a lot of demand for HGH shares maybe things get crazy and way oversold and we get:

$1.44 (book value) x 0.97 = $1.40 SP

[alokdhir]

I post awhile back that when HGH raised funds to buy the reverse mortgage business the price book value dropped to 0.97. It is very unlikely but just with this bear market combined with the cap raise sucking up a lot of demand for HGH shares maybe things get crazy and way oversold and we get:

$1.44 (book value) x 0.97 = $1.40 SP

Not too far away from yesterdays $ 1.45 ie 9 times forward earnings ....possible if we lucky ...:cool:

[Balance]

Not too far away from yesterdays $ 1.45 ie 9 times forward earnings ....possible if we lucky ...:cool:

Assuming eps will still be 16 cps.

Not so sure about that!

[bull....]

Assuming eps will still be 16 cps.

Not so sure about that!

if nz goes into recession i doubt they will too

[Rawz]

Assuming eps will still be 16 cps.

Not so sure about that!


if nz goes into recession i doubt they will too

Im sure Jeff has got enough tucked away to hit his FY23 guidance- after all its flat eps growth compared to previous year, so not like they are forecasting big growth..? The 16 cps is possibly the one thing that can be relied on (surely?!?)

just cant rely on the market having faith and thus the big sell off

[Muse]

Im sure Jeff has got enough tucked away to hit his FY23 guidance- after all its flat eps growth compared to previous year, so not like they are forecasting big growth..? The 16 cps is possibly the one thing that can be relied on (surely?!?)

just cant rely on the market having faith and thus the big sell off

Regarding guidance, I think heartland actually has one of the easier gigs in forecasting their business over the next 12 months, at an operational & pre movement in provision basis, and is why they have one of the better track records of meeting guidance on the NZX. Their income is contracted and mostly at fixed rates, the majority of the warehouse/ABS interest costs are hedged, and deposit unhedged but relatively inelastic and predictable. They have a very good handle on fixed costs. They will be very intune to the run rate in originations and book growth, but its the book in place at the beginning of the year rather than the originations added to it through out the year that underpins the annual group result. In terms of actual incurred credit losses incurred during the year, the nature of their receivables is still quite benign for the next 12 months but they will be quite alive to the run rate and how that is evolving.

The things that have the potential to markedly swing the results come in at year end, are non cash and accounting related, and more difficult to forecast.

The first is the provision for all future expected credit losses. The company obviously incurs some credit losses during the year, but then at year end, it has to decide of its gross book of ~$1bn, what are the total credit losses expected over the life of those receivables, and net that figure off gross receivables. The movement in the provision from the prior year to the ending position threads through the P&L as an expense. FIGS have well established econometric models that forecast those losses and they still require input assumptions, which are usually the consensus estimate from professional economists on the near/medium term outlook for things like unemployment, GDP, wage growth, etc (but mainly unemployment). At 30 June, hgh mgmt will have waited until the last minute to get those forecasts, agree them with their internal risk committee & socialise it with their auditors, then thread them through the model. But in issuing guidance they have to think about how that consensus might change in 12 months - and how the provision rate % might change, which forms part of their guidance range, and is something they just dont have much control over).

The other tricky thing is the effectiveness of hedge accounting which is too boring to talk about

[winner69]

Not too far away from yesterdays $ 1.45 ie 9 times forward earnings ....possible if we lucky ...:cool:

Jeez alokdhir - a PE of 9 ..... that is so CHEAP .... even CHEAPER than today

Likely to be over 2 bucks by Christmas - makes it a BUY now

[alokdhir]

Jeez alokdhir - a PE of 9 ..... that is so CHEAP .... even CHEAPER than today

Likely to be over 2 bucks by Christmas - makes it a BUY now

U keep forgetting the pearls of wisdom of Mr B ...HGH extended trading range is 9-18 ...so I am assuming these are 9 times with Balance and Bull also posting on HGH thread ....surely must be 9 times ...lol

[850man]

if nz goes into recession i doubt they will too

Hoping Stockco will offset somewhat against the NZ recession (not that there will be one according to Robertson)

[winner69]

U keep forgetting the pearls of wisdom of Mr B ...HGH extended trading range is 9-18 ...so I am assuming these are 9 times with Balance and Bull also posting on HGH thread ....surely must be 9 times ...lol

Goodness gracious - at PE of 18 we're looking at $2.88 this time next .... yes $2.88

Better get in now ..... buy now and much better return than those Westpac Bonds you were talking about earlier

[alokdhir]

Goodness gracious - at PE of 18 we're looking at $2.88 this time next .... yes $2.88

Better get in now ..... buy now and much better return than those Westpac Bonds you were talking about earlier

Those Bond yields will help this go to $ 1.55 ...GNE has come to $ 2.70 because of those yields mate ...U r master yourself ...no need to show torch to Sun ...lol

[winner69]

Those Bond yields will help this go to $ 1.55 ...GNE has come to $ 2.70 because of those yields mate ...U r master yourself ...no need to show torch to Sun ...lol


Alokdhir …you buying those Heartland BANK Bonds at 5.43%?

[alokdhir]

Alokdhir …you buying those Heartland BANK Bonds at 5.43%?

I will start buying HGH at 1.54....Bonds time is gone ....Growth stocks time has come ...Yield time also gone as theme

[winner69]

No need to worry about the future …all under control.....we are guided by Te kapehu whetu (the star compass) ... we know our way

From the Annual Report out today -

see image - you cant copy and paste from AR

[percy]

I will start buying HGH at 1.54....Bonds time is gone ....Growth stocks time has come ...Yield time also gone as theme

Every 6 months as my divies hit my bank a/c I will be reminded the theme keeps on keeping on.!!..
In fact with increasing divies it just gets better and better...lol

[alokdhir]

Every 6 months as my divies hit my bank a/c I will be reminded the theme keeps on keeping on.!!..
In fact with increasing divies it just gets better and better...lol

Good on u mate ...as long as u happy its all good ....I had reduced my yield stocks and switched to KFL for yield as I really like their portfolio of quality growth stocks at bargain prices ...ready to bear pain for few months if needed .

HGH will be welcome but only at compelling valuations which is from 10% Gross yield to 9 times ahead eps

[percy]

Good on u mate ...as long as u happy its all good ....I had reduced my yield stocks and switched to KFL for yield as I really like their portfolio of quality growth stocks at bargain prices ...ready to bear pain for few months if needed .

HGH will be welcome but only at compelling valuations which is from 10% Gross yield to 9 times ahead eps

Yes KFL have a very strong selection of stocks.
Pity their eps were negative -5.49cents.[according to DB]
Their chart looks very much like HGH's..!! Terrible.
KFL share price $1.48...NTA $1.41.
HGH share price $1.62...NTA .96cents.

PS.I prefer to loose my own money with out paying someone to do it for me.
A lot more fun...

[alokdhir]

Yes KFL have a very strong selection of stocks.
Pity their eps were negative -5.49cents.
Their chart looks very much like HGH's.

Agree with all negatives pointed out ...But still KFL is my present yield choice ...maybe my suicide mission ....Mission Possible ...lol

[Rawz]

I wonder why KFL don’t take a position in HGH? I thought they liked growth stocks?

[Muse]

Agree with all negatives pointed out ...But still KFL is my present yield choice ...maybe my suicide mission ....Mission Possible ...lol

I enjoy your humour and conviction Alokdhir - both good qualities in this game.

Probably will regret this...but here is something that could unnerve a few folks...

Heartland carry zero/nil/zilch provision for their reverse mortgage book.

For their non reverse mortgage book, they have $4.198bn is gross receivables, and a closing provision of $52m, or about 1.2% of gross receivables. That number has reduced from 2% across FY19/FY20 when they were doing lots of peer to peer lending, but made some step changes down in FY21 and FY22 as p2p went into run off. Under accounting rules, they are required to book a closing provision for all future expected credit losses, even if they originated the loan on the very last business day of the year, or if those losses could actually spread numerous years.

Reverse mortgages are not required to be specifically provided for, and given their nature are held at face value (deemed fair value).

Reverse mortgage lending is not available for anyone below 60 years of age. The vast majority of lending is drip fed as and when needed, rather than a big up front lump sum, as interest is not paid in cash, but rather capitalised (added) to the existing balance, which then compounds again. The LVRs are very low and linked to the age of the borrower. Interest rates are variable and can rise or fall with movements in wholesale costs.

This is interesting and important reading for the characteristics of RM lending:
https://www.heartland.co.nz/Uploads/Seniors/Resources/reverse-mortgage-fact-sheet.pdf?3

But if someone borrowed at 60 and wound up living to like 100, and there was a housing crash and no recovery, coupled with sustained high interest rates, not inconceivable there could eventually be some provision introduced

To put some context around it, though...say that unfolded in FY22...and a provision of 0.3% (25% of provision for other receivables) was applied to reverse mortgages. That would see a change in provision of 0 to 6.183m, and thread through the P&L, and after tax impact of 4.4m.

Heartland had $13.8m of impairment expenses in FY22, consisting of $16.7m in incurred credit losses, a positive movement in ECL provision of +1.2m, and acquired $1.2m of provisions as part of stockco.

Jarden for FY23 are forecasting $30m of impairment expenses (probably mostly due to increased provisions rather than incurred credit losses but they dont break it out), $104m NPAT (up from 96m in FY22), and EPS of 15.2c (down a cent from FY22).

That gives me quite a bit of comfort in terms of the credit risk in this year. May be a touch conservative for FY23, FY24 about bang on, and FY25 they are probably a bit optimistic. The thing with recessions and banks, is the underlying credit quality lasts a bit longer than you'd think at the beginning of a interest rate hiking cycle as people have so many other things to turn off before they start defaulting on loans. But that just pushes out the inventible a bit longer, and delays the recovery.

[Ferg]

Thanks for explaining FM - apparently I need to spread more reputation around. The other beauty of RM interest is it compounds. But as you say, with the right set of circumstances (high rates and longevity) some of that accumulated interest may not crystallise into cash.

[Muse]

Thanks for explaining FM - apparently I need to spread more reputation around. The other beauty of RM interest is it compounds. But as you say, with the right set of circumstances (high rates and longevity) some of that accumulated interest may not crystallise into cash.

it compounds!
Yes, the power of compounding, marvelous.

The negative, though, is the RM business becomes quite a capital intensive business. It lends plenty of money, recognises lots of income, but receives bugger all cash (income locked up under receivables rather than cash) until someone's beloved ceases to be. more or less anyway.

[Rawz]

I enjoy your humour and conviction Alokdhir - both good qualities in this game.

Probably will regret this...but here is something that could unnerve a few folks...

Heartland carry zero/nil/zilch provision for their reverse mortgage book.

For their non reverse mortgage book, they have $4.198bn is gross receivables, and a closing provision of $52m, or about 1.2% of gross receivables. That number has reduced from 2% across FY19/FY20 when they were doing lots of peer to peer lending, but made some step changes down in FY21 and FY22 as p2p went into run off. Under accounting rules, they are required to book a closing provision for all future expected credit losses, even if they originated the loan on the very last business day of the year, or if those losses could actually spread numerous years.

Reverse mortgages are not required to be specifically provided for, and given their nature are held at face value (deemed fair value).

Reverse mortgage lending is not available for anyone below 60 years of age. The vast majority of lending is drip fed as and when needed, rather than a big up front lump sum, as interest is not paid in cash, but rather capitalised (added) to the existing balance, which then compounds again. The LVRs are very low and linked to the age of the borrower. Interest rates are variable and can rise or fall with movements in wholesale costs.

This is interesting and important reading for the characteristics of RM lending:
https://www.heartland.co.nz/Uploads/Seniors/Resources/reverse-mortgage-fact-sheet.pdf?3

But if someone borrowed at 60 and wound up living to like 100, and there was a housing crash and no recovery, coupled with sustained high interest rates, not inconceivable there could eventually be some provision introduced

To put some context around it, though...say that unfolded in FY22...and a provision of 0.3% (25% of provision for other receivables) was applied to reverse mortgages. That would see a change in provision of 0 to 6.183m, and thread through the P&L, and after tax impact of 4.4m.

Heartland had $13.8m of impairment expenses in FY22, consisting of $16.7m in incurred credit losses, a positive movement in ECL provision of +1.2m, and acquired $1.2m of provisions as part of stockco.

Jarden for FY23 are forecasting $30m of impairment expenses (probably mostly due to increased provisions rather than incurred credit losses but they dont break it out), $104m NPAT (up from 96m in FY22), and EPS of 15.2c (down a cent from FY22).

That gives me quite a bit of comfort in terms of the credit risk in this year. May be a touch conservative for FY23, FY24 about bang on, and FY25 they are probably a bit optimistic. The thing with recessions and banks, is the underlying credit quality lasts a bit longer than you'd think at the beginning of a interest rate hiking cycle as people have so many other things to turn off before they start defaulting on loans. But that just pushes out the inventible a bit longer, and delays the recovery.

That’s an interesting thought, FM. Provision on the rev mortgage book.. I wonder how far house prices would have to fall for them to slap one on?

I think it’s gold brick lending because of the LVR but I guess all lending is never totally risk free

[davflaws]

No need to worry about the future …all under control.....we are guided by Te kapehu whetu (the star compass) ... we know our way

from AR

And far in the distance - is that the faint sound of a hysterical dog howling at the moon?

[Balance]

And far in the distance - is that the faint sound of a hysterical dog howling at the moon?

Not to forget Adrian Orr & RBNZ are guided by Te Ao Maori principles of banking. The best!

NZ is well positioned to ‘handle all kind of market conditions and challenges.’

Hang on - wasn’t that what Hanover Finance advertised before it went under?

[percy]

Yes KFL have a very strong selection of stocks.
Pity their eps were negative -5.49cents.[according to DB]
Their chart looks very much like HGH's..!! Terrible.
KFL share price $1.48...NTA $1.41.
HGH share price $1.62...NTA .96cents.

PS.I prefer to loose my own money with out paying someone to do it for me.
A lot more fun...

There was I thinking at 9.30 am I was going to pick up some more HGH shares at $1.64..Wrong again..lol
Perhaps they will come back this afternoon.?

[alokdhir]

There was I thinking at 9.30 am I was going to pick up some more HGH shares at $1.64..Wrong again..lol
Perhaps they will come back this afternoon.?

