HGH - Heartland Group Holdings

[winner69]

Heartland less than a billion now ….probably a few having a look


DATAROOM
Global investors sniffing around non-bank lenders (https://www.theaustralian.com.au/business/dataroom/global-investors-sniffing-around-nonbank-lenders/news-story/030a5c97b9b46420703635f6deedc9a8)
International private equity groups have been swooping on the Australian market of late, eager to understand the merits of buying a listed non-bank lender.

By BRIDGET CARTER

[bull....]

Heartland less than a billion now ….probably a few having a look


DATAROOM
Global investors sniffing around non-bank lenders (https://www.theaustralian.com.au/business/dataroom/global-investors-sniffing-around-nonbank-lenders/news-story/030a5c97b9b46420703635f6deedc9a8)


International private equity groups have been swooping on the Australian market of late, eager to understand the merits of buying a listed non-bank lender.

By BRIDGET CARTER

mifght be more credible if it was from AFR

[bull....]

probably struggling to get funding against the main banks in this environment . update should tell us

[ronaldson]

Close at $1.31 today, which continues a sharp decline.

Not sure if the Challenger acquisition outcome, which should be disclosed by the end of the month, would be a positive or a negative in this environment but surely longer term will underpin a rerate?

[Forrestdun]

Assume HGH has made around $2.4 mil AUD over the last 5 days due to its share holding in HMY. They own 10% if I remember correctly…

[Muse]

Close at $1.31 today, which continues a sharp decline.

Not sure if the Challenger acquisition outcome, which should be disclosed by the end of the month, would be a positive or a negative in this environment but surely longer term will underpin a rerate?

I think Challenger is a real overhang on the share and could be for a year or so. If you revisit the latest trading announcement tacked at the bottom is a comment that if it was acquired on 31 March 2024 it would contribute a c$3m loss over the 3 month period ended 30 June 2024. So the company is paying cash for a book that is losing ~12m pa annualised (a horrifying though). Obviously as it raises deposits and refi’s the australian business things will improve markedly but that’ll take some time. I guess 12-18m but just speculation. So be a bit of a overhang until that resolved.

The 2nd dynamic is large shareholders have been selling down as with the price dynamics at play easy to see the SP crashing through TERP if/when an equity raising is announced to support the acquisition.

[winner69]

Assume HGH has made around $2.4 mil AUD over the last 5 days due to its share holding in HMY. They own 10% if I remember correctly…

Doesn’t count ……not part of Underlying NPAT

Good though ……might get all their investment back one day

[bull....]

Heartland Bank slices its fixed home loan rates with big cuts to all terms, opening up a big differences to main bank rates

https://www.interest.co.nz/personal-finance/126269/heartland-bank-slices-its-fixed-home-loan-rates-big-cuts-all-terms-opening

making a play for extra business

[Balance]

Heartland less than a billion now ….probably a few having a look


DATAROOM
Global investors sniffing around non-bank lenders (https://www.theaustralian.com.au/business/dataroom/global-investors-sniffing-around-nonbank-lenders/news-story/030a5c97b9b46420703635f6deedc9a8)
International private equity groups have been swooping on the Australian market of late, eager to understand the merits of buying a listed non-bank lender.

By BRIDGET CARTER

The Australian - purveyor of rumours & speculations fed to it by rampers.

How many times have they spread the rumour of impending takeover of ATM? I have lost count!

[bull....]

big volumes selling this week :scared: something smelly ?

[Rawz]

So this is trading 0.88x book value? So quite cheap now ?

[alokdhir]

HGH and KFL same price ....which better value now ? Maybe both ...HGH looks scary but ....

[ralph]

big volumes selling this week :scared: something smelly ?
How long before it gets to 1 $ Could be interesting then very Smelly H M Y could be a better option

[Muse]

big volumes selling this week :scared: something smelly ?

did you read that profit update? there was heaps to not like about it and has set off some heavy volumes this week which I can only imagine is an insto(s) selling down their position....2023 calendar year ave daily volume was about 300k - this week up to 816k. Some of the key things on the minds of many:

* Challenger expected to lose A$3.5m in the 3 month period from 31 March to 30 June 2024. This doesn't include expenses associated with the transaction. Mgmt say "This is expected to transition quickly to a profit-making position as material deposit raising occurs" but I think its fair to be weary on how long it will take to be efficiently & economically raising deposits in Australia in scale. What channel will they quickly raise deposits from? People know HGH in NZ - how are they going to attract depositors in Australia - I would have thought it would take time to build up brand awareness. The company is paying cold hard cash for a business that is presently deeply loss making. I don't think anyone realised what a loss making business this was and mgmt could have done a better job at communicating and taking shareholders along the journey, rather than surprising all with this. This will result in more goodwill being included on the balance sheet, and they already included a whack of goodwill after (in my view) overpaying for StockCo - so goodwill as a proportion of BV is increasing. Should probably be reflected in a lower price/bv multiple.

* The company has lost some credibility in my view regarding provisioning. In post #167222, I talked to how they used up $5.6m of the $8m economic overlay, and did not top it up (and hence why I regarded the FY23 result as a miss to their guidance), and how their provisioning as a % of gross receivables actually fell when one would normally have thought it'd go up with the macro backdrop. It's clear to me that they should have topped up their provisioning last year. and with a potential, and in my view, likely, equity raising coming to support the acquisition of challenger, it raises fair questions of have they provisioned enough, or are they trying to soften the blow in the lead up to the acquisition? I note the extra provisions this year relate to old/historic loans to auto retailers & motor book (nothing written in the last 5 years), so good to see its not happening on the new loans written after they changed lending mix, but still not a good look.

I think they have screwed the pouch a bit.