If I believe in Bull then surely in few days ....But maybe never ...Today is happy day for all ...me too ...lol

[Snow Leopard]

There was I thinking at 9.30 am I was going to pick up some more HGH shares at $1.64..Wrong again..lol
Perhaps they will come back this afternoon.?

My excuse is that guys have gone to summer time without telling me and I was an hour late to the party! :(

[percy]

There was I thinking at 9.30 am I was going to pick up some more HGH shares at $1.64..Wrong again..lol
Perhaps they will come back this afternoon.?

Well well well at the end of the day I got them at $1.63....lol

[Balance]

Well well well at the end of the day I got them at $1.63....lol

Obviously some institutional punters who partook in the $1.80 placement and decided they want out.

Not a good sign when a stock cannot hold its placement price so soon after the CR.

[Old mate]

Classic Percy. After all the excitement this morning. Good work :t_up:

[Rawz]

I am shocked at the SP movements today. I initially had fomo!! Clearly this is still in a downtrend with someone consistently selling out

[percy]

I am shocked at the SP movements today. I initially had fomo!! Clearly this is still in a downtrend with someone consistently selling out

I think the markets will be volatile for awhile yet.
Companies with solid earnings,paying good yields ,and who have directors/management as large shareholders ride out the storms.
With more earnings coming from Australia the weaker NZ dollar will work in our favour.
I have done very well over the past 11 or 12 years being a HGH shareholder.I think the next 11 years will be even more rewarding.

[percy]

Its share price suggests that "hard land" is more suitable name.

RAWZ.
You were warned,by Newman's post 01-06-2011....... ..!!...lol

[Rawz]

RAWZ.
You were warned,by Newman's post 01-06-2011....... ..!!...lol

I just read the first 10 pages of this thread including Newman’s post back in 2011.

HGH/HNZ really has done well to pull it all together! There were a lot of questions being asked at the time of the merging/acquisitions and bank license requests etc. now look at them- expanding into Aus! How far they have come.

Percy you always had the faith aye, even back then and just like now. No doubt in 11 years time there will be more questions being asked and the cycle will continue..

One thing that caught my eye was a post by Lizard saying it was great buying below NTA with the SP around 58cents vs NTA at 83 cents.. imagine that sort of discount today! (It wouldn’t happen). However the NTA growth in 11 years is only 73.5%? Doesn’t seem like much? What’s up with that?

[winner69]

I just read the first 10 pages of this thread including Newman’s post back in 2011.

...........

. However the NTA growth in 11 years is only 73.5%? Doesn’t seem like much? What’s up with that?

Rawz - that's only 5% pa .... as you say doesn't seem much and intuitively seems wrong

But its the mainly result of having such a high dividend payout ratio .... retained earnings don't grow much

But

[Rawz]

Rawz - that's only 5% pa .... as you say doesn't seem much and intuitively seems wrong

But its the mainly result of having such a high dividend payout ratio .... retained earnings don't grow much

But

But......?? Talk about leaving us hanging lol

'But the dividend yield is on average 6%.. total return is double digits so no worries?'

[Balance]

We could see $1.55 today?

An ever rising interest rate is hard on the cash flow for HGH to fund the RM book. Need more capital raisings to keep growing the RM book until it reaches scale & maturity which would be at least another 5 years in the future?

[winner69]

But......?? Talk about leaving us hanging lol

'But the dividend yield is on average 6%.. total return is double digits so no worries?'

Sorry - that's why Percy is so happy

Does suppress share price over time though .... but you can't have both eh

[Muse]

All this talk on payout ratio being too high or low. Thought I would check how it compares to the last reported full year payout ratios of the Aussie banks.

ANZ: 64.9%
CBA: 68.4%
NAB: 63.7%
WBC: 80.9%:
Ave: 69.5%

HGH: 68.4%

Seems like HGH paying out an industry normal level of earnings.

[winner69]

Hey Rawz - your NTA query the other day might be better explained if I used how Heartlands Book Value (Shareholder Equity) has eveolved over the last 10 years.

At July 2012 BV was $375m / $0.96 a share. July 2022 BV was $808m / $1.36 share - BV per share has grown at 3.5% pa ....which doesn't seem right for a 'growth' company.

How has the $375m grown to $808m?

Additional shareholder capital of $258m has been put in - $158 from capital raises and $100m from the DRIP. There are 204m more shares than in 2012

In those 10 years profits were $601m and dividends of $416m were paid. Along with bit of other stuff (reserves etc) this means Retained Earnings (to fund growth) have increased by $176m

In summary - Heartland has $344m more capital than 10 years ago. Shareholders have put in another $258m over the 10 years and $175m of profits have been retained.

Jeff will see all this as a balancing act between making respectable returns (ROE), having sufficient capital and keeping shareholders happy.

Real invest managers will view / value Heartland on a Yield / Price Book multiple basis and possibly why not that many (growth?)funds don't seem to have in their portfolio.

Solid dividend yield but share price will likely continue to be 'suppressed' (not go up as fast as some expect) as essentially valued on that Price/Book basis where that Book Value not growing at a fast rate. But as we've seen that Price / Book ratio has ranged from below 1 to 1.9 over the last 5 years which has resulted in large swings in the share price

Of course the new $200m of capital has raided the Book Value to $1.44 - average P/B last 5 years has 1.4 so maybe $2.00 is a 'fair' valuation at the moment (with a bit of +/- over time eh)

[Rawz]

Hey Rawz - your NTA query the other day might be better explained if I used how Heartlands Book Value (Shareholder Equity) has eveolved over the last 10 years.

At July 2012 BV was $375m / $0.96 a share. July 2022 BV was $808m / $1.36 share - BV per share has grown at 3.5% pa ....which doesn't seem right for a 'growth' company.

How has the $375m grown to $808m?

Additional shareholder capital of $258m has been put in - $158 from capital raises and $100m from the DRIP. There are 204m more shares than in 2012

In those 10 years profits were $601m and dividends of $416m were paid. Along with bit of other stuff (reserves etc) this means Retained Earnings (to fund growth) have increased by $176m

In summary - Heartland has $344m more capital than 10 years ago. Shareholders have put in another $258m over the 10 years and $175m of profits have been retained.

Jeff will see all this as a balancing act between making respectable returns (ROE), having sufficient capital and keeping shareholders happy.

Real invest managers will view / value Heartland on a Yield / Price Book multiple basis and possibly why not that many (growth?)funds don't seem to have in their portfolio.

Solid dividend yield but share price will likely continue to be 'suppressed' (not go up as fast as some expect) as essentially valued on that Price/Book basis where that Book Value not growing at a fast rate. But as we've seen that Price / Book ratio has ranged from below 1 to 1.9 over the last 5 years which has resulted in large swings in the share price

Of course the new $200m of capital has raided the Book Value to $1.44 - average P/B last 5 years has 1.4 so maybe $2.00 is a 'fair' valuation at the moment (with a bit of +/- over time eh)

Thank you for your post Winner. I’m sure a lot of people learning about HGH have taken lots of value from it, I certainly have.

Nothing like a SP spiraling out of control to focus peoples thoughts about a company. There have been some really good posts on this thread over the last few weeks.

For me HGH is a great dividend stock and yes puzzle is solved- it’s not a growth stock and that is why KFL wouldn’t touch it (a question I also asked). That NTA growth is very avg!

HGH have proven good quality credit risk and I think they price the risk (I.e. loans) really well. I think at todays SP for the long term you can’t go wrong. Collect the div and pick up a capital gain to at least keep your capital in line or ahead of inflation (in the long run).

For me an appropriate multiple to value this today is 1.2x NTA which is $1.44x1.2= $1.73 sp. I give it a below avg multiple because of these uncertain times we are in and this is what ANZ bank accepted for UDC in the June 2020 uncertain times. The buyer was big Japanese bank, Shinsei bank. The multiple these two big banks and all their advisors came up with must be considered fair (for uncertain times).

Now what the market does to the fair value SP of $1.73 is unknown but I am thinking in a capitulation event a 30% discount isn’t unreasonable for a very short period of time that could mean a crazy unreasonably low SP in the low $1.20s. Wow now that is back the truck up territory!

In the good times a 1.4x multiple is sure to came around again so Winners SP of $2 will be back one day and then in the great times a 1.6x or above multiple or SP of $2.30+ will be here.

[alokdhir]

Thank you for your post Winner. I’m sure a lot of people learning about HGH have taken lots of value from it, I certainly have.

Nothing like a SP spiraling out of control to focus peoples thoughts about a company. There have been some really good posts on this thread over the last few weeks.

For me HGH is a great dividend stock and yes puzzle is solved- it’s not a growth stock and that is why KFL wouldn’t touch it (a question I also asked). That NTA growth is very avg!

HGH have proven good quality credit risk and I think they price the risk (I.e. loans) really well. I think at todays SP for the long term you can’t go wrong. Collect the div and pick up a capital gain to at least keep your capital in line or ahead of inflation (in the long run).

For me an appropriate multiple to value this today is 1.2x NTA which is $1.44x1.2= $1.73 sp. I give it a below avg multiple because of these uncertain times we are in and this is what ANZ bank accepted for UDC in the June 2020 uncertain times. The buyer was big Japanese bank, Shinsei bank. The multiple these two big banks and all their advisors came up with must be considered fair (for uncertain times).

Now what the market does to the fair value SP of $1.73 is unknown but I am thinking in a capitulation event a 30% discount isn’t unreasonable for a very short period of time that could mean a crazy unreasonably low SP in the low $1.20s. Wow now that is back the truck up territory!

In the good times a 1.4x multiple is sure to came around again so Winners SP of $2 will be back one day and then in the great times a 1.6x or above multiple or SP of $2.30+ will be here.

Good post mate ! Very well balanced views about possibilities of SP of HGH keeping in perspective current market conditions from FA angle .

For me anything below 10% Gross yield ie below $ 1.53 becomes start buying all the way down ...wherever it may go in the short term slow or fast capitulation

So far $ 1.62 has supported as second support .

CNBC many experts pointed out that slow capitulation going on ...ie stocks going down slowly not fast 5% down index and fast recovery ....also chances of V shaped recovery from this kind of slow capitulation are low ....more reach bottom then sideways consolidation thus giving ample time to accumulate and also SP making a strong hands base too

[Rawz]

Good post mate ! Very well balanced views about possibilities of SP of HGH keeping in perspective current market conditions from FA angle .

For me anything below 10% Gross yield ie below $ 1.53 becomes start buying all the way down ...wherever it may go in the short term slow or fast capitulation

So far $ 1.62 has supported as second support .

CNBC many experts pointed out that slow capitulation going on ...ie stocks going down slowly not fast 5% down index and fast recovery ....also chances of V shaped recovery from this kind of slow capitulation are low ....more reach bottom then sideways consolidation thus giving ample time to accumulate and also SP making a strong hands base too

Cheers mate I agree with this approach of buying all the way down or if it goes the other way buy all the way up to 1.4x and then sit and see how high it can go..

Only way it can go very bad and capitulation imo is if a big international bank gets into trouble..

[winner69]

All Oz bank stocks (except ANZ) were down last month. Contrary to what some think I don't think the cap raise is the main reason For HGH share price decline - mainly just following the market

Ona Price/Book basis HGH still one of the higher valued stocks relative to OZ banks ... and above the average if you exclude CBA

Price/Book multiples below:

ANZ 1.00
WBC 1.04
NAB 1.51
BEN 0.64
BOQ 0.66
CBA 2.07
HGH 1.15

Average OZ exc CBA 0.97

[Rawz]

All Oz bank stocks (except ANZ) were down last month. Contrary to what some think I don't think the cap raise is the main reason For HGH share price decline - mainly just following the market

Ona Price/Book basis HGH still one of the higher valued stocks relative to OZ banks ... and above the average if you exclude CBA

Price/Book multiples below:

ANZ 1.00
WBC 1.04
NAB 1.51
BEN 0.64
BOQ 0.66
CBA 2.07
HGH 1.15

Average OZ exc CBA 0.97
Hey Winner why does some trade at such a discount and CBA trade at such a premium?

If I was to guess it’s due to different returns on equity (ROE)?

[winner69]

Hey Winner why does some trade at such a discount and CBA trade at such a premium?

If I was to guess it’s due to different returns on equity (ROE)?

ROE may have some bearing on relative valuations but CBA ROE is only 12%/13% so not much better than HGH's. CBA always had high multiples - possibly because it's and seen as the 'Bank of Australia' and safe as houses

Size is possibly another factor - smaller guys like BEN and BOQ lower multiples. There is a danger that as Heartland becomes more prominent in OZ it may be seen a banking minnow and rated accordingly .... thus continuing solid financial performance is essentail

[Muse]

Hey Rawz - your NTA query the other day might be better explained if I used how Heartlands Book Value (Shareholder Equity) has eveolved over the last 10 years.

At July 2012 BV was $375m / $0.96 a share. July 2022 BV was $808m / $1.36 share - BV per share has grown at 3.5% pa ....which doesn't seem right for a 'growth' company.

How has the $375m grown to $808m?

Additional shareholder capital of $258m has been put in - $158 from capital raises and $100m from the DRIP. There are 204m more shares than in 2012

In those 10 years profits were $601m and dividends of $416m were paid. Along with bit of other stuff (reserves etc) this means Retained Earnings (to fund growth) have increased by $176m

In summary - Heartland has $344m more capital than 10 years ago. Shareholders have put in another $258m over the 10 years and $175m of profits have been retained.

Jeff will see all this as a balancing act between making respectable returns (ROE), having sufficient capital and keeping shareholders happy.

Real invest managers will view / value Heartland on a Yield / Price Book multiple basis and possibly why not that many (growth?)funds don't seem to have in their portfolio.

Solid dividend yield but share price will likely continue to be 'suppressed' (not go up as fast as some expect) as essentially valued on that Price/Book basis where that Book Value not growing at a fast rate. But as we've seen that Price / Book ratio has ranged from below 1 to 1.9 over the last 5 years which has resulted in large swings in the share price

Of course the new $200m of capital has raided the Book Value to $1.44 - average P/B last 5 years has 1.4 so maybe $2.00 is a 'fair' valuation at the moment (with a bit of +/- over time eh)


Winner's book value per share calc (3.5% cumulative average growth rate) a bit disingenuous as its only one part of the puzzle...HGH's return on equity (NPAT over BV) has significantly increased over that period of time (from 6.3% in FY12 to 11.8% in FY22). That in turn has driven the much more meaningful growth in earnings per share.

EPS per share in FY12 was 6.1, in FY22 it was a smidge over 16. That's a 10 year compounded annual return in earnings per share of 10.2%. That's pretty good. Particularly for a bank.

EPS was only 2.4cps in FY11, so the EPS CAGR growth stats would look more impressive if set to that year rather than FY12, but I think it had a lot of one off transaction costs associated with the amalgamation of the group.

[winner69]

Agree FM - ROE and EPS have steadiy grown over time - and this has resulted in growing dividends

All good, no worries

But at then end of the day Book Value represents the 'value' of the company at any point in time and that has grown at 3.5% pa over last 10 years on a per share basis

Of course total returns toshare holders over time is what the company value has increased by PLUS dividends over time - and in total that's pretty good at around 9% pa

[winner69]

10 year HGH chart

Some might say its share price since 2017 has tarded in the 150/200 range with the odd spurt outside this range

I see the share price in a steady up trend (10 years plus) with the occasional bursts of 'irrational selling' and exuberant buying.

The slope of the dotted line is the equivalent to 12% pa .... and for traders there has been a couple of very big swings from low to highs .... and there's a few on this thread how have sold close to those 2017 and 2021 highs and bought at the 2020 lows

Might see share price over 2 bucks early next year?

[percy]

Thanks W69,and FM for your interesting observations.
Therefore:
$50,000 invested in a bond 10 years ago you would have received yearly interest, and your $50,000 would still be intact.
$50,000 invested in HGH shares 10 years ago you would have received yearly interest, and your $50,000 would have grown to $166,000.
And the difference works out to $11,600 per year,or over 10 years $116,000.Incredible.

"Always better to own the bank than have money in the bank"..lol

[BlackPeter]

10 year HGH chart

Some might say its share price since 2017 has tarded in the 150/200 range with the odd spurt outside this range

I see the share price in a steady up trend (10 years plus) with the occasional bursts of 'irrational selling' and exuberant buying.

The slope of the dotted line is the equivalent to 12% pa .... and for traders there has been a couple of very big swings from low to highs .... and there's a few on this thread how have sold close to those 2017 and 2021 highs and bought at the 2020 lows

Might see share price over 2 bucks early next year?

Great chart ... and yes, certainly a good time to buy for investors who prefer to buy low and sell dear :) ;

[Balance]

The time to buy HGH is when it is really really cheap - like 56c when I bought my first lot. That was a oncer however due to the GFC.

Getting the feeling we will get that opportunity to buy cheap again in the next 12 months.

[BlackPeter]

The time to buy HGH is when it is really really cheap - like 56c when I bought my first lot. That was a oncer however due to the GFC.

Getting the feeling we will get that opportunity to buy cheap again in the next 12 months.

As usual ... it depends.

Anybody who wants to have them in their portfolio can start buying now ... and sure, given that they are currently in a confirmed downtrend it might be a good idea to buy not all of them immediately, but spread the purchase somewhat out. Pretty sure that in a couple of years from now holders will be rather happy with the price they payed today.

Anybody who just wants to pick bottoms can happily wait until the confirmed bottom passed and then focus on the next bottom to miss.

Any trader probably would wait for some indicators flashing ... and yes, this is not now.

Will it go back to 56 cents? I don't know ... didn't predicted OCA at 40 cents (2.5 years ago) either, and I recon nobody else did. Just because a share was at some stage unreasonable cheap does not mean it will get there again.

[Muse]

All Oz bank stocks (except ANZ) were down last month. Contrary to what some think I don't think the cap raise is the main reason For HGH share price decline - mainly just following the market

Ona Price/Book basis HGH still one of the higher valued stocks relative to OZ banks ... and above the average if you exclude CBA

Price/Book multiples below:

ANZ 1.00
WBC 1.04
NAB 1.51
BEN 0.64
BOQ 0.66
CBA 2.07
HGH 1.15

Average OZ exc CBA 0.97

I get slightly different multiples to you - I think its important when talking about multiples to reference what date they relate to (IE, HGH has a 30 june year end and its FY22 year now complete, whereas ANZ, NAB, & WBC all run September YE's, and BOQ run august - none of which are finished yet and final BV's aren't available. But I presume you are referencing either the most recent YE for the 30 June YE's and the forecast P/B's for the one's who haven't release.

I disagree somewhat for the reason's behind the depreciation in HGH's share price. In my view, approximately 40% is due to a deterioration in market sentiment, and 60% due to very near term (next 12 months) deterioration in returns on equity.

In mid March 2022 I ran a screen on Australasian bank returns on equity, PE, and price to book multiples (calanderised one year forward), hyperlinked here: 14206

My new screen (based on closing prices from last Friday, and calendarised to 30 June 2023) are here: 14207

Between these two screens the average depreciation in comparable company ("CompCo") share price has been 11.4%, vs HGH's 19.8% decline (by way of reference, the last time I ran this screen was at $2.07 for HGH, which I thought was too high, let alone when it spiked much higher).

So what changed? Well, after the StockCo acquisition was announced the market was conditioned to expect it wound be funded by debt and thus EPS accretive. The actual result was the company would wholly fund it with equity, and in fact raise more capital than required for the purchase price alone to pad out growth capital reserves to grow it (and/or address some near term bond maturities). It's also my view that, in the absence of a competitive market or ignoring StockCos growth potential, HGH may have paid too much for it, which is proving to be dilutive in the short term. HGH ended it's FY22 year with ROE of 11.8%. But it likewise purchase StockCo for total consideration (totally equity funded) of ~$172m, producing an NPAT a full year proforma NPAT of $9.4m, or an implied return on equity of 5.5%. Whats more, the capital raised $198.6m or about $27m more than necessary to complete on the acquisition of StockCo, reducing ROEs.

Excluding the StockCo purchase, HGH actually beat its consensus ROE forecast for FY22, for a variety of reasons. But given the nature of the funding of StockCo, FY22's ROE of 11.8% is forecast to decline to 10.6% in FY23.

Why do I keep harping on about ROE? Because a books return on equity is singularly the most driver of valuation metrics for any bank or financial institutional group (FIG). The correlation between ROE and price to book is about the highest of any valuation correlation you will find any industry, and it that correlation in fact tightened since the last time I ran my screen. The "holy trinity" of bank valuation metrics consists of price to book, PE, and divy yield - but most are simply outcomes of the ROE produced by a book. Any regression analysis would show that the change in the share price of a bank/FIG set as the independent variable, together with dependent variables including ROE, yield, or PE, would time and again show ROE to have the highest correlation and lowest standard error, and thus the important driver to total shareholder returns. From my perspective, if someone wants to forecast their total future shareholder return, they are better to focus on ROE and how that will change over time, rather than look at the current yield, price to book, or PE, which are more often than not just outputs rather than drivers to total shareholder returns.

All this said, StockCo is not low growth company, and it was not an uncontested process. Heartland believe they can TRIPPLE the size of Stockco's book in 3 years, with sufficient funding They also believe they can improve cost of funding in australia by acquiring Avenue Bank and access lower cost deposit funds, thus dramatically decreasing cost of funds and improving returns on equity, all the while growing the book extremely fast. If reality is anywhere near projection, over the long term, this is a very good acquisition, but it will take years before it is realised in the share price.

In the short-medium term it's a bit much for the market to read through, let alone price on a sensible basis (the market is not a spreedsheet particularly during periods of sentiment volatility), thus market has focused on the short term dilution and diminution in ROE. and, ignoring all change in sentiment and geopolitical risk, that could happen again, when Avenue bank is acquired.

In the long term I think the move heartland is making is actually value accretive, but the market is punishing for that, and its being compounded by what is happening in the markets. So its sensible to layer a bit of TA to the fundamental analysis. The FA suggests its a good hold, the TA suggests do not buy (or watch your sell signals if you are a trader)...but if you have excess capital to deploy, and are patient and watch the TA but remain focused on the fundamentals, there could be some exceptional long term opportunities ahead as the stock becomes oversold.

None the less - and after a painful rebalancing - Heartland is screening quite well against its comparables. Relative to the line of best fit (the red line in my scatter plots), it is on the cheaper side of all three metrics. It's P/B and PE. relative to its ROE, are below the trend line. It's dividend yield relative to its ROE is above the trend line, which is a good thing. But its taken a painful realignment to result in this equilibrium.

That said - I have some strong views on how its ROE will evolve relative to its peers, as well as its growth in receivables, and when it will unfold. That won't matter to its share price for a while, and I'll be keeping that to myself and a few others for the time being.

[Rawz]

Thanks FM for your post! Gosh we are lucky to have you contributing in such detail!! I’d give you a rep but the computer says no.

The buying opportunity coming out of this downturn is going to amazing. Can buy in at low P/B and ride it out until it returns to long run avg. then you are hinting at expanding ROE which should translate to a higher P/B multiple. omg we are going to get catch up growth, actual growth and then expanding multiple growth. The triple crown. All the while collecting a handsome divvy.

Just need to time the entry and hope this bear doesn’t maul us. Wonder if these credit suisse bank failure rumors will scare punters off banks? It really shouldn’t affect HGH.

[winner69]

Good interesting stuff Fiordland Moose

Agree ROE and P/B are key metrics (more so than PE) for banks.

I’ve seen some interesting discussions around whether a bank can have a too high ROE, generally resulting from high leverage.

Heartland ROE 12% …pretax 17%. One commentator commentator said the answer to a question ‘have I got an investment for you, 17% return year after year ..interested? the answer in many cases would be ‘no, what’s the catch …….just too good to be true…sounds risky as’

[850man]

In today's Herald https://www.nzherald.co.nz/business/consumer-demand-for-personal-loans-spikes-as-households-feel-financial-squeeze/KPQSD5K5PZMHLABZZ3T4DP7MK4/ good news for HGH so long as it doesn't lead to defaults

[BlackPeter]

In today's Herald https://www.nzherald.co.nz/business/consumer-demand-for-personal-loans-spikes-as-households-feel-financial-squeeze/KPQSD5K5PZMHLABZZ3T4DP7MK4/ good news for HGH so long as it doesn't lead to defaults

It sounds like they are already falling back ...


Households were increasingly falling behind on their car loans, with the proportion of accounts in arrears rising for the fifth consecutive month to 4.8 per cent - which is the highest level in nearly two years.

Not sure whether HGH has still a car loan book, but I recon for the sorts of TRA is this a concerning development - and I suspect that consumers taking credit just to pay their debts are not better payers than consumers needing a loan to buy a car.

[Muse]

Good interesting stuff Fiordland Moose

Agree ROE and P/B are key metrics (more so than PE) for banks.

I’ve seen some interesting discussions around whether a bank can have a too high ROE, generally resulting from high leverage.

Heartland ROE 12% …pretax 17%. One commentator commentator said the answer to a question ‘have I got an investment for you, 17% return year after year ..interested? the answer in many cases would be ‘no, what’s the catch …….just too good to be true…sounds risky as’

Catching up sharetrader - had lots on this last week

Yes I agree W69 - a lot of things look good in a spreadsheet until reality throws a curve ball.

Thankfully thats where the RBNZ and RBA come in with capital adequacy requirements which create some natural constraints around returns on equity. These mandated requirements have been recently lifted though there is a phased transition to reach them. HGH quite a long way ahead of where they need to be at this point in time but have further to go before they are satisfied and with whatever level of buffer HGH believe necessary. The toolkit available to meet them include: the DRP (which nets around 20m pa), grow npat while retaining payout % (resulting in increase retained earnings), lower dividend yield particularly if earnings growth does not eventuate, or raise capital (and various permutations from there).

while I'm comfortable w/ HGH's trajectory it always amazes me this never gets raised on this forum - such a critical driver yet discussion blathers on about milk prices or what not.

the deposit takers insurance scheme currently under leglisation another thing I dont think I've seen mentioned on this board before

[alokdhir]

https://www.nzx.com/announcements/400432

Is it a downgrade or nothing much ?? Experts please help

[trader_jackson]

Its a downgrade and nothing much, although not a great look 1 month after raising capital at $1.80 (or about that) to come out and say there's (already) an impact on profit, explains why the share price has continued to slide (almost 10% from the already discounted capital raising price)

[winner69]

https://www.nzx.com/announcements/400432

Is it a downgrade or nothing much ?? Experts please help

De-designation is painful eh …but doesn’t affect underlying earnings so no worries

But if you don’t like HGH it’s a disaster

[alokdhir]

De-designation is painful eh …but doesn’t affect underlying earnings so no worries

But if you don’t like HGH it’s a disaster

Banker's accounting objected or de designated by Auditors is a bigger disaster ...IMHO ...Colourful accounting keeps meeting guidance ....perfect example of run to the hills ....lol

[BlackPeter]

https://www.nzx.com/announcements/400432

Is it a downgrade or nothing much ?? Experts please help

It is a clarification. They had in past years some non-cash gains through re-evaluations, and these might in the current climate melt away.

Something like a long term house owner who previously disclosed that his house value increased over the last 10 years by 100%, now disclosing that it dropped over the last 6 months by 10%.

Same house, same income opportunities, just the re-sale value did slightly drop (as you would expect in the current downturn).

[winner69]

‘Gained $16.7m from these de-designation last year which to a large degree offset the $12.7m writedown in Harmoney investment.

A signal that Harmoney might go up $6.6m this year to offset the de-designation …..or Harmoney might go up even more and then we are ahead

[winner69]

Marked price sensitive so a downgrade and will see share price go down.

[winner69]

Not a good look though …..seems some ‘discussions’ with Auditors on last years accounts and then Jeff’s team didn’t really grasp the full implications of the de-designation so a clarification needed.

Jeff losing his touch? Maybe a guru NZ banker but when it comes to being a global banker it’s a different and more difficult game.

Did concern me that after so many years of not doing so that they have started playing this underlying profit game…..which along with proactive provisioning has smoothed profits.

Confidence in Jeff down a notch …..hope he doesn’t start not doing what he said he’d do.

[winner69]

Still got that $8m Economic Overlay provision in his bottom drawer …..hopefully not needed

[Rawz]

Winner69 what's your early 2023 price target now? What was it before- $2.20 per share?

Have you downgraded or is it no worries for now?

[Rawz]

alokdhir whats your new price target? what was it before 9x earnings $1.45?