Had they just provisioned more at 30 June 2023, the market wouldn't have liked it, but it'd would have had time soak in and readjust & re-rate. Or at least include increased provisions in the initial FY24 guidance. They didn't do any of that & went ahead and issued quite bullish guidance and talked a big game of 5 year npat growth, only to have to backtrack on guidance very quickly. It looks naive at best, to me. That has unnerved the market, probably fairly so, and now the SP is tanking right at the time they will probably have to do a decent sized equity raising. It will in my view have to be at a pretty discounted level to get it done given sentiment. If its underwritten it will be quite expensive. And it'll be meaningful - the chit chat is $150-200m, when the marketcap is at about $915m as of today. Given the weak share price and potential size of the issue, it'll be well dilutive particularly for any of those who aren't in a position to take their pro rata. I also wouldn't be surprised to see the stock crash below its theoretical ex price or discounted raising price, like it did during the StockCo placement & rights issue.

So I think there are a few holders like me with that on their mind and thats really impacted sentiment.

I took a bit of risk management action back when I saw El Nino starting to hit the headlines and the share price was pretty strong so I'm thankful for that, but no where near enough. a little bit more after the announcement. I still hold and while I'm cognisant of what I just wrote I sorta can't be bothered to sell anymore as I do think its below its FMV and it'll rebound well after the overhangs are removed (ie, selling at / near the bottom of the cycle often not a wise thing to do), likewise I anticipate the SP to be in a rough patch particularly if an equity raising is required. I'm certainly not buying anymore at these levels, though if a rights issue is announced sorta wont feel like I have a choice given the potential dilution, or wait for as long as possible to see if cheaper to pick up on the secondary market if below the discounted issue price. I'd quite like to do the later. I suspect an insto or two is thinking the same thing.

anyway those are my random thoughts, as of this hour. certainly not advice on what to do or what will actually happen, just reasonably held suspicions on how things could play out.

& edit - as an aside - I do openly wonder if it would become in shareholders best interest for the Challenger acquisition not to proceed, simply as a result of the possible dilution. The AU RM acquisition was a great success. StockCo they overpaid for and I think a lot of their assumptions on its future financial performance have proved faulty (ie, stock lending is an industry where 'things happen' is normal and price should have reflected that). I know getting a banking license is incredibly tough and opens the door to a lot of low cost funding which they can refinance their entire australian business with, but they are effectively already paying for their own involvement (& future upside) by buying so far above book value, taking on all these meaningful transaction losses, absorbing Challengers losses for a period of time (a year?), and then raising extra regulatory capital and working capital to fund it all.

I hope the jr banker at Jarden or whatever investment bank that is giving them advice on transaction structuring and shareholder returns has enough real world experience to address all that stuff. but not hopeful.

[bull....]

did you read that profit update? there was heaps to not like about it and has set off some heavy volumes this week which I can only imagine is an insto(s) selling down their position....2023 calendar year ave daily volume was about 300k - this week up to 816k. Some of the key things on the minds of many:

* Challenger expected to lose A$3.5m in the 3 month period from 31 March to 30 June 2024. This doesn't include expenses associated with the transaction. Mgmt say "This is expected to transition quickly to a profit-making position as material deposit raising occurs" but I think its fair to be weary on how long it will take to be efficiently & economically raising deposits in Australia in scale. What channel will they quickly raise deposits from? People know HGH in NZ - how are they going to attract depositors in Australia - I would have thought it would take time to build up brand awareness. The company is paying cold hard cash for a business that is presently deeply loss making. I don't think anyone realised what a loss making business this was and mgmt could have done a better job at communicating and taking shareholders along the journey, rather than surprising all with this. This will result in more goodwill being included on the balance sheet, and they already included a whack of goodwill after (in my view) overpaying for StockCo - so goodwill as a proportion of BV is increasing. Should probably be reflected in a lower price/bv multiple.

* The company has lost some credibility in my view regarding provisioning. In post #167222, I talked to how they used up $5.6m of the $8m economic overlay, and did not top it up (and hence why I regarded the FY23 result as a miss to their guidance), and how their provisioning as a % of gross receivables actually fell when one would normally have thought it'd go up with the macro backdrop. It's clear to me that they should have topped up their provisioning last year. and with a potential, and in my view, likely, equity raising coming to support the acquisition of challenger, it raises fair questions of have they provisioned enough, or are they trying to soften the blow in the lead up to the acquisition? I note the extra provisions this year relate to old/historic loans to auto retailers & motor book (nothing written in the last 5 years), so good to see its not happening on the new loans written after they changed lending mix, but still not a good look.

I think they have screwed the pouch a bit.

Had they just provisioned more at 30 June 2023, the market wouldn't have liked it, but it'd would have had time soak in and readjust & re-rate. Or at least include increased provisions in the initial FY24 guidance. They didn't do any of that & went ahead and issued quite bullish guidance and talked a big game of 5 year npat growth, only to have to backtrack on guidance very quickly. It looks naive at best, to me. That has unnerved the market, probably fairly so, and now the SP is tanking right at the time they will probably have to do a decent sized equity raising. It will in my view have to be at a pretty discounted level to get it done given sentiment. If its underwritten it will be quite expensive. And it'll be meaningful - the chit chat is $150-200m, when the marketcap is at about $915m as of today. Given the weak share price and potential size of the issue, it'll be well dilutive particularly for any of those who aren't in a position to take their pro rata. I also wouldn't be surprised to see the stock crash below its theoretical ex price or discounted raising price, like it did during the StockCo placement & rights issue.

So I think there are a few holders like me with that on their mind and thats really impacted sentiment.