[Muse]

Regarding guidance, I think heartland actually has one of the easier gigs in forecasting their business over the next 12 months, at an operational & pre movement in provision basis, and is why they have one of the better track records of meeting guidance on the NZX. Their income is contracted and mostly at fixed rates, the majority of the warehouse/ABS interest costs are hedged, and deposit unhedged but relatively inelastic and predictable. They have a very good handle on fixed costs. They will be very intune to the run rate in originations and book growth, but its the book in place at the beginning of the year rather than the originations added to it through out the year that underpins the annual group result. In terms of actual incurred credit losses incurred during the year, the nature of their receivables is still quite benign for the next 12 months but they will be quite alive to the run rate and how that is evolving.

The things that have the potential to markedly swing the results come in at year end, are non cash and accounting related, and more difficult to forecast.

The first is the provision for all future expected credit losses. The company obviously incurs some credit losses during the year, but then at year end, it has to decide of its gross book of ~$1bn, what are the total credit losses expected over the life of those receivables, and net that figure off gross receivables. The movement in the provision from the prior year to the ending position threads through the P&L as an expense. FIGS have well established econometric models that forecast those losses and they still require input assumptions, which are usually the consensus estimate from professional economists on the near/medium term outlook for things like unemployment, GDP, wage growth, etc (but mainly unemployment). At 30 June, hgh mgmt will have waited until the last minute to get those forecasts, agree them with their internal risk committee & socialise it with their auditors, then thread them through the model. But in issuing guidance they have to think about how that consensus might change in 12 months - and how the provision rate % might change, which forms part of their guidance range, and is something they just dont have much control over).

The other tricky thing is the effectiveness of hedge accounting which is too boring to talk about

looks like hedge accounting may be of more interest to talk about now

[Rawz]

looks like hedge accounting may be of more interest to talk about now

Nice one FM. Always thinking about the more technical aspects.

What are they exactly hedging? Is it their cost of funds? Playing the swaps short term vs long term lending? something like that? or way off?

I understand banks/finance company's well enough but ill put my hand up and say i dont exactly understand 100% what this announcement is about, I get the gist of it. And maybe some other readers are in the same boat.

[alokdhir]

alokdhir whats your new price target? what was it before 9x earnings $1.45?

I am not expert enough to have targets mate ...but I do have my target price where it becomes kind of compelling buy based on yield and ie $ 1.53 ( 10% Gross )

As discussed earlier will start adding from 1.53 downwards till my tummy full or it stops going down further ...lol

[Snow Leopard]

Hedging 101:
https://cdn.psychologytoday.com/sites/default/files/styles/image-article_inline_full/public/blogs/34279/2014/09/160610-164993.jpg

[Rawz]

SP all good. Up 2 cents. Not sure what all the fuss was about

[Muse]

Nice one FM. Always thinking about the more technical aspects.

What are they exactly hedging? Is it their cost of funds? Playing the swaps short term vs long term lending? something like that? or way off?

I understand banks/finance company's well enough but ill put my hand up and say i dont exactly understand 100% what this announcement is about, I get the gist of it. And maybe some other readers are in the same boat.

Delving into the technical here and hedge accounting on the outer periphery of complex but was only a matter of time this became topical given the gain they recognised in FY22

Loads of companies hedge various aspects of their business. Exporters hedging through currency contracts, corporates with high debt burdens hedging their interest rate expense (ie fix it), banks doing the same on their borrowing costs. All normal stuff and this an "economic hedge" of what they are trying to achieve. An agri exporter might fix a big chunk of currency exposure based on some BOE estimate of what they expect their foreign currency receipts might be over some future period. And the fx contract on their book may flop about / ie be revalued again and again (threading through the P&L) until it is exercised when it is used.

But for a bank they are often hedging for a specific contract - say the money they borrowed to write a loan - where they know the exact principal and duration. Hedge accounting seeks to do away with that "flopping about" in the FMV of the interest rate contract by pairing both the underlying activity and the hedged contract. It takes out a lot of the volatility. In order for a hedged exposure to qualify for hedge accounting there are a few hurdles the company has to jump through, mainly: the purpose of the hedge and corresponding activity (in this case heartlands borrowing) have to be explicitly documented at the time the hedge is taken out so the accounting between the two can be paired going forward, going forward the hedge needs to work more or less as documented (ie if you did some new fancy exotic hedging that didnt work the way you thought it couldn't continue to be hedge accounted).

Heartland have been hedge accounting for some time. Last year they derecoginised (or in their terms de-designated) some swaps from hedge accounting. I understood from the conference call these related to swaps paired again borrowing to fund their premium saver products. I do not recall why they were de designated. If I had to guess - it would be that the hedging was over too broad a category and not specifically granular to link it to individual activities. But there could be other reasons. I am not sure but its possible HGH could voluntarily even withdraw specific contracts from hedge accounting. More on that below.

The net impact of this was a $16.7m gain - which was effectively a pull forward of the profits that would have been recognised in the normal course of business over the next 3 years. A cynic could wonder if the de-registration that resulted in this gain was implemented to augment statutory npat for FY22, given all that was going on. In that respect useful to remember the de-designation was for a handful of swaps relating to saver products which I can think of a technical reason for why they weren't included. The other thing is for HGH's presentation of their underlying financial results they took the gain out for underlying purposes.

The note this morning I thought was both cryptic and awfully specific around the $6.6m impact of hedge accounting. In the conference call they talked to the FY22 de-designation pulling forward 3 years of interest rate related net impact from those contracts - I wonder if the $6.6m is simply the corresponding amount for year 1. I also wonder if when they released their guidance perhaps they did it on the basis those hedges were still in place. Or rather because certain contracts had been hedge accounted there is an accounting requirement in subsequent periods to show the the income that would have been if they had been left in place, but as a negative adjustment. Or some variation of this accounting adjustment - its way above my pay grade.


It's pretty fuzzy. HGH have tried to keep a technical issue succinct but a few questions left.

and ultimately having to qualify guidance issued only a month or so earlier is never desirable.

[Muse]

Hedging 101:
https://cdn.psychologytoday.com/sites/default/files/styles/image-article_inline_full/public/blogs/34279/2014/09/160610-164993.jpg

nailed it.

[winner69]

SP all good. Up 2 cents. Not sure what all the fuss was about

And in a years time after they’ve reported $120m profit and share price is:$2.38 we’ll ask again what was all the fuss about avyearvago.

[Rawz]

Delving into the technical here and hedge accounting on the outer periphery of complex but was only a matter of time this became topical given the gain they recognised in FY22

Loads of companies hedge various aspects of their business. Exporters hedging through currency contracts, corporates with high debt burdens hedging their interest rate expense (ie fix it), banks doing the same on their borrowing costs. All normal stuff and this an "economic hedge" of what they are trying to achieve. An agri exporter might fix a big chunk of currency exposure based on some BOE estimate of what they expect their foreign currency receipts might be over some future period. And the fx contract on their book may flop about / ie be revalued again and again (threading through the P&L) until it is exercised when it is used.

But for a bank they are often hedging for a specific contract - say the money they borrowed to write a loan - where they know the exact principal and duration. Hedge accounting seeks to do away with that "flopping about" in the FMV of the interest rate contract by pairing both the underlying activity and the hedged contract. It takes out a lot of the volatility. In order for a hedged exposure to qualify for hedge accounting there are a few hurdles the company has to jump through, mainly: the purpose of the hedge and corresponding activity (in this case heartlands borrowing) have to be explicitly documented at the time the hedge is taken out so the accounting between the two can be paired going forward, going forward the hedge needs to work more or less as documented (ie if you did some new fancy exotic hedging that didnt work the way you thought it couldn't continue to be hedge accounted).

Heartland have been hedge accounting for some time. Last year they derecoginised (or in their terms de-designated) some swaps from hedge accounting. I understood from the conference call these related to swaps paired again borrowing to fund their premium saver products. I do not recall why they were de designated. If I had to guess - it would be that the hedging was over too broad a category and not specifically granular to link it to individual activities. But there could be other reasons. I am not sure but its possible HGH could voluntarily even withdraw specific contracts from hedge accounting. More on that below.

The net impact of this was a $16.7m gain - which was effectively a pull forward of the profits that would have been recognised in the normal course of business over the next 3 years. A cynic could wonder if the de-registration that resulted in this gain was implemented to augment statutory npat for FY22, given all that was going on. In that respect useful to remember the de-designation was for a handful of swaps relating to saver products which I can think of a technical reason for why they weren't included. The other thing is for HGH's presentation of their underlying financial results they took the gain out for underlying purposes.

The note this morning I thought was both cryptic and awfully specific around the $6.6m impact of hedge accounting. In the conference call they talked to the FY22 de-designation pulling forward 3 years of interest rate related net impact from those contracts - I wonder if the $6.6m is simply the corresponding amount for year 1. I also wonder if when they released their guidance perhaps they did it on the basis those hedges were still in place. Or rather because certain contracts had been hedge accounted there is an accounting requirement in subsequent periods to show the the income that would have been if they had been left in place, but as a negative adjustment. Or some variation of this accounting adjustment - its way above my pay grade.


It's pretty fuzzy. HGH have tried to keep a technical issue succinct but a few questions left.

and ultimately having to qualify guidance issued only a month or so earlier is never desirable.

Thank you for sharing your wisdom. I had to read your post twice to fully absorb it! Sorry i cant give you a rep for it i need to share it around.
This hedge accounting has never been an issue in the past... Like you say never was discussed on here.

https://www.investopedia.com/terms/h/hedge-accounting.asp good old investopedia explanation for anyone wanting to expand their knowledge on hedge accounting as i have done this morning.

[Muse]

Thank you for sharing your wisdom. I had to read your post twice to fully absorb it! Sorry i cant give you a rep for it i need to share it around.
This hedge accounting has never been an issue in the past... Like you say never was discussed on here.

https://www.investopedia.com/terms/h/hedge-accounting.asp good old investopedia explanation for anyone wanting to expand their knowledge on hedge accounting as i have done this morning.

went and had a peruse of the annual report released a few weeks ago . blurb on why the swaps were de-designated

"A $16.7m gain was recognised in relation to derivatives that were de-designated from hedge accounting relationships. Heartland's hedging strategy was economically very effective throughout FY22, with interest rate swaps utilised to hedge fixed lending with tenors greater than 12 months to 3 month bank bill reference rates, thus limiting volatility to future interest rate changes. However, 3 month BKBMs ceased to be an identifiable risk for hedging relationships during FY22. This resulted in balances held in the Cash Flow Hedge Reserve against these hedge relationships having to be released to the profit and loss for the 30 June 2022 period."

just goes to show you the havoc ever changing accounting treatments have in understanding financial results. Think I understand it but is a moot point - its more what the accounting entries are going forward that matters - but anyway HGH and the analysts will just chuck it below operating earnings anyway.

[Rawz]

‘Gained $16.7m from these de-designation last year which to a large degree offset the $12.7m writedown in Harmoney investment.

A signal that Harmoney might go up $6.6m this year to offset the de-designation …..or Harmoney might go up even more and then we are ahead

And if Harmoney doesnt go up they can use the economic overlay.
Then rely on Harmoney for FY24 bag of tricks

[winner69]

Global Dairy Prices down overnight ...been trending down since March with a couple of up periods in May and September

Could mean HGH share price could drift down a bit more --- tends to follow dairy prices with a bit of a lag

[alokdhir]

Global Dairy Prices down overnight ...been trending down since March with a couple of up periods in May and September

Could mean HGH share price could drift down a bit more --- tends to follow dairy prices with a bit of a lag

If the rates actually reach where market is expecting it ie 5.5% or more and stay there longer then surely deep recession on the cards second half 2023 ...if that theme catches traction then that will be bigger worry for HGH SP then just dairy prices trending down ...what do u think mate ?

[winner69]

If the rates actually reach where market is expecting it ie 5.5% or more and stay there longer then surely deep recession on the cards second half 2023 ...if that theme catches traction then that will be bigger worry for HGH SP then just dairy prices trending down ...what do u think mate ?

Dropping dairy prices could be signalling his deeprecession you talk about

Three main economic drivers in NZ are the 3Cs -- Currency, Commodity prices and Climate -- put those into a model and you get a pretty good feel for where theeconomy is going

Currency OK, Commodity prices still relativity high and SMD not a problem

As long as the grass stays green and producers getting good prices we'll be OK for a while

[percy]

The global dairy trade (GDT) index slumped by 4.6% overnight, with whole milk powder (WMP) falling 4.2% and skim milk powder dragging even further behind, dropping by 6.9%.

ASB’s Nathaniel Keal had one word in mind when summing up the GDT update: soggy.

“We’ve had a pretty soggy GDT overnight,” he wrote in an ASB rural economic report this afternoon.

He said the upward slope of the contract curve didn’t point to prices falling away “dramatically” but prices had lost part of the upward force they’d tentatively shown at the start of spring.

“Over the medium term, we just don’t think there will be enough supply to meet demand, and that should be a boon for dairy prices,” he said.

“Add a very weak New Zealand dollar into the mix and it’s a positive outlook for farmgate returns.”

[Baa_Baa]

Market stills seems to hate the cap raise in August, look what happened compared to the large listed banks (https://invst.ly/z8-8i) around the same time; they're powering ahead and HGH is still getting a hammering

[ithaka]

HGH
20/10/2022 09:54
TRANSACT
PRICE SENSITIVE
REL: 0954 HRS Heartland Group Holdings Limited


TRANSACT: HGH: Heartland to purchase Challenger Bank in Australia


NZX/ASX release
20 October 2022


Heartland to purchase Challenger Bank in Australia, and provides lending
growth update


Entry into acquisition documentation for Challenger Bank
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to
announce that it has signed a conditional share purchase agreement for the
purchase of Challenger Bank Limited (Challenger Bank) from Challenger Limited
(ASX: CGF). The share purchase agreement is subject to obtaining the
requisite regulatory approvals.


Based in Melbourne, Australia, Challenger Bank is an established authorised
deposit-taking institution (ADI) which offers customers a range of savings
and lending products. Challenger Bank's products include
government-guaranteed retail term deposits and home loans - its system is
also capable of Reverse Mortgage origination. As at 30 June 2022, Challenger
Bank had A$89 million of retail lending, A$17 million of corporate lending
and A$228 million of deposits.


Subject to completion, Heartland's existing Reverse Mortgage and Livestock
businesses in Australia will be transferred to sit in or under Challenger
Bank. The opportunity to grow these existing businesses in Australia either
as part of a bank or a broader banking group is significant. Challenger Bank
also affords further opportunities to expand Heartland's best or only
products into Australia.


For regulatory reasons, Heartland will be required to hold Challenger Bank
through an Australian incorporated non-operating holding company (NOHC) which
is approved and regulated by the Australian Prudential Regulatory Authority
(APRA). It is anticipated that Heartland's top-level holding company in
Australia, Heartland Australia Holdings Pty Limited (HAH), would be the
appropriate vehicle to apply to APRA for authority to act as a NOHC.
Heartland continues to engage with the Reserve Bank of New Zealand (RBNZ) to
obtain consent for HAH to also act as the NOHC of Heartland Bank Limited in
New Zealand. Completion of the transaction is also conditional upon consent
under the Financial Sector (Shareholdings) Act.


The consideration payable by Heartland on completion is expected to be
approximately A$36 million, subject to adjustments for net assets delivered
at completion. Heartland's intention is to cover the costs of the acquisition
through existing resources.


Strategic rationale
Heartland's strategic objective for expansion in Australia requires the
establishment or acquisition of an ADI. Becoming a bank through an ADI in
Australia would make possible a number of benefits:
o access to a deep and efficient pool of funding to support ongoing growth;
o potential uplift in margin, to the extent that retail funding rates are
less than wholesale rates; and
o providing a platform to extend Heartland's best or only strategy into
Australia.


The aim is to create a digital bank which, once Heartland assets are
transferred to it, will be profitable. This, together with Heartland's best
or only strategy, provides the opportunity for a differentiated proposition.


On 23 August 2022, Heartland announced it had entered into a non-binding
memorandum of understanding with Avenue Hold Limited (Avenue Hold) for the
potential acquisition of Avenue Hold and Avenue Bank Limited (Avenue Bank), a
restricted ADI. Following that announcement, Heartland continued due
diligence and negotiation of binding transaction documentation with Avenue
Hold.


Since then, market conditions have changed. Heartland also became aware of
Challenger Bank as an alternative opportunity. Heartland Board's assessment
is that Challenger Bank is a stronger acquisition opportunity for Heartland's
execution of its strategic objective for growth in Australia as it offers a
full ADI licence. Challenger Bank has also recently undertaken a programme of
significant investment to build out its digital capability, which fits with
Heartland's digitalisation strategy.


Heartland has accordingly advised Avenue Hold that it will no longer be
exploring the potential acquisition opportunity previously disclosed, and has
discontinued due diligence and negotiations. Heartland made an initial
subscription for A$5 million of capital (circa 11%) in Avenue Hold. No
decision has been made on the future of this shareholding. For accounting
purposes, this investment is classified as fair value through other
comprehensive income, with any change in value not impacting Heartland's net
profit after tax.


Heartland was advised by Corrs Chambers Westgarth, Deloitte and Jarden in
relation to the acquisition.


Business update
The first quarter of the financial year ending 30 June 2023 (1Q2023) has seen
growth across key lending portfolios of Reverse Mortgages, Motor and Asset
Finance.


Reverse Mortgages in both New Zealand and Australia maintained strong growth
momentum, recording 24.4% and 19.3% annualised growth in 1Q2023 respectively.
The Motor portfolio is starting to return to growth levels seen before the
New Zealand Credit Contracts and Consumer Finance Act 2003 and the Credit
Contracts and Consumer Finance Regulations 2004 (CCCFA) were amended with
effect from 1 December 2021, recording 7.8% annualised growth in 1Q2023.
Asset Finance recorded annualised growth of 10.3% in 1Q2023.


Other areas are performing satisfactorily, noting that the Livestock lending
season has only just commenced.


- ENDS -

[bull....]

so there buying a loss making business lol
hope it works out

[Muse]

twist.

smaller initial outlay than avenue bank. Intention to fund acquisition from existing resources. but curious they only became aware of challenger after going down the avenue bank route. good originations update. bit flippity floppity feel to the change up in acquisition though.

[Rawz]

Challenger Banks net assets are approximately $25m.
So HGH paying 1.32x

Seems fair

[Rawz]

Challenger Banks net assets are approximately $25m.
So HGH paying 1.32x

Seems fair

maybe a bit higher multiple if you factor in the $5m shareholding its put with Avenue Hold. Cant imagine its worth that now..?

[Bjauck]

Market stills seems to hate the cap raise in August, look what happened compared to the large listed banks (https://invst.ly/z8-8i) around the same time; they're powering ahead and HGH is still getting a hammering On the other hand, I feel the HGH had got a bit too hyper-inflated compared to the big Aussies, and that the negative vibes over the capital raising was the prick that deflated the price. A Sharesight calculation including dividends has HGH performing midway between ANZ and WBC since 1/1/2020

[percy]

HGH
20/10/2022 09:54
TRANSACT
PRICE SENSITIVE
REL: 0954 HRS Heartland Group Holdings Limited


TRANSACT: HGH: Heartland to purchase Challenger Bank in Australia


NZX/ASX release
20 October 2022


Heartland to purchase Challenger Bank in Australia, and provides lending
growth update


Entry into acquisition documentation for Challenger Bank
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to
announce that it has signed a conditional share purchase agreement for the
purchase of Challenger Bank Limited (Challenger Bank) from Challenger Limited
(ASX: CGF). The share purchase agreement is subject to obtaining the
requisite regulatory approvals.


Based in Melbourne, Australia, Challenger Bank is an established authorised
deposit-taking institution (ADI) which offers customers a range of savings
and lending products. Challenger Bank's products include
government-guaranteed retail term deposits and home loans - its system is
also capable of Reverse Mortgage origination. As at 30 June 2022, Challenger
Bank had A$89 million of retail lending, A$17 million of corporate lending
and A$228 million of deposits.


Subject to completion, Heartland's existing Reverse Mortgage and Livestock
businesses in Australia will be transferred to sit in or under Challenger
Bank. The opportunity to grow these existing businesses in Australia either
as part of a bank or a broader banking group is significant. Challenger Bank
also affords further opportunities to expand Heartland's best or only
products into Australia.


For regulatory reasons, Heartland will be required to hold Challenger Bank
through an Australian incorporated non-operating holding company (NOHC) which
is approved and regulated by the Australian Prudential Regulatory Authority
(APRA). It is anticipated that Heartland's top-level holding company in
Australia, Heartland Australia Holdings Pty Limited (HAH), would be the
appropriate vehicle to apply to APRA for authority to act as a NOHC.
Heartland continues to engage with the Reserve Bank of New Zealand (RBNZ) to
obtain consent for HAH to also act as the NOHC of Heartland Bank Limited in
New Zealand. Completion of the transaction is also conditional upon consent
under the Financial Sector (Shareholdings) Act.


The consideration payable by Heartland on completion is expected to be
approximately A$36 million, subject to adjustments for net assets delivered
at completion. Heartland's intention is to cover the costs of the acquisition
through existing resources.


Strategic rationale
Heartland's strategic objective for expansion in Australia requires the
establishment or acquisition of an ADI. Becoming a bank through an ADI in
Australia would make possible a number of benefits:
o access to a deep and efficient pool of funding to support ongoing growth;
o potential uplift in margin, to the extent that retail funding rates are
less than wholesale rates; and
o providing a platform to extend Heartland's best or only strategy into
Australia.


The aim is to create a digital bank which, once Heartland assets are
transferred to it, will be profitable. This, together with Heartland's best
or only strategy, provides the opportunity for a differentiated proposition.


On 23 August 2022, Heartland announced it had entered into a non-binding
memorandum of understanding with Avenue Hold Limited (Avenue Hold) for the
potential acquisition of Avenue Hold and Avenue Bank Limited (Avenue Bank), a
restricted ADI. Following that announcement, Heartland continued due
diligence and negotiation of binding transaction documentation with Avenue
Hold.


Since then, market conditions have changed. Heartland also became aware of
Challenger Bank as an alternative opportunity. Heartland Board's assessment
is that Challenger Bank is a stronger acquisition opportunity for Heartland's
execution of its strategic objective for growth in Australia as it offers a
full ADI licence. Challenger Bank has also recently undertaken a programme of
significant investment to build out its digital capability, which fits with
Heartland's digitalisation strategy.


Heartland has accordingly advised Avenue Hold that it will no longer be
exploring the potential acquisition opportunity previously disclosed, and has
discontinued due diligence and negotiations. Heartland made an initial
subscription for A$5 million of capital (circa 11%) in Avenue Hold. No
decision has been made on the future of this shareholding. For accounting
purposes, this investment is classified as fair value through other
comprehensive income, with any change in value not impacting Heartland's net
profit after tax.


Heartland was advised by Corrs Chambers Westgarth, Deloitte and Jarden in
relation to the acquisition.


Business update
The first quarter of the financial year ending 30 June 2023 (1Q2023) has seen
growth across key lending portfolios of Reverse Mortgages, Motor and Asset
Finance.


Reverse Mortgages in both New Zealand and Australia maintained strong growth
momentum, recording 24.4% and 19.3% annualised growth in 1Q2023 respectively.
The Motor portfolio is starting to return to growth levels seen before the
New Zealand Credit Contracts and Consumer Finance Act 2003 and the Credit
Contracts and Consumer Finance Regulations 2004 (CCCFA) were amended with
effect from 1 December 2021, recording 7.8% annualised growth in 1Q2023.
Asset Finance recorded annualised growth of 10.3% in 1Q2023.


Other areas are performing satisfactorily, noting that the Livestock lending
season has only just commenced.


- ENDS -
All extremely positive.
ps.
Bank shares have been moving up, as increasing interest rates mean their net interest margin will be increasing.
HGH with the highest bank NIM appears to have been [temporary] overlooked by the market.

[BlackPeter]

All extremely positive.
ps.
Bank shares have been moving up, as increasing interest rates mean their net interest margin will be increasing.
HGH with the highest bank NIM appears to have been [temporary] overlooked by the market.

Yes, growth is normally positive.

Somewhat concerned though by their suggestion that they plan not just to add their Australian wing to Challenger but turn the lot into a digital bank (which might be easier for people who know how to do that).

Given the feedback Heartland receives quite regularly (as well here) on their digital readiness and the quality of their user interface am I wondering, whether they first should learn to walk themselves before they try to teach others?

Anyway - maybe Challenger comes with some concealed digital specialists :) ;

[RTM]

And we know how well our ventures go in Oz. Look at our girls last night.

Really hope they have got this one right…. Used to be a too big % of our portfolio. Now about right, but not enjoying the process used to adjust it.


Yes, growth is normally positive.

Somewhat concerned though by their suggestion that they plan not just to add their Australian wing to Challenger but turn the lot into a digital bank (which might be easier for people who know how to do that).

Given the feedback Heartland receives quite regularly (as well here) on their digital readiness and the quality of their user interface am I wondering, whether they first should learn to walk themselves before they try to teach others?

Anyway - maybe Challenger comes with some concealed digital specialists :) ;

[Rawz]

All extremely positive.
ps.
Bank shares have been moving up, as increasing interest rates mean their net interest margin will be increasing.
HGH with the highest bank NIM appears to have been [temporary] overlooked by the market.

Fisher fund gurus have Westpac, ANZ, NAB and CBA in their barramundi portfolio. They have overlooked HGH like you say.

Wonder if HGH will get a seat at the fisher funds dinner table one day?

[alokdhir]

Fisher fund gurus have Westpac, ANZ, NAB and CBA in their barramundi portfolio. They have overlooked HGH like you say.

Wonder if HGH will get a seat at the fisher funds dinner table one day?

I wonder many here rooting for or expecting 6% OCR which almost sure shot calling for Big recession ahead but still hopeful of HGH reaching $ 2.40 next year ...How both wishes will come true ? Beats me .

PS : Last week was turning point for KFL ...in one week it went from 6% premium to 6% discount ...wow ...thats some capitulation we were waiting for ...I am pretty excited about its prospects ahead ...next year ie before people remind me more downside possible in near term ...yes I agree and I want it ...atleast till 1.20

[percy]

Fisher fund gurus have Westpac, ANZ, NAB and CBA in their barramundi portfolio. They have overlooked HGH like you say.

Wonder if HGH will get a seat at the fisher funds dinner table one day?

The Trust I am a trustee of holds NAB and WBC shares, and ANZ,HGH and WBC bonds.
My wife and I both hold HGH shares.
Neither the trust,my wife or I hold any Fisher Funds products,although they are "well positioned" with their bank holdings..

[SCOTTY]

First quarter update looks good: Strong annualised reverse mortgage growth. Motor and asset portfolio growth and other areas performing satisfactorily

[winner69]

Aussie banks creaming it

Hope market responds favourably - might flow over to HGH share price

Market eyes ‘purple patch’ for banks, tipping $28b in profits


https://www.smh.com.au/business/banking-and-finance/market-eyes-purple-patch-for-banks-tipping-28b-in-profits-20221021-p5brss.html

[alokdhir]

Aussie banks creaming it

Hope market responds favourably - might flow over to HGH share price

Market eyes ‘purple patch’ for banks, tipping $28b in profits


https://www.smh.com.au/business/banking-and-finance/market-eyes-purple-patch-for-banks-tipping-28b-in-profits-20221021-p5brss.html

What have u done W69 ? Down 4% !!! Dont tell me bounce is over ...whats the buzz ?

[winner69]

May have something to do with the NZ Shareholders Ass saying the Heartland Board had died with covid and been been replaced with avatars (because they never seem to front in person) ..... and that more capital raises will be needed

[alokdhir]

May have something to do with the NZ Shareholders Ass saying the Heartland Board has been replaced with avatars (because they never seem to front in person) ..... and that more capital raises will be needed

Thats no good . They just got $ 200 Mil at 1.80 ...next will be at ??

[Rawz]

MORE capital raises??? omg please no.

Have you got a link W69?

[percy]

Aussie banks creaming it

Hope market responds favourably - might flow over to HGH share price

Market eyes ‘purple patch’ for banks, tipping $28b in profits


https://www.smh.com.au/business/banking-and-finance/market-eyes-purple-patch-for-banks-tipping-28b-in-profits-20221021-p5brss.html

And to think I thought that article would see HGH's share price up 7 cents today to $1.82.
Wrong again...lol

[Muse]

MORE capital raises??? omg please no.

Have you got a link W69?

Winner you got a source for that or you just doing your thing?

[winner69]

Winner you got a source for that or you just doing your thing?