I took a bit of risk management action back when I saw El Nino starting to hit the headlines and the share price was pretty strong so I'm thankful for that, but no where near enough. a little bit more after the announcement. I still hold and while I'm cognisant of what I just wrote I sorta can't be bothered to sell anymore as I do think its below its FMV and it'll rebound well after the overhangs are removed (ie, selling at / near the bottom of the cycle often not a wise thing to do), likewise I anticipate the SP to be in a rough patch particularly if an equity raising is required. I'm certainly not buying anymore at these levels, though if a rights issue is announced sorta wont feel like I have a choice given the potential dilution, or wait for as long as possible to see if cheaper to pick up on the secondary market if below the discounted issue price. I'd quite like to do the later. I suspect an insto or two is thinking the same thing.

anyway those are my random thoughts, as of this hour. certainly not advice on what to do or what will actually happen, just reasonably held suspicions on how things could play out.

& edit - as an aside - I do openly wonder if it would become in shareholders best interest for the Challenger acquisition not to proceed, simply as a result of the possible dilution. The AU RM acquisition was a great success. StockCo they overpaid for and I think a lot of their assumptions on its future financial performance have proved faulty (ie, stock lending is an industry where 'things happen' is normal and price should have reflected that). I know getting a banking license is incredibly tough and opens the door to a lot of low cost funding which they can refinance their entire australian business with, but they are effectively already paying for their own involvement (& future upside) by buying so far above book value, taking on all these meaningful transaction losses, absorbing Challengers losses for a period of time (a year?), and then raising extra regulatory capital and working capital to fund it all.

I hope the jr banker at Jarden or whatever investment bank that is giving them advice on transaction structuring and shareholder returns has enough real world experience to address all that stuff. but not hopeful.

im thinking nim getting savaged along with the share price again today

[bull....]

How long before it gets to 1 $ Could be interesting then very Smelly H M Y could be a better option

$1 rapidly approaching

[Ggcc]

I haven't kept an eye on this for a while but what is the certainty of a capital raise and how much does everyone feel it is. I have spoken to a major shareholder who feels maybe up to $80,000,000 but no more than that. I would be keen to know everyones thoughts. I don't mind if they did a capital raise, but I would prefer no dividend rather than a capital raise. The major shareholder is family and he believes that dividends will still be here. He has no concern to the short term share price of HGH.

[ralph]

$1 rapidly approaching
Very rapidly after todays performance !!!!!

[Valuegrowth]

Very rapidly after todays performance !!!!!World stocks indexes are hitting all time high, but many stocks have come down or have stagnated.

[X-men]

Because AnZ economist is predicting an interest hike this coming OCR. ....then others economists are saying no....

So.....see.....bullsheet game that some brokers play. I bet today will be a massive buying ....all the fundies are playing the game and buying low.

[bull....]

challenger says today that sale of bank to heartland might settle second half of yr24 and heartland is covering the losses on it now.

[winner69]

challenger says today that sale of bank to heartland might settle second half of yr24 and heartland is covering the losses on it now.

How many millions will Heartland cover ….quite a few I reckon

[Muse]

challenger says today that sale of bank to heartland might settle second half of yr24 and heartland is covering the losses on it now.

thanks for heads-up. By 2h 24, that's Challenger's 2024 financial year - so 2h means anytime up till 30 June 2024.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02771774-2A1504473


How many millions will Heartland cover ….quite a few I reckon

be about A$3.5m if heartland's december update was anything to go by.

[X-men]

https://www.interest.co.nz/bonds/126359/influential-rbnz-survey-showsinfluential-rbnz-survey-shows-decisive-drop-expectation

Here we go....ANZ economist is full of sheet

[rabcat]

Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.

So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?

[Snoopy]

Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.

So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?


The reason is 'we' (being the Heartland shareholders) are already making a good income stream in Australia from our Reverse Mortgage customer base and Stockco customer base. The Challenger Bank acquisition is transition the relatively high cost existing wholesale funding into lower cost retail funding. The end line borrowing customers are already there. The Challenger Bank acquisition is ultimately an exercise in trimming the funding cost base.

SNOOPY

[Balance]

Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.

So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?

Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.

Let’s see :

Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI

There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.

Why do they do it? Ego and naivety.

[Muse]

Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.

Let’s see :

Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI

There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.

Why do they do it? Ego and naivety.

It's fair to observe a number of Kiwi's have cocked up in Australia, and to pin that on naivety and ego as a root cause.

But likewise good to celebrate the successes too.

Smartpay
Hallenstein Glassons
EBOS
Mainfreight
Vulcan Steel
And I'd even chuck in Michael Hill and KMD - even though they are stuck in the macro rut - with +50% sales in Australia now they would be weaker if not for their trans-tasman expansion. These are just currently listed companies - can't be bothered to think of those that have been taken over.

To get it right you need to have some form of competitive advantage. You can't just waltz into Australia with a vanilla offering in a competitive market and think you'll get a look in. Likewise you can't make it a success if you run it from New Zealand, install a handful of Kiwi's as local GM's, and think of it as just another business centre akin to the Waikato. Need to play by Aussie rules and give it a lot of focus, time and effort.

Heartland's Australian RM business is a success. I obviously have my view on the price paid for StockCo and some concerns on the Challenger price, but will be some time before the pieces of the puzzle are in place before we know if it'll be a success, or not.

Probably does require a bit of Ego to establish a NZ bank in Australia, just as it did to amalgamate a plethora of building societies and consumer books into HBL in 2012. An ego isn't necessarily a problem, if it can be kept in check.

[bull....]

ASB profit drops 12%, loan margins squeezed


ASB has reported a drop in profit of 12%.
It said that was in part because its net interest margin, what it makes on lending, dropped 26 basis points.
Total lending was down 1%


https://www.stuff.co.nz/business/350179100/asb-profit-drops-12-loan-margins-squeezed

[kiwikeith]

Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.

Let’s see :

Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI

There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.

Why do they do it? Ego and naivety.

Air NZ learnt the hard way that running a domestic monopoly in NZ was not the same as competing head on with Quantas in Australia.

[ralph]

Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.

Let’s see :

Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI

There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.

Why do they do it? Ego and naivety.