Sorry I don't know how to link a conversation with an acquaintance .... and I didn't record it

Only a matter of time is the gossip / speculation ....probably not before Christmas but early next year

[winner69]

And to think I thought that article would see HGH's share price up 7 cents today to $1.82.
Wrong again...lol

I thought so as well percy

Maybe HGH don't follow the Oz bank stocks anymore

[Muse]

Sorry I don't know how to link a conversation with an acquaintance .... and I didn't record it

Only a matter of time is the gossip / speculation ....probably not before Christmas but early next year

Wait - an acquaintance you were talking to ragged on the board & said capital raising was coming? You said the Shareholders Association. Was your acquaintance speaking on behalf of the shareholders association?

Just trying to understand

[winner69]

Wait - an acquaintance you were talking to ragged on the board & said capital raising was coming? You said the Shareholders Association. Was your acquaintance speaking on behalf of the shareholders association?

Just trying to understand

Was having a coffee with a mate - he not a NZSA spokesman but could be a member but I don't know - he told me he heard NZSA had said something about the avatars ...... and then after laughing at that avatar story we continued talking about Heartland we agreed another capital raise was inevitable ..... based on talk on the street and all that sort of stuff

So no worries .... don't fret ..... pure speculation at this stage .... as most things are .... but possibly will need to say 'I told you so' some time in the future

[iceman]

Winner you got a source for that or you just doing your thing?

Written by NZSA member Bruce Parker just criticising the ASM being "hybrid" only as announced back on 5 August.

But the Editor finished of by saying this:
"In Heartland’s defence, however, they contacted NZSA prior to their announcement on August 5th, outlining their reasons. The key advice they received was to disclose their reasons. In retrospect, the advice offered by NZSA would have been different – to plan for both, and ‘cancel’ the physical component should Covid-19 be a significant factor. Our apologies to all – including to Heartland."

[Muse]

Written by NZSA member Bruce Parker just criticising the ASM being "hybrid" only as announced back on 5 August.

But the Editor finished of by saying this:
"In Heartland’s defence, however, they contacted NZSA prior to their announcement on August 5th, outlining their reasons. The key advice they received was to disclose their reasons. In retrospect, the advice offered by NZSA would have been different – to plan for both, and ‘cancel’ the physical component should Covid-19 be a significant factor. Our apologies to all – including to Heartland."

Good one thanks Iceman. 5th august. Not some new announcement as was implied for being responsible for todays share price movement.

[beetills]

Anyone seen the article on INTEREST.CO today regarding HGH or is this what you are referring to above.

[Swala]

Anyone seen the article on INTEREST.CO today regarding HGH or is this what you are referring to above.

Paywalled unfortunately.

[Rawz]

Everyone needs to switch on their HGH dividend reinvestment plan otherwise W69 is going to be saying, "told you so" :(

[Muse]

Everyone needs to switch on their HGH dividend reinvestment plan otherwise W69 is going to be saying, "told you so" :(

Lol yes - after he read about jardens research in the herald. They could well raise more capital in they push hard in AU.

I was just confused by the NZ Association claim - if it was a new announcement or position they had just taken that caused the dip today (as he implied), if it was was just an older piece of news that was still on people’s minds, or just winner having his usual fun

[alokdhir]

Lol yes - after he read about jardens research in the herald. They could well raise more capital in they push hard in AU.

I was just confused by the NZ Association claim - if it was a new announcement or position they had just taken that caused the dip today (as he implied), if it was was just an older piece of news that was still on people’s minds, or just winner having his usual fun

If I am u or a holder of HGH then I will pay full attention to W69's speculation ...as I know he hinted to me long time back before this capital raise that U maybe getting them ie HGH shares at 1.70 ahead ...at that time HGH was over 2.15 I think ....I thought its just his thoughts ...but latter it turned out that his assessment of capital raised at 1.80 came true ...He had a pretty good idea of it coming ...

Now also he can be fully right ...early Jan / Feb ?? Isn't it too early and will market oblige again at what price now ??

Just before the capital raise talk SP went too fast from 1.80 to 2.18 ...they got " speeding ticket " too from NZX

[Rawz]

Why do they need to raise more money? It makes no sense. Keep paying dividends and keep raising cash?

[Muse]

Why do they need to raise more money? It makes no sense. Keep paying dividends and keep raising cash?

I dont think its a case of “needing” to raise capital - more that if/when it occurs - it will have been a conscious decision to grow AU faster. Stockco historically capital constrained as privately owned and had unsophisticated funding. Mgmt believe they can triple the size of the book which is capital intensive. And want to improve the funding from relatively expensive wholesale funding to cheap deposits. That requires an ADI which os effectively what they are buying.

They obviously dont have to go gung ho and try to triple the book in the next few years. They could fund the status quo probably comfortably for the next few years. They could mix and match - optimise funding while pursuing slower growth. AU reverse mortgages could benefit from both initiatives.

Dont forget the capital requirements in NZ are rising so there will be less surplus dosh to invest in AU.

Dont have a crystal ball of what Jeff or the Board are thinking. Clearly optimising and securing sufficient capital for growth are priorities.

Good that some of the board and mgmt have chunky shareholdings.

[Muse]

There are two changes going on to the capital adequacy regime - both on core capital and reverse mortgages. The later is a newer development

https://businessdesk.co.nz/article/finance/heartland-considering-impact-of-rbnz-rules-on-reverse-mortgages

Suspect its more pertinent to long term performance then the short term jitters from capital raising

[alokdhir]

I have heard this many times on various threads but mainly ATM and FPH ...when trouble comes to stock then it comes from all sides and it keeps coming ...:cool:

HGH below all MAs for a reason ...in downtrend for a reason ...once in downtrend then takes time to get out of it ...FPH / ATM still struggling

But if all goes as planned they will emerge stronger ...yield if provided and stable will make it easier to hold

[winner69]

Dairy prices down again over night

Allowing for the lag HGH might come under pressure in December

[Rawz]

New director

Looks solid!

Good stuff

https://www.nzx.com/announcements/401567

"Simon will bring to Heartland Bank’s Board his extensive banking skills. His experience spans more than 35 years with particular expertise in treasury, including holding senior treasury and financial markets roles within the National Bank of New Zealand and the RBNZ. More recently, Simon was Chief Executive of the Government Superannuation Fund Authority and the National Provident Fund. Simon is currently an independent director on the audit committee of IHC New Zealand, a director of Palliser Estate Wines of Martinborough Limited, and is a trustee of the Fale Malae Trust and the University of Otago Foundation Trust.Simon’s appointment will provide Heartland Bank with an additional independent director, further contributing to the depth of skills and experience of the Board."

[percy]

Pleasing that HGH attracts top people.

[winner69]

Jeez the PM really got stuck into the banks today because they making record profits - Probably headlines grom ANZ and Westpac that's making her pick on banks but Heartland continues to make RECORD PROFITS as well

PM said “Are they demonstrating social license and commitment to the communities by taking the profits that they are? / “This is not a one-off. We’ve seen them consistently taking record profits.”

Our Chair Geoffrey or CEO Jeff probably too nice to come out and rebuke the PM at tomorrows ASM

Looks awfully complicated to ask a question virtually / online but I might give it a go if I haven't found something more exciting to do (like they always seem to have it on NZ Cup day)

This a good question? - "I congratulate Heartland for making record profits year after year, well done. However the Prime Minister yesterday asked whether the likes of Heartland are 'demonstrating social license and commitment to the communities by taking the profits that they are? . What is your response to those comments?"

[850man]

Jeez the PM really got stuck into the banks today because they making record profits - Probably headlines grom ANZ and Westpac that's making her pick on banks but Heartland continues to make RECORD PROFITS as well

PM said “Are they demonstrating social license and commitment to the communities by taking the profits that they are? / “This is not a one-off. We’ve seen them consistently taking record profits.”

Our Chair Geoffrey or CEO Jeff probably too nice to come out and rebuke the PM at tomorrows ASM

Looks awfully complicated to ask a question virtually / online but I might give it a go if I haven't found something more exciting to do (like they always seem to have it on NZ Cup day)

This a good question? - "I congratulate Heartland for making record profits year after year, well done. However the Prime Minister yesterday asked whether the likes of Heartland are 'demonstrating social license and commitment to the communities by taking the profits that they are? . What is your response to those comments?"

While attacking banks, no mention given of the additional $6 billion in tax the government took from kiwis this year vs last.

[Bjauck]

Good point about the extra tax.

What is the "social licence"? As the PM raises it, how is it defined and does it change over the years? Do all public companies have to operate according to an uncodified "social licence"? In periods yielding good profits, extra "socially good" actions must be performed. In periods of average or poor results, shareholders suck it up.

Meanwhile, the government can cream off the tax arising from the inflation effect in interest earned on bank deposits. Inflation that its policies have helped create and inflation baked into its remit to the Reserve Bank.

[percy]

Better for the country the banks making huge profits rather than huge losses.
Then we would really have something to worry about.

[Bjauck]

Better for the country the banks making huge profits rather than huge losses.
Then we would really have something to worry about.

Under this government owner-occupied real estate owners have been making untaxed super gains over the years as a result of the Banks' business. Yet the Banks making good profits, which are taxed, are somehow socially more awkward for this government.

[ronaldson]

Unfortunately, politicians (especially those actually in Government) are driven to attacks which will resonate with the general populace.

So inevitably we go from Energy Companies to Oil/Gas Companies to Supermarket Operators to Banks et al. These are the major taxpayers in the economy. They are also among the very largest employers in the economy. In combination they are the source of a significant portion of the total tax take, in turn an ever-increasing annual sum which Governments are adept at frequently misspending.

I would say that this Government has already overrun its social licence by quite a margin!

[Balance]

Unfortunately, politicians (especially those actually in Government) are driven to attacks which will resonate with the general populace.

So inevitably we go from Energy Companies to Oil/Gas Companies to Supermarket Operators to Banks et al. These are the major taxpayers in the economy. They are also among the very largest employers in the economy. In combination they are the source of a significant portion of the total tax take, in turn an ever-increasing annual sum which Governments are adept at frequently misspending.

I would say that this Government has already overrun its social licence by quite a margin!

Ardern & her useless mob are getting desperate as NZers turn against their woke, divisive and bankrupt policies.

So expect more BS from her but the BS will certainly resonate with those facing ever higher mortgage & interest payments in the next 2 years.

The very same people who fell prey to Ardern's failed housing policies who leveraged up and paid absurd prices for ever smaller properties.

So brace yourselves as the shxt hit the fan - get out of the way.

[850man]

Good point about the extra tax.

What is the "social licence"? As the PM raises it, how is it defined and does it change over the years? Do all public companies have to operate according to an uncodified "social licence"? In periods yielding good profits, extra "socially good" actions must be performed. In periods of average or poor results, shareholders suck it up.

Meanwhile, the government can cream off the tax arising from the inflation effect in interest earned on bank deposits. Inflation that its policies have helped create and inflation baked into its remit to the Reserve Bank.

Considering the socialist (communist) doctrine that drives this Labour government, their objective is full state control over all company profits. Banks make a good target but so do supermarkets and a good distraction from their huge tax take. A third world direction if not changed at next election

[SCOTTY]

Well Jacinda and her bunch are working really hard at crashing our rural sector, energy sector, and tourism so why not destroy the banking sector as well? Nothing like a trifecta on race day :)

[Balance]

Well Jacinda and her bunch are working really hard at crashing our rural sector, energy sector, and tourism so why not destroy the banking sector as well? Nothing like a trifecta on race day :)

Well, could be a lot more damage to some of the listed stocks then in the next 12 months! :eek2:

https://images.squarespace-cdn.com/content/v1/52aca146e4b06d986ca82df3/1665949645979-XJARCDDIRBYZAUT0D7CB/Demolition+copy.jpg?format=500w

[winner69]

Well Jacinda and her bunch are working really hard at crashing our rural sector, energy sector, and tourism so why not destroy the banking sector as well? Nothing like a trifecta on race day :)

Maybe go for the quaddie - retirement sector huge profits next

[RTM]

Considering the socialist (communist) doctrine that drives this Labour government, their objective is full state control over all company profits. Banks make a good target but so do supermarkets and a good distraction from their huge tax take. A third world direction if not changed at next election

Not really sure where to post this...but this thread is certainly more than semi relevant.
This is fascinating and scary. One wonders what productivity will bring to New Zealand ? Pleased I was born when I was.
https://youtu.be/5dZ_lvDgevk

[warthog]

Or the $9.5+bn losses on LSAP.

[davflaws]

Better for the country the banks making huge profits rather than huge losses.
Then we would really have something to worry about.

Yup - and if the only choice was between huge profits and huge losses, it would certainly be better to have the former. But that is not the only choice.

Although capitalism is certainly the best system for generating wealth, it clearly needs to be restrained and regulated to ensure that that wealth is distributed for greatest social good. I think it is perfectly appropriate for politicians (the PM in this instance) to draw attention to that.

The fact that her comments have (so far) provoked 13 posts fulminating with outrage is (to me) yet further evidence that most of us in reciept of unearned income are horrified beyond belief at the prospect of having to give any of it up. Sad.

If it wasn't hosing down outside -I'd go and hug a few trees.

[Balance]

Yup - and if the only choice was between huge profits and huge losses, it would certainly be better to have the former. But that is not the only choice.

Although capitalism is certainly the best system for generating wealth, it clearly needs to be restrained and regulated to ensure that that wealth is distributed for greatest social good. I think it is perfectly appropriate for politicians (the PM in this instance) to draw attention to that.

The fact that her comments have (so far) provoked 13 posts fulminating with outrage is (to me) yet further evidence that most of us in reciept of unearned income are horrified beyond belief at the prospect of having to give any of it up. Sad.

If it wasn't hosing down outside -I'd go and hug a few trees.

From davflaws - the poster who supports the contention and believes that a person in NZ is bereft of culture unless he is a Maori or embraces Maori culture.

[BlackPeter]

Considering the socialist (communist) doctrine that drives this Labour government, their objective is full state control over all company profits. Banks make a good target but so do supermarkets and a good distraction from their huge tax take. A third world direction if not changed at next election

Look, there are clearly lots of good reasons to change this government (like xenophobia, racism, ineptness to do what they promised and as well ideological blindness), but inciting McCarthy's communist hate (who made lots of false or unfounded accusations related to communism) against social democrat's is ridiculous. Nutty posts like that are actually damaging your cause. I guess who really wants to vote for people spreading this nonsense?

Do you believe the stuff you just posted? Really?