Balance
You Forgot their biggest asset H M Y !! they really bucked the trend not

[Jaa]

It's fair to observe a number of Kiwi's have cocked up in Australia, and to pin that on naivety and ego as a root cause.

But likewise good to celebrate the successes too.

Smartpay
Hallenstein Glassons
EBOS
Mainfreight
Vulcan Steel
And I'd even chuck in Michael Hill and KMD - even though they are stuck in the macro rut - with +50% sales in Australia now they would be weaker if not for their trans-tasman expansion. These are just currently listed companies - can't be bothered to think of those that have been taken over.

To get it right you need to have some form of competitive advantage. You can't just waltz into Australia with a vanilla offering in a competitive market and think you'll get a look in. Likewise you can't make it a success if you run it from New Zealand, install a handful of Kiwi's as local GM's, and think of it as just another business centre akin to the Waikato. Need to play by Aussie rules and give it a lot of focus, time and effort.

Heartland's Australian RM business is a success. I obviously have my view on the price paid for StockCo and some concerns on the Challenger price, but will be some time before the pieces of the puzzle are in place before we know if it'll be a success, or not.

Probably does require a bit of Ego to establish a NZ bank in Australia, just as it did to amalgamate a plethora of building societies and consumer books into HBL in 2012. An ego isn't necessarily a problem, if it can be kept in check.

There's actually quite a few NZ companies that have done well in Aus. Add to your list:

Vital healthcare
Xero
Meridian Energy (several times)
Trustpower / Tilt Renewables
Auckland Airport
Tourism Holdings
Gentrack & Eroad both sold well into Aus

Too early to know:

Ryman
Seeka
Heartland

The key to sucess in Aussie is to go into one state or market first and make it work. Kiwis forget that Australia is far bigger and more diverse than we are.

[winner69]

Bold headlines in SMH

NAB earnings tumble, warns arrears are growing

Hope HGH OK but possibly adds to the poor sector sentiment these daya

[Filthy]

adds to the poor sector sentiment these daya

arent ozzy financials up ~20ish % since Nov? punters have been really excited by banks recently. just not HGH....

[pierre]

Results announced tomorrow morning. The market is expecting to be sucking a lemon if today's SP action is any guide. Down 11c to $1.15 as I write.

[alokdhir]

Almost a certainty that NO DIVIDEND ....rest will know tmrw ...so much for a good yield stock !!!

[Filthy]

Down 11c to $1.15 as I write.

someone wants out fast; just a 'coincidence' that its the day before results? leaky ship eh

[Rawz]

someone wants out fast; just a 'coincidence' that its the day before results? leaky ship eh

Yeah doesnt look good. Cap raise at $1??

[winner69]

Yeah doesnt look good. Cap raise at $1??

Last cap raise announced with results

[thegreatestben]

Between this and OCA I am getting slammed. Feeling like a possum in the headlights!

[Entrep]

Oooof. Maybe deserves a price enquiry from NZX? Seems sus on no public news.

[Rawz]

Between this and OCA I am getting slammed. Feeling like a possum in the headlights!

No point selling both at current prices!! HGH close to $1 almost to good to be true!!

[percy]

Almost a certainty that NO DIVIDEND ....rest will know tmrw ...so much for a good yield stock !!!

Pity as HGH are one of my core dividend stocks.

[850man]

Between this and OCA I am getting slammed. Feeling like a possum in the headlights!

you and me both, it's a f***ing scary red number now

[Bikeguy]

you and me both, it's a f***ing scary red number now

Yep, same boat here…

[alokdhir]

Felt like Jeff became too big for his boots when SP was $ 1.89 at last CR ...but at that time W69 disagreed ....but after seeing present SP ...he will surely reconsider .....

All said ...maybe he can manage it ...though market is very skeptical ...

HGH has done it many times before ....I am almost ready to bet on it after seeing what it says tmrw

[Bjauck]

Oooof. Maybe deserves a price enquiry from NZX? Seems sus on no public news. Yet another NZ listed company with suspicious share price movements before a major announcement or unrevealed takeover enquires? Surely not.

[Rawz]

Felt like Jeff became too big for his boots when SP was $ 1.89 at last CR ...but at that time W69 disagreed ....but after seeing present SP ...he will surely reconsider .....

All said ...maybe he can manage it ...though market is very skeptical ...

HGH has done it many times before ....I am almost ready to bet on it after seeing what it says tmrw

Even Fisher funds probably interested! So cheap. BRM own a few of the aussie banks. KFL can own HGH ay

[bull....]

hammer time :scared: wait till tomoorrow

[alokdhir]

Even Fisher funds probably interested! So cheap. BRM own a few of the aussie banks. KFL can own HGH ay

Fisher funds dont invest in stocks which show cyclical tendencies ....HGH is one of them ....so I am sure they not even watching it

What they like is MFT type ...keeps growing with time

[alokdhir]

hammer time :scared: wait till tomoorrow

U hammer ....I will BUY

[Bjauck]

Between this and OCA I am getting slammed. Feeling like a possum in the headlights! Increasingly NZ listed shares seem to be the domain of the old boy insiders/fund managers. I am considering selling the lot and just putting a bit back in a managed fund, Maybe I will join the majority with capital to invest and buy a rental house. At least that comes with a virtual government guarantee of the housing market in general.

[Bobdn]

What percentage of HGH is in people's portfolio?

Looking at what I own, HGH is 0.17 per cent of my financial assets. I think I'm going to be fine.

Anyone above 5 per cent?

[thegreatestben]

50.62%

Still up after dividends.

[Bjauck]

What percentage of HGH is in people's portfolio?

Looking at what I own, HGH is 0.17 per cent of my financial assets. I think I'm going to be fine.

Anyone above 5 per cent?
Currently OCA 8% and HGH 5% of my NZ share portfolio.:scared:

[thegreatestben]

Increasingly NZ listed shares seem to be the domain of the old boy insiders/fund managers. I am considering selling the lot and just putting a bit back in a managed fund, Maybe I will join the majority with capital to invest and buy a rental house. At least that comes with a virtual government guarantee of the housing market in general.

I haven't added to my shares since July last year but I put $1500 a week into simplicity high growth. Already got two rentals and a freehold house. I don't really care what happens as long as interest rates calm down a bit. Happy with anything starting with a 4 or 5...

[Snow Leopard]

Jun 2016, nearly 8 years ago, I remember coming off the Mongolian Steppes and discovering the Heartland SP had dropped to $1.20 bargain territory.

Today it is cheaper!?

[Bobdn]

@Bjauck - we've all been there, especially early on in our investing life. I was 50 percent Brierley and 50 per cent RJI in September 1987. $3000! Everything I owned. Things didn't go well.

I didn't learn. I was 40 per cent Chorus at the height of the kerfuffle in 2013 or there abouts. A lucky escape.

I've learnt now and am boring ETF/index fund fan girl now.

[winner69]

Sailor Boy and value getting excited ……both just want it to go under a buck …or even lower

[Rawz]

Jun 2016, nearly 8 years ago, I remember coming off the Mongolian Steppes and discovering the Heartland SP had dropped to $1.20 bargain territory.

Today it is cheaper!?

Where are you today?

Wonder if any correlation between Snow Leopard exotic walks and HGH sp

[winner69]

Felt like Jeff became too big for his boots when SP was $ 1.89 at last CR ...but at that time W69 disagreed ....but after seeing present SP ...he will surely reconsider .....

All said ...maybe he can manage it ...though market is very skeptical ... so

HGH has done it many times before ....I am almost ready to bet on it after seeing what it says tmrw

Don’t you remember mate that I finally cancelled Jeff in December …lost complete faith ….at least share price was still about 150 at time

Shortly after cancelling him I liked your post that went like this -

He can be another Nick punishing his shareholders with his stubborn beliefs ....Our love affair with Australia causing more trouble !!

Movie Fatal Attraction comes to mind :eek2:

[iceman]

Currently OCA 8% and HGH 5% of my NZ share portfolio.:scared:

HGH 5.5% of my NZ share portfolio. Sold 1/3 between Christmas & NY so now quite pleased I did that.
No OCA since selling out in Feb 20222

Agree with your comments about the insiders on the NZX. Not a very fair game at all.

[Bjauck]

Jun 2016, nearly 8 years ago, I remember coming off the Mongolian Steppes and discovering the Heartland SP had dropped to $1.20 bargain territory.

Today it is cheaper!? Just checked sharesight for my overall return from Heartland HBL and HGH. I first invested in 2012 and have added to that about 8 times since at various, what I thought Opportune times since. The return from Heartland from 2012 to today has been 9.7% gross. Most of it from the dividend yield. So even allowing for tax, that return still is in excess of the return from the NZX50! I was surprised.

So this old moggy got a bit of cream!

[thegreatestben]

Just checked sharesight for my overall return from Heartland HBL and HGH. I first invested in 2012 and have added to that about 8 times since at various, what I thought Opportune times since. The return from Heartland from 2012 to today has been 9.4% gross. Most of it from the dividend yield. So even allowing for tax, that return still is in excess of the return from the NZX50! I was surprised.

So this pussy cat got a bit of cream!

Yeah can't feel too sorry for myself just yet. Still 9.47% also. That could be 0 tomorrow...

[alokdhir]

Don’t you remember mate that I finally cancelled Jeff in December …lost complete faith ….at least share price was still about 150 at time

Shortly after cancelling him I liked your post that went like this -

He can be another Nick punishing his shareholders with his stubborn beliefs ....Our love affair with Australia causing more trouble !!

Movie Fatal Attraction comes to mind :eek2:

I do remember u lost faith in him ...also I know wisdom helps in getting out early ...and u are wisest of us all !!

But now we all must ponder when to get. in and IF ??

[nztx]

WTF is going on with HGH .. is next announcement going to be a clanger & non event ?

https://www.nzx.com/instruments/HGH

Look at the two year graph on NZX site to see where the trail has lead

and shed just over 7% in today's trading

How are their exposures into a higher interest economy in volatile times faring ?

Are these guys still advertising & sponsoring stuff out there ? Haven't seen much of that
going on for a while ..


At least on that SP pattern - further Cap Raises might be off the table, but if there's damage in the kitchen then possibility the Div might go on the chopping board to retain more of any earnings ;)

[Panda-NZ-]

Agree with your comments about the insiders on the NZX. Not a very fair game at all.

Merge with ASX then have their organisation and regulators police NZ public companies. We're simply incapable of it.

I have a feeling I'm going to lose a significant sum today.. RYM and now HGH.

[alokdhir]

Pity as HGH are one of my core dividend stocks.

U are still very well covered with lots of 2CC and TRA doing super plus your. original investment in HGH was sub $ 1 ....think about people who participated fully to add new shares at last CR ...they were lured in with high yield promise which. made sense at those prices .

Now main question in my mind is that Can HGH recover and go back to 10-12 cents dividends ? If answer is yes then its just a minor set back ...just foregoing one lot of dividend ...but if they cant then its a SELL even now ....will need help of experts like u to answer that ...

[mike2020]

Panda the ASX is the wild west, you can get away with murder over there. Shorter's paradise, so many good AUS companies manipulated into low ball take overs after years of bot trades pushing them down. That said the NZX is hardly a picnic of late.

I have wondered this morning if they might pull the plug on the new bank. HGH was doing so well as it was, surely someone must be paying attention. All those highly profitable reverse loans suddenly worthless, while the Aus housing market goes gangbusters. It's just bad math.

[Rawz]

Panda the ASX is the wild west, you can get away with murder over there. Shorter's paradise, so many good AUS companies manipulated into low ball take overs after years of bot trades pushing them down. That said the NZX is hardly a picnic of late.