While there are many good reasons not to vote for Labour, posts like this give people as well many good reasons not to vote for the opposition (if they fall for this nonsense). I for myself would not want to support a government which is dependant on people with such nutty believes.

Do your research - the Labour party is not more communist that National is fascist.

[davflaws]

From davflaws - the poster who supports the contention and believes that a person in NZ is bereft of culture unless he is a Maori or embraces Maori culture.

Not so, as I have repeatedly pointed out. But instead of an ad hominem attack based on your self serving fantasies about my position, perhaps you could address my argument and defend unregulated capitalism?

But probably not - because whenever you are stumped in argument, you resort to personal abuse.

[Balance]

Not so, as I have repeatedly pointed out. But instead of an ad hominem attack on your self serving fantasies about my position, perhaps you could address my argument and defend unregulated capitalism?

But probably not - because whenever you are stumped in argument, you resort to personal abuse.

Changing your tune?

Did you or did you not support the executive at Maori TV who wrote an opinion piece that NZ is bereft of culture but for the Maori culture?

Yes or no?

Same sort of BS you use to assert that those who oppose Ardern’s addiction to tax & spending are somehow anti-social and anti-community spirited.

[percy]

Have just read the agm speeches and presentation.
All read well.
Pleased I have recently added to our HGH holdings.
AGM presentation;
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HBL/401985/382870.pdf

[Bjauck]

Yup - and if the only choice was between huge profits and huge losses, it would certainly be better to have the former. But that is not the only choice.

Although capitalism is certainly the best system for generating wealth, it clearly needs to be restrained and regulated to ensure that that wealth is distributed for greatest social good. I think it is perfectly appropriate for politicians (the PM in this instance) to draw attention to that.

The fact that her comments have (so far) provoked 13 posts fulminating with outrage is (to me) yet further evidence that most of us in reciept of unearned income are horrified beyond belief at the prospect of having to give any of it up. Sad.

If it wasn't hosing down outside -I'd go and hug a few trees. “unearned” income is already taxed. Investment income if derived from savings from taxed income, is in effect double taxed when subsequently received*. At least.the PM ruled out a third super-tax on bank profits! If there were no investment income, then there would be no business to support employees.

She needs to specify or codify what comprises the “social licence” and who is subject to it. If government policy creates windfall gains for certain groups of people, owners, investors or companies, she needs to explain what windfall gains are and on whom the onus for following said “social licence” lies. It should be explicit so that it can be incorporated into decision-making and operations.

* In fact there is a triple tax levied if that investment income is then subsequently spent on goods and services. The loop of taxes can continue until net income is eventually spent.

For example a TP with income subject to 39% tax, saves the net amount and invests in a TD. The “Unearned” income from that is again subject to 39% tax. From that taxed income the TP buys services subject to 15% gst. That is a lot of tax the TP has generated for Government social policy goals, even without taking into account the business that was supported via the Bank that held the TP’s (“unearned”) term deposit.

[mike2020]

Look, there are clearly lots of good reasons to change this government (like xenophobia, racism, ineptness to do what they promised and as well ideological blindness), but inciting McCarthy's communist hate (who made lots of false or unfounded accusations related to communism) against social democrat's is ridiculous. Nutty posts like that are actually damaging your cause. I guess who really wants to vote for people spreading this nonsense?

Do you believe the stuff you just posted? Really?

While there are many good reasons not to vote for Labour, posts like this give people as well many good reasons not to vote for the opposition (if they fall for this nonsense). I for myself would not want to support a government which is dependant on people with such nutty believes.

Do your research - the Labour party is not more communist that National is fascist.

I do think your last line is a little wrong. There is nothing fascist about the nats but there are a few very communist aspects of labor. Adherence to doctrine over the will of the people i.e 3 waters, health reforms and the merger of broadcasting, the latter being the most concerning. 600 ml just to get more docos and state interference. Which instead could put every kid living in a car into a home.

If labor were their own opposition they would be planning a coup right now.

[Bjauck]

I do think your last line is a little wrong. There is nothing fascist about the nats but there are a few very communist aspects of labor. Adherence to doctrine over the will of the people i.e 3 waters, health reforms and the merger of broadcasting, the latter being the most concerning. 600 ml just to get more docos and state interference. Which instead could put every kid living in a car into a home.

If labor were their own opposition they would be planning a coup right now. The Australian Labor Party?

[Rawz]

UBS: global economy stalling under weight of central bank tightening.

After HGH finish conquering Aus they should get into investment banking and become a big global bank.

Then they can make headlines on CNBC

[BlackPeter]

I do think your last line is a little wrong. There is nothing fascist about the nats but there are a few very communist aspects of labor. Adherence to doctrine over the will of the people i.e 3 waters, health reforms and the merger of broadcasting, the latter being the most concerning. 600 ml just to get more docos and state interference. Which instead could put every kid living in a car into a home.

If labor were their own opposition they would be planning a coup right now.

Well, your last line is obviously outrageous non-sense - and it feels uncomfortable as well as pointless to discuss with people making such nutty statements. Take a deep breath, and if you are able to understand what's wrong with this sentence, than continue ...

And while you are right that the Nats are not fascist, I think they might be closer to fascism than Labour is to any undemocratic from of communism. Don't forget, some National politicians supporting Donald Trump who is supported as well by openly fascist groups - i.e. it would not be hard to construe a common interest. Don't forget either that Donald did plan a coup to steal the election. He is clearly not a democrat. Bad man and some Nats are clearly too close to him. Even the beloved John Key said he would have voted for this crook. Bad judgement and politically questionable.

On the other hand ... there is nothing communist about Labour. Sure - some of their members might have been at some stage members in democratic communist youth organisations. So what? However - they never supported communist dictators, didn't they?

I agree though that some of Labours recent policies are clearly racist ... this is not good, however - while racism is clearly undesirable, it has nothing to do with communism.

I think you just need to educate yourself on communism, before you call anything you don't like "communist".

[mike2020]

Your reaction does not surprise me, nor the fact you took that line literally. I have a labor mp in the family and in opposition they were totally feral. And you are 100% correct, just because someone was a member of a communist organisation previously hardly makes them a communist. But even as socialists they have failed completely.
Anyway, back to JK and DT, far more relevant.

[Rawz]

I love logging into ST and seeing HGH has a new post, one of my favorite threads is this one.

So I go and click on this cool as thread, can’t wait to read the recent posts- oops not today, just more political dribble lol

[percy]

I love logging into ST and seeing HGH has a new post, one of my favorite threads is this one.

So I go and click on this cool as thread, can’t wait to read the recents posts- oops not today, just more political dribble lol

HGH thread Dribble
OCA thread Dribble.
Elections thread.Vile Dribble.
Appears Dribble is contagious,?
Luckily ASX threads remain healthy.

[4KJ]

Couldn't agree more.

[SCOTTY]

Over 1m traded today @ 1.75. Not many left on sell side :)

[850man]

hopefully the message of "banks making obscene profits" has filtered through to punters

[BlackPeter]

hopefully the message of "banks making obscene profits" has filtered through to punters

But hopefully without the appendix that some politicians want to cream them ;)

[davflaws]

Changing your tune?

Did you or did you not support the executive at Maori TV who wrote an opinion piece that NZ is bereft of culture but for the Maori culture?

Yes or no?

Same sort of BS you use to assert that those who oppose Ardern’s addiction to tax & spending are somehow anti-social and anti-community spirited.

This does not belong on the HGH thread. If you care to repost on a thread in "Off Market Discussions" I will explain and demonstrate (yet again) how you have misunderstood the discussion you keep referring to.

[Bjauck]

hopefully the message of "banks making obscene profits" has filtered through to punters Including to those customers of banks, who have made over the years "obscene" untaxed capital gains as a result of mortgages lent to them from said banks. The PM is selective with her outrage: She needs as many voters as possible.

[Panda-NZ-]

Kiwibank has really upped their game recently.

Their new mobile app looks very good, better than heartland (which is second best imo). Along with higher online call savings interest vs heartland.

Good to see NZ banks offering superior stuff to their aussie competition.

[kiora]

"Duncan Greive argued that banks don’t need a social licence to operate. Ben Gracewood asks: what if they had one though? "
"If I was the boss of a bank in New Zealand, I would simply deploy the very best banking API, eliminate marketing spend, reduce products to a few simple options, and then sit back and make all the money. The BenBank API would let anyone with permission make payments and transfers, create and update accounts, confirm receipts, download transactions, and the rest. It would also provide identity verification (in line with anti money laundering laws) and allow new account creation."
https://thespinoff.co.nz/business/15-11-2022/i-would-simply-fix-banking-in-new-zealand

[Rawz]

"Duncan Greive argued that banks don’t need a social licence to operate. Ben Gracewood asks: what if they had one though? "
"If I was the boss of a bank in New Zealand, I would simply deploy the very best banking API, eliminate marketing spend, reduce products to a few simple options, and then sit back and make all the money. The BenBank API would let anyone with permission make payments and transfers, create and update accounts, confirm receipts, download transactions, and the rest. It would also provide identity verification (in line with anti money laundering laws) and allow new account creation."
https://thespinoff.co.nz/business/15-11-2022/i-would-simply-fix-banking-in-new-zealand

What a garbage article. Ben Gracewood must have been on acid when he dreamed up his BenBank fantasy

[Ggcc]

"Duncan Greive argued that banks don’t need a social licence to operate. Ben Gracewood asks: what if they had one though? "
"If I was the boss of a bank in New Zealand, I would simply deploy the very best banking API, eliminate marketing spend, reduce products to a few simple options, and then sit back and make all the money. The BenBank API would let anyone with permission make payments and transfers, create and update accounts, confirm receipts, download transactions, and the rest. It would also provide identity verification (in line with anti money laundering laws) and allow new account creation."
https://thespinoff.co.nz/business/15-11-2022/i-would-simply-fix-banking-in-new-zealand
Whoever creates an app which joins all lawyers, banks, accountants and the like for this stupid AML legislation. They will make a killing. Instead of every place asks for proof that we are who we are and that we have lived in the house for the
last 3 months. At some stage I had to prove where my money came from…… Ask the tax department lol

[percy]

Interesting seeing HGH close at $1.84.Up 7 cents or 4%.Seems a big jump.

[winner69]

Interesting seeing HGH close at $1.84.Up 7 cents or 4%.Seems a big jump.

Dairy prices up last weeks auction :t_up:

[winner69]

Dairy prices up last weeks auction :t_up:

More likely expectations of big ocr rise tomorrow ……ie Heartlands NIM will go even higher

[percy]

More likely expectations of big ocr rise tomorrow ……ie Heartlands NIM will go even higher

Agree............................................. ....................................

[stoploss]

More likely expectations of big ocr rise tomorrow ……ie Heartlands NIM will go even higher
Going early Winner Wed 2 PM

[Rawz]

the big dog Jeff Greenslade's shareholding is shrinking

https://www.nzx.com/announcements/403034

[RTM]

the big dog Jeff Greenslade's shareholding is shrinking

https://www.nzx.com/announcements/403034

Really ?
Off market transfer to Arabella Greenslade.

[Rawz]

Really ?
Off market transfer to Arabella Greenslade.

yeah i am being a bit cheeky aye. but Jeff now hold less HGH shares than before.

Who is Arabella? not that i am a good social media stalker but from what i can tell maybe a daughter?

I am curious- if Arabella sells the $138k worth tomorrow does that need to be declared?

[RTM]

yeah i am being a bit cheeky aye. but Jeff now hold less HGH shares than before.

Who is Arabella? not that i am a good social media stalker but from what i can tell maybe a daughter?

I am curious- if Arabella sells the $138k worth tomorrow does that need to be declared?

Yes, I wondered about that too. Reasoned that they would need to be declared otherwise very easy way to circumvent the rules.
But I have no idea if that is correct or not.

[SCOTTY]

Wow. 10.192m shares traded today - average price $1.84

[winner69]

Big volumes on a few stocks today as the big end of town square things up and go on early holiday

[davflaws]

KPMG resigned as auditors, PWC appointed. - Did I miss something?

[winner69]

KPMG resigned as auditors, PWC appointed. - Did I miss something?


Maybe something to do with discussions over those touted de-designation of derivatives .

Just pure speculation

[RTM]

Maybe something to do with discussions over those touted de-designation of derivatives .

Just pure speculation

I thought the announcement was weird.
First it said the Auditor resigned...

"....advises that it has accepted the resignation of KPMG as external auditor ...."

and then it seemed to say that it was Heartlands idea:

"After a long period as Heartland's external auditor, the Board
determined it was good governance practice to change auditor."

I do agree it's not a bad idea to change every now and then.

[BlackPeter]

I thought the announcement was weird.
First it said the Auditor resigned...

"....advises that it has accepted the resignation of KPMG as external auditor ...."

and then it seemed to say that it was Heartlands idea:

"After a long period as Heartland's external auditor, the Board
determined it was good governance practice to change auditor."

I do agree it's not a bad idea to change every now and then.

Correct, this is as well recommended best practise from the shareholders association.

You are however right - the announcement sounds a bit funny.

Normally you would just expect something like "The board wishes to announce that they are rotating auditors as per policy xyz after n years". Following this policy we would like to thank auditor a for a great job done and are announcing that auditor b will take over in this role starting dd.mm.yy .

Ah well, given that its so hard to find good workers these days, maybe they had to ask the tea lady to prepare the announcement?

[RTM]

Correct, this is as well recommended best practise from the shareholders association.

You are however right - the announcement sounds a bit funny.

Normally you would just expect something like "The board wishes to announce that they are rotating auditors as per policy xyz after n years". Following this policy we would like to thank auditor a for a great job done and are announcing that auditor b will take over in this role starting dd.mm.yy .

Ah well, given that its so hard to find good workers these days, maybe they had to ask the tea lady to prepare the announcement?

Yes, that would have sounded much better. Careful, you will get a job.
Out of curiosity….do you know if the new auditors have a conversation with the old auditors as part of the changeover ?
Would that be part of normal practice ?

[BlackPeter]

Yes, that would have sounded much better. Careful, you will get a job.
Out of curiosity….do you know if the new auditors have a conversation with the old auditors as part of the changeover ?
Would that be part of normal practice ?

Hmm - did a bit of auditing myself (though not books, but against quality standards :) ;

The idea is to audit against a standard and not against a previous measurement (eh - previous audit).

The idea of changing the auditor is to get a fresh pair of eyes to look at the company from a different angle and for that it would not help if you get the old auditor putting their previous bias first thing onto the new auditor.