I have wondered this morning if they might pull the plug on the new bank. HGH was doing so well as it was, surely someone must be paying attention. All those highly profitable reverse loans suddenly worthless, while the Aus housing market goes gangbusters. It's just bad math.

How are the reverse mortgages suddenly worthless? What have I missed?

[bull....]

is this bad , report not out yet ?

[winner69]

is this bad , report not out yet ?

Bankers hours bull …..be patient

[Ggcc]

is this bad , report not out yet ?

9.15am last time

[Muse]

They are just doing a coin toss to see which version of the results to release…the one where they press ahead with challenger and scrap the dividend or the other one where they dont but just has poor results lol

[winner69]

They are just doing a coin toss to see which version of the results to release…the one where they press ahead with challenger and scrap the dividend or the other one where they dont but just has poor results lol

Just making sure analysts etc don’t have much time to come up with hard questions at the briefing

Jeff giving a little smirk

[Balance]

9.15am last time

Working through a trading halt mechanics with NZX & ASX?

[alokdhir]

They are just doing a coin toss to see which version of the results to release…the one where they press ahead with challenger and scrap the dividend or the other one where they dont but just has poor results lol

Walk us thru price action based on both options ...which option is less damaging to SP in short and long term

[Goose]

Talk about stretching it out...I see a trading halt coming up.

[mike2020]

I just meant how it is reflected in the share price.

[mike2020]

Panda I just meant how it is reflected in the share price.

[Goose]

There has been no guidance updates so to me it will be a surprise if profit is way to the down side. I don't expect they will announce a dividend and re: Challenger Bank, I reckon they will be pushing on with that.

[winner69]

Better keep an eye on ASX …might be there first

[777]

Webcast is supposed to start at 1030.

[ronaldson]

However it is, if it is released now it won't commence trading at 10.00am this morning.

[winner69]

Going into administration is a complicated process ..forca bank

[Muse]

Surely a trading halt would need to be applied if the fin results are not releases prior to 10am.

[Balance]

Market consensus as of yesterday is for a dividend but it seems like cancelling the interim dividend is now in vogue - FBU, PGW & HGH?

[winner69]

Surely a trading halt would need to be applied if the fin results are not releases prior to 10am.

No

They have until close of business

Not a good look though

[Rawz]

can someone please post the webcast link thingy

[bull....]

Going into administration is a complicated process ..forca bank

is the webcast about this ?

[Muse]

No

They have until close of business

Not a good look though

Thats my point - if they miss issuing the fins in time for the webcast - or skip the webcast - the mkt will not look kindly at that. And trading should be halted until releases. In my view anyway. Would be a rational thing to do

[pierre]

No

They have until close of business

Not a good look though

The analyst webcast is scheduled for 10:30am

[777]

can someone please post the webcast link thingy

It is their company announcements

[winner69]

Just out …oh bugger it’s for that Windfarm outfit

[iceman]

can someone please post the webcast link thingy

https://event.choruscall.com/mediaframe/webcast.html?webcastid=Z0WoJGvX

[Balance]

The analyst webcast is scheduled for 10:30am

Weirder & weirder :

Half year results announcement date

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) advises that it intends to announce its financial results for the six-month period ended 31 December 2023 on Tuesday 27 February 2024.

A live webcast for investors and analysts will be held at 10.30am NZDT on the same day. Shareholders are welcome to join the webcast. The webcast can be accessed via this link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Z0WoJGvX

[winner69]

Speedy Az wants his walk and run around ……hope it’s out before we get back

[Entrep]

This feels like watching a train wreck in slow motion

[bull....]

what a joke

[bull....]

Thats my point - if they miss issuing the fins in time for the webcast - or skip the webcast - the mkt will not look kindly at that. And trading should be halted until releases. In my view anyway. Would be a rational thing to do

yep this sort of carry on will be a hammering if its bad

[winner69]

Trading underway ….share price up

[enzed staffy]

stopped trading

[777]

Well dividend still there.

The NZX should have put a halt on until 10 minutes after announcement.

[iceman]

Heartland announces 1H2024 financial results
27/2/2024, 10:04 am HALFYR
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) has announced its financial results for the six-month period ended 31 December 2023 (1H2024).

- Net profit after tax (NPAT) of $37.6 million. Underlying NPAT of $52.7 million. NPAT decreased by $11.1 million (22.7%) and, on an underlying basis, decreased by $2.0 million (3.6%) compared with the six-month period ended 31 December 2022 (1H2023).
- One-off or non-cash technical items had a $15.1 million net impact on NPAT.
- Gross finance receivables (Receivables) up 4.2% .
- Continued strong growth in New Zealand Reverse Mortgages (up 18.7%)5 and Australian Reverse Mortgages (up 20.0%)5.
- Solid growth in Asset Finance (up 8.9%)5 and Motor Finance (up 6.4%)5.
- Underlying impairment expense ratio decreased by 6 basis points (bps) to 0.23% compared with 1H2023.
- Significant progress towards Heartland’s ambitions to become a bank in Australia through the acquisition of Challenger Bank Limited (Challenger Bank).
- Completion of Heartland Bank Limited’s (Heartland Bank) core banking system upgrade in 1H2024 enabling accelerated digitalisation and automation.

In December 2023, Heartland announced revised NPAT guidance for the financial year ending 30 June 2024 (FY2024) due to:
- the expected A$3.5 million one-off FY2024 impact on underlying NPAT arising from the anticipated acquisition of Challenger Bank, positioning Heartland for its next stage of growth
- short-term operational performance challenges - a slower than expected start to FY2024 for Motor Finance and Australian Livestock Finance, and higher cost of funds
- Heartland Bank’s response to issues affecting a subset of legacy lending.

In what has been a mixed environment in which to operate, Heartland’s 1H2024 result saw continued growth in most of its core lending portfolios , with good pipelines for further growth and to expand market share.

The acquisition of Challenger Bank is nearing completion with the regulatory approval process now in the final stages. When FY2024 guidance was provided, it excluded any costs related to the acquisition of Challenger Bank. As the acquisition nears completion, it was appropriate that guidance was updated to reflect the impact of Challenger Bank becoming part of Heartland. The impact to underlying NPAT for FY2024 is expected to be a net loss of A$3.5 million, reflecting underlying NPAT of Challenger Bank. This is expected to transition quickly to a profit-making position as material deposit raising occurs.

In preparation for completion, Challenger Bank is actively raising deposits. Recent success achieved by Challenger Bank in the Australian deposit market has exceeded Heartland’s expectations. This will enable Heartland to optimise the advantage of a lower cost of funds post-acquisition completion. Heartland is confident of acquisition completion in the second half of FY2024 (2H2024).

The arrears experienced in a subset of longer dated Motor Finance loans are a result of operational issues in Heartland Bank’s Collections & Recoveries area and do not reflect any underlying issues with the credit quality of the book. This is primarily a resourcing issue caused by illness, employee turnover due to overseas travel, and a focus on Heartland Bank’s core banking system upgrade (which is now complete). This is being addressed through a specialised recruitment strategy and automation. Underlying impairments are otherwise performing as expected given the challenging economic conditions. Heartland’s asset quality continues to shift towards loans with lower risk exposures.

Overall performance continues to demonstrate the resilience of Heartland’s core lending portfolios and ‘best or only’ strategy. In particular, Australian Reverse Mortgages’ market share increased to 41% as at 30 September 2023 and Motor Finance experienced growth of 6.4%5 in a market where total new and used car sales in New Zealand were down by 12.2% . In the long-term Heartland expects to continue its growth story. Organic growth is expected to improve in line with reduced inflation. Similarly, cost of funds and net interest margin (NIM) are expected to improve as interest rates ease.

One of Heartland’s focuses in 1H2024 has been on continuing to position for future growth. Heartland has growth ambitions that will facilitate cost efficiency and return on equity (ROE) expansion. Specifically, Heartland’s ambition is to achieve an underlying NPAT of $200 million and an underlying cost-to-income (CTI) ratio of less than 35% by the financial year ending 30 June 2028 (FY2028).

Heartland has various strategic initiatives underway to support the realisation of its FY2028 ambitions, including:
- expansion in Australia facilitated by the acquisition of Challenger Bank providing access to depositor funding and larger addressable markets
- increased digitalisation and automation to achieve frictionless service at a low cost
- continued growth across core lending portfolios.

For the full announcement, see the attachments to this release:
‒ Heartland 1H2024 Results Announcement
‒ Heartland 1H2024 Investor Presentation
‒ Heartland NZX Results Announcement Template
‒ Heartland Distribution Notice
‒ Heartland Interim Financial Statements
‒ Heartland Bank Disclosure Statement

– ENDS –

The persons who authorised this announcement:
Jeff Greenslade, Chief Executive Officer
Andrew Dixson, Chief Financial Officer

For further information and media enquiries, please contact:
Nicola Foley, Group Head of Communications
+64 27 345 6809
nicola.foley@heartland.co.nz

[777]

stopped trading

Bl**y late.

[Entrep]

No raise then?

[bull....]

nim's crushed as expected , see they are being removed from index small cap on 15 march

[winner69]

Bit of an anti-climax

[Entrep]

Damn, guess I'll remove my bids at 60c

[Muse]

No raise then?

a raise wont come until regulatory approvals are granted for challenger (in my view). that could be anywhere up till the end of the year I suppose - a nice little omnipresent overhang through out the year

poor form releasing the results so late.

[Ggcc]

As far as I can see the report is not as bad as I had thought. Above $1.30 by the end of the week I feel

[Rawz]

Result all good. FY28 numbers looks good. Long term holders can sit back and relax

[Muse]

results will take a while to unpick. But I've got a bug so going back to bed.

[iceman]

results will take a while to unpick. But I've got a bug so going back to bed.

But at first glance look significantly better than expected, particularly after the huge SP drop yesterday.

[Muse]

But at first glance look significantly better than expected, particularly after the huge SP drop yesterday.

that was bizarre

Heartland is increasingly a volatile stock. Well it always has been - over reacting to both the good and the bad but that theme seems more pronounced. I reckon its moving annual beta has increased - though that isn't exactly high on the list of things to look at

[Panda-NZ-]

What's the div?

[Rawz]

I see they have finally ripped the bandage off the HMY value. Booked at 49 cents per share.

Ironically now HMY will probably be a tailwind for HGH with big revaluation gain over the coming years

[777]

What's the div?

It is in the announcement

[Rawz]

What's the div?

4 cents per share down from 5.5

[iceman]

that was bizarre

Heartland is increasingly a volatile stock. Well it always has been - over reacting to both the good and the bad but that theme seems more pronounced. I reckon its moving annual beta has increased - though that isn't exactly high on the list of things to look at

Yes talk about an over reaction, before results announcement. Back already to where we were yesterday morning !!

[Rawz]

I remember posting here that the heartland extend product was not good. It extended loans on depreciating assets potentially over the assets useful life.

In my mind it was kicking the can down the road and now i guess its time to address these 'longer dated loans'

[Ggcc]

As far as I can see the report is not as bad as I had thought. Above $1.30 by the end of the week I feel

Maybe by the end of the day lol

[beetills]

Been a holder since cbs days and topped up when i think it was Kerr selling out.
Still a happy holder.

[SCOTTY]

I particularly like the HGH ambition of $200m NPAT for 2028 :)

[percy]

Today is the day that yesterday we worried about,and all is well...lol.
I am impressed that they are progressing well with their sound growth strategy.
Pleased to see Challenger Bank has already started accepting retail deposits.