What I however would expect is that the new auditor reads (as part of their audit) the last audit and checks whether any recommendations in the previous audits have been implemented ... and I guess if anything is unclear I would not see a reason why they couldn't go back to the previous auditors to check with them (after forming their own view).

So - I don't know an answer specific to IFRS audits, but I would be surprised if they would suggest it as normal practise to first talk with the old auditor.

[Muse]

Re the change from KPMG to PWC - it could be related to the de-designation or it could be the outcome from a normal course of business tender or performance review of the auditor, or some combination. PWC seem to be the momentum player across the big four, across the majority of its operations, and extending into audit. I'm involved w/ a handful of businesses that have moved from KPMG and Deloitte to PWC, who while more expensive, seem to have better workflow management processes which reduces strains on the companies under audit. There is nothing more annoying to a CFO and his/her team than constant turnover in the audit team which means you basically have to re-educate the jr auditors each year. BP I assume the new auditor will have access to the audit file from the most recently completed audit, as the closing balance sheet (and its unqualified position) is critical to have an unqualified audit in the new financial year.

[Muse]

Old heartland and it's recent share price movements - a very good example of group think, hysteria, pack mentality, investor psychology and sentiment. The pack drives into overdrive following a capital raise, the SP drops, commentary kicks into overgear, accentuated by stirring from "full time" contributors. A bit of time goes by, the share price recovers to above its rights issue price (1.85 vs 1.78, and certainly up from the ~1.60 low) but mum's the word from the hoard. A lot of very good and fair points raised during the discussion, but context and proportion gets lost. Lots of posters here who I admire....cool heads like Baa Baa, Snow Leopard, Rawz, Percy, Iceman, and many others. People losing their cool while a handful of investors like percy happily just buying more for 160. Nice work.

[winner69]

Old heartland and it's recent share price movements - a very good example of group think, hysteria, pack mentality, investor psychology and sentiment. The pack drives into overdrive following a capital raise, the SP drops, commentary kicks into overgear, accentuated by stirring from "full time" contributors. A bit of time goes by, the share price recovers to above its rights issue price (1.85 vs 1.78, and certainly up from the ~1.60 low) but mum's the word from the hoard. A lot of very good and fair points raised during the discussion, but context and proportion gets lost. Lots of posters here who I admire....cool heads like Baa Baa, Snow Leopard, Rawz, Percy, Iceman, and many others. People losing their cool while a handful of investors like percy happily just buying more for 160. Nice work.

Yes FM, funny the other day I told my mates at the LSE who do behavioural finance stuff that this thread could be good raw data for a case study for their students to use.

[alokdhir]

Some eventually left HGH for good too ...why need come back to a company which doesn't treat minority share holders fairly ...after all there are always other opportunities to milk then just HGH ....this is in response to some going quite on the thread as they dont own it anymore .

Not saying it will not do well ahead ...may or may not depends on many factors mainly economy

Also got some hints from posters here like before that soon another capital raise maybe in order as HGH will need funds to finance its aggressive growth / acquisition strategy in OZ ....maybe be thats the reason for lots of volume interest recently ...early next year possibility hinted ...

Chose KFL over HGH as mentioned here before for regular yield after exiting GNE ...as found that to be more reliable and steady with excellent portfolio for future growth . Good luck to holders :t_up:

[percy]

I prefer to invest directly rather than through a manager such as KFL.I note KFL's portfolio is made up with very low dividend yield payers .ATM 0% yield,MFT 2.44% yield,IFT 2.16% yield,EBO 2.25% yield,FPH,1.18% yield PPH 0%
My main dividend stocks are SFF [Unlisted] 21.126% yield,GNE 6.57% yield, HGH 5.98% yield ,and SPK 4.68% yield.

[Muse]

Some eventually left HGH for good too ...why need come back to a company which doesn't treat minority share holders fairly ...after all there are always other opportunities to milk then just HGH ....this is in response to some going quite on the thread as they dont own it anymore .

Not saying it will not do well ahead ...may or may not depends on many factors mainly economy

Also got some hints from posters here like before that soon another capital raise maybe in order as HGH will need funds to finance its aggressive growth / acquisition strategy in OZ ....maybe be thats the reason for lots of volume interest recently ...early next year possibility hinted ...

Chose KFL over HGH as mentioned here before for regular yield after exiting GNE ...as found that to be more reliable and steady with excellent portfolio for future growth . Good luck to holders :t_up:

Good stuff alokdhir - I'm a keen follower of your posts and always reflect on what you've got to say. Possibly yes a few retailer holders have exited, but in terms of forum contributions, I find that disgruntled/disillusioned posters are never shy to share their opinions (having been there myself!).

I'm not particularly keen on the whole placement and SPP method of raising capital that seems to have become the norm in the last two years. But I'd argue, half heartedly, that in heartland's case it was the retail holders who got the better deal that the new instos. Existing retail holders had a lesser to vwap discount built in - the placement did not - and SPP shares were issued at a lower price than the placement shares. Relative to Ebos, for instance, the capital raise was sufficiently (or devils advocate less well rec'd) that SPP actually got what they subscribed for, rather than being heavily scaled in EBOS' case.

Heartland is heavily retail dominated and it has one of the lowest relative institutional shareholding bases in the NZX50. I totally support the introduction of more insto's onto the register.

Yes I'd wager a capital raising is a realistic possibility to accelerate growth in Australia. Retail investors abhor capital raisings even if it is in their best financial interests, even adjusting for dilution. It's seen as some albatross or red flag. That's fine. Insto's and large holders prefer to look at the business case: what's the thesis, what's the return on investment, IRR and medium and long term impact. Having more balance between retail and insto ownership is great, and I have no doubt HGH will remain focused on its dividend payout.

[alokdhir]

Good stuff alokdhir - I'm a keen follower of your posts and always reflect on what you've got to say. Possibly yes a few retailer holders have exited, but in terms of forum contributions, I find that disgruntled/disillusioned posters are never shy to share their opinions (having been there myself!).

I'm not particularly keen on the whole placement and SPP method of raising capital that seems to have become the norm in the last two years. But I'd argue, half heartedly, that in heartland's case it was the retail holders who got the better deal that the new instos. Existing retail holders had a lesser to vwap discount built in - the placement did not - and SPP shares were issued at a lower price than the placement shares. Relative to Ebos, for instance, the capital raise was sufficiently (or devils advocate less well rec'd) that SPP actually got what they subscribed for, rather than being heavily scaled in EBOS' case.

Heartland is heavily retail dominated and it has one of the lowest relative institutional shareholding bases in the NZX50. I totally support the introduction of more insto's onto the register.

Yes I'd wager a capital raising is a realistic possibility to accelerate growth in Australia. Retail investors abhor capital raisings even if it is in their best financial interests, even adjusting for dilution. It's seen as some albatross or red flag. That's fine. Insto's and large holders prefer to look at the business case: what's the thesis, what's the return on investment, IRR and medium and long term impact. Having more balance between retail and insto ownership is great, and I have no doubt HGH will remain focused on its dividend payout.

Thanks for your encouragement FM ...appreciated . My reasons as mentioned here for exiting HGH are mainly ...further unfriendly dilution possibility , yield part not as expected or forecasted by analysts and banks normally tend to reach their lowest points during recessions which all are forecasting and a distinct possibility

Also my personal view that only yield stocks should not be big eroder of capital in most circumstances , imo 2023 will be return of well managed recession proof growth stocks with stronger balance sheets rather then with leveraged balance sheet like HGH which is trying to implement an aggressive growth strategy at very difficult time when most prudent managements are trying to hunker down ...it maybe higher risk higher returns gambit which I am not ready to accept from my yield oriented stock ...thus my liking for KFL which is tax friendly yield comprising of strong balance sheets of market leading companies like MFT , FPH , IFT , AIA , SUM etc .

AIR offered better options to retail holders for their massive capital raise just before HGH ...maybe that type offering wud have suited almost all more ...just a humble view ...as I know many retail investors on our forum too did not participate in last offer and thus got nothing out of being HGH investor unlike AIR holders !!

[percy]

Thanks for your encouragement FM ...appreciated . My reasons as mentioned here for exiting HGH are mainly ...further unfriendly dilution possibility , yield part not as expected or forecasted by analysts and banks normally tend to reach their lowest points during recessions which all are forecasting and a distinct possibility

Also my personal view that only yield stocks should not be big eroder of capital in most circumstances , imo 2023 will be return of well managed recession proof growth stocks with stronger balance sheets rather then with leveraged balance sheet like HGH which is trying to implement an aggressive growth strategy at very difficult time when most prudent managements are trying to hunker down ...it maybe higher risk higher returns gambit which I am not ready to accept from my yield oriented stock ...thus my liking for KFL which is tax friendly yield comprising of strong balance sheets of market leading companies like MFT , FPH , IFT , AIA , SUM etc .

AIR offered better options to retail holders for their massive capital raise just before HGH ...maybe that type offering wud have suited almost all more ...just a humble view ...as I know many retail investors on our forum too did not participate in last offer and thus got nothing out of being HGH investor unlike AIR holders !!

The big difference between AIR and HGH's capital raise,was AIR raised capital just to STAY in business,while HGH raised capital to EXPAND their business.

[ziggy415]

The big difference between AIR and HGH's capital raise,was AIR raised capital to STAY in business,while HGH raised capital to EXPAND their business.
Someone on here posted that hgh wanted to triple stockco profit over 3 years so that would be good news....$10 to 12 $million dollars times 3 is not bad then add in challenger bank and things could look a lot better

[alokdhir]

The big difference between AIR and HGH's capital raise,was AIR raised capital just to STAY in business,while HGH raised capital to EXPAND their business.

As a small investor how u are treated matters more then just the purpose of the capital raise ...AIR did much better after the raise so that also worked out well but it doesn't matter if one likes the company emotionally ...we all look for reasons for justifying our thoughts ...lol

[percy]

As a small investor how u are treated matters more then just the purpose of the capital raise ...AIR did much better after the raise so that also worked out well but it doesn't matter if one likes the company emotionally ...we all look for reasons for justifying our thoughts ...lol

Disagree.
The purpose is what matters to me.
I am an investor,not a gambler or a charity.

[alokdhir]

Disagree.
The purpose is what matters to me.
I am an investor,not a gambler or a charity.

Ok...as u say ...Hope u know that AIR always had and will have in future also Govt backing as it being national airline of a Island country ...so like FED put ...AIR had Govt put ...never ever it could be allowed to fail ...to stay in business !!!

But lets forget it as its HGH forum ...and they raised and thus will in future also raise equity in a manner more suitable to them and that was the main point .

[percy]

Ok...as u say ...Hope u know that AIR always had and will have in future also Govt backing as it being national airline of a Island country ...so like FED put ...AIR had Govt put ...never ever it could be allowed to fail ...to stay in business !!!

But lets forget it as its HGH forum ...and they raised and thus will in future also raise equity in a manner more suitable to them and that was the main point .

I have been a HGH investor since they were first formed over 10 years ago.Now my second largest holding.Always like companies where directors/management have large shareholdings.
Airline shares and air craft support companies. I have held shares and done extremely well in this sector,holding AQZ [asx] PTB [asx] and HEI [nyse].
I have been fortunate to have steered clear of AIR [nzx].

[Snoopy]

Ok...as u say ...Hope u know that AIR always had and will have in future also Govt backing as it being national airline of a Island country ...so like FED put ...AIR had Govt put ...never ever it could be allowed to fail ... to stay in business !!!


That may be so. But the financial entity represented via Air New Zealand shares that employs the pilots and air crews that runs those planes? That is not the same thing as the underlying business. You may find that if Air New Zealand got into real financial distress the government could let it collapse, and pick up the ashes creating a 'new' fully government owned Air New Zealand and leaving existing non crown Air New Zealand shareholders with nothing. Government majority ownership is not the same as a government guarantee of your private investment capital.



But lets forget it as its HGH forum ...and they raised and thus will in future also raise equity in a manner more suitable to them and that was the main point.


I have owned both Air NZ and Heartland Group Holdings shares. Don't own Air NZ shares any more. Sleep much better at night owning Heartland.

SNOOPY

[alokdhir]

How easy it is to miss the main point raised ...I was referring to investor friendly capital raise procedure not which company has better financial prospects ahead .

But if small investors are happy with HGH procedures and priority given to them by management then who am I to complain ...as I no longer hold it anymore so cant be offended or shortchanged by such attitude of management in future ...:cool:

[alokdhir]

Just got an email from HGH offering 5.5% rate for 10 months deposit with something more for bigger investment ....Either they have huge demand for funds at current mortgage rates of 7% or so or they short of liquidity ...still its really getting up there for the savers ...from almost nothing to 5.5% in a jiffy ...sums up the rates scenario ...how long inflation will last in such tight conditions ??

[SCOTTY]

The Jarden Group has certainly shown confidence in HGH with a substantial shareholder notice yesterday. Now holding 5.007% which I think puts them at number 3 on the share register.

[justakiwi]

I just logged into the Heartland app, and saw a message at the bottom of the window saying "we are phasing out our internet banking platform - We understand there may be times when you need to use this platform for your banking needs - ​go to internet banking (link)"

Doesn't affect or worry me as I almost never use internet banking, but I'm a bit confused by that message. It contradicts itself.

Anyone know what the story is? Are they scrapping the internet banking platform altogether and expecting everyone to use the app?

[clip]

I just logged into the Heartland app, and saw a message at the bottom of the window saying "we are phasing out our internet banking platform - We understand there may be times when you need to use this platform for your banking needs - ​go to internet banking (link)"

Doesn't affect or worry me as I almost never use internet banking, but I'm a bit confused by that message. It contradicts itself.

Anyone know what the story is? Are they scrapping the internet banking platform altogether and expecting everyone to use the app?

Looks like they are phasing out the current platform for a new internet banking platform

[676767]

I just logged into the Heartland app, and saw a message at the bottom of the window saying "we are phasing out our internet banking platform - We understand there may be times when you need to use this platform for your banking needs - ​go to internet banking (link)"

Doesn't affect or worry me as I almost never use internet banking, but I'm a bit confused by that message. It contradicts itself.

Anyone know what the story is? Are they scrapping the internet banking platform altogether and expecting everyone to use the app?

https://digital.heartland.co.nz - is their new platform, use the same login details, etc.
https://secure.heartland.co.nz - is being phased out