[Traderx]

Ok result, solid outlook

- "Recent success of Challenger Bank in the AU deposit market has exceeded Heartland’s expectations"
- "NIM compression expected to be temporary"
- CTI "expected to gradually improve"

Disc - small recent entrant holder

[nztx]

I particularly like the HGH ambition of $200m NPAT for 2028 :)


Need Big money to make Big money like that

In just 4 years too .. where will the economy & interest rates go in that time ?

Where's it coming from in high interest volatile times - withholding dividends or robbing another bank ? ;)

Or hand outstretched for further Cap Raises on the back of outgoing dividends having the lid put on them ?


We all know what a trail of Cap Raises regularly flung out does to the SP -- HGH in past have demonstrated
that very very well .. Did someone say but for all the frequent Cap Raises the SP should be north of $5 ? ;)

[bull....]

Need Big money to make Big money like that

In just 4 years too .. where will the economy & interest rates go in that time ?

Where's it coming from in high interest volatile times - withholding dividends or robbing another bank ? ;)

Or hand outstretched for further Cap Raises on the back of outgoing dividends having the lid put on them ?


We all know what a trail of Cap Raises regularly flung out does to the SP -- HGH in past have demonstrated
that very very well .. Did someone say but for all the frequent Cap Raises the SP should be north of $5 ? ;)

looks like stock being offered to buyers all day now :scared: with it being dropped from index in march guess it may continue

[ralph]

Damn, guess I'll remove my bids at 60c
Yep to risky

[rabcat]

I particularly like the HGH ambition of $200m NPAT for 2028 :)


Totally agree with this. Have thought for a long time that Heartland will be a $5 share in a few years.

Result announced this morning was very solid.

Company seems to be on the right track.

PS Would you rather buy Heartland or Fletchers?

[winner69]

Totally agree with this. Have thought for a long time that Heartland will be a $5 share in a few years.

Result announced this morning was very solid.

Company seems to be on the right track.

PS Would you rather buy Heartland or Fletchers?


Taylor talks about “legacy” issues …. Greenslade talks about “legacy” issues

And both do the normalisation thing

Hmmm

[Rawz]

I particularly like the HGH ambition of $200m NPAT for 2028 :)

A few years ago punters could trust the $200m guidance. But maybe now questions get asked.. like the trust is gone.

Need Muse to recover from his bug to help unpack all this lol

[winner69]

A few years ago punters could trust the $200m guidance. But maybe now questions get asked.. like the trust is gone.

Need Muse to recover from his bug to help unpack all this lol

A challenge for Muse here rawz

Plot rolling 12 months Reported and Underlying NPAT and it looks like below ……with Underlying $20m odd more than Reported. Wonder what is Muse?

The Reported line looking a bit sad eh Rawz …. Methinks the market thinks the Underlying stuff is rubbish and they should be concentrating /valuing on the real NPAT….spooky that H1 NPAT was down 22% on pcp which is about what share price fallen over the last few months

[Rawz]

Why even give guidance for 2028? Who does that. It’s so far away. What’s it look like in the 3 years before that.

Also, what does EPS look like in 2028. How many shares to be issued to get Aussie humming. And how many shares to be issued to meet the capital requirements? I recall seeing a slide that said capital required needed to increase 400bp from todays level

[forest]

Why even give guidance for 2028? Who does that. It’s so far away. What’s it look like in the 3 years before that.

Also, what does EPS look like in 2028. How many shares to be issued to get Aussie humming. And how many shares to be issued to meet the capital requirements? I recall seeing a slide that said capital required needed to increase 400bp from todays level

I agree, 3 years ago in 2021 HGH had 583 million shares on issue, now approx 715 million. History would suggest more shares will be issue. Sadly smaller retail shareholders are unlikely presented with as good a deal compared with the institutions.

[alokdhir]

To me it seems like HGH is worth a bet now ...most likely we have bottomed already ...if not then soon .

If they can pull this off then SP can double from here by 2028 ...they looking for time to do the job ...thats why talking about 2028 eps ....by when all efforts would start adding to eps .

[nztx]

looks like stock being offered to buyers all day now :scared: with it being dropped from index in march guess it may continue


Do you see a $200m generating $5 plus SP bohemith in 4 or 5 years .. in this one ?

Let's face it .. what sort of Capital or Borrowing inflow would be needed to generate that sort of NPAT ?

Likely in the current high Interest times ? or maybe not ? ;)

And to be worth $5 apiece, then it needs to behave like a $5 stock and generate returns or value usually attributable of a $5 stock .. that doesn't seem to be something similar to a share where the 5.5c Div has been slashed down to 4.0c and the recent share price trajectory resembles a nearby skislope heading down into the valley .. strangely enough the transition upwards between the two is not something that can be easily talked up and comes about through results and performance ;)

What is a Cap Raise going to do to SP ? .. perhaps more of the past pattern which has it now at circa $1.20 ?

With a drop out of the index - what will excitement levels for taking up a fresh avalanche of HGH shares @ $1.00 or $1.10 look like ? :) Many takers .. or will they be mostly watching for signs of rapid elevation towards the $200m with no tricky downgrades first ? :)

Perhaps it might take '85c to clear the shelves' to get all the newly minted scrip into new homes ;)

I mean heck if $200m NPAT was that easily attainable like a walk in a Christchurch Park, then why stop there ? Perhaps HGH should have a play at taking over one of the big Aussie major banks .. and stop stuffing around with smaller Aussie challenges ;)

The target Aussie bank might even come to the party with a multi-billion high interest loan to help get the job of taking it out over & done with in a hurry too :)

The new shares to be issued for such an adventurous play may well have to be cleared out at 50c, but then 5 years down the track just may be worth who knows .. perhaps 25 ragged depreciated inflation torn Kiwi pesos apiece ;)

[nztx]

https://www.nzx.com/announcements/426935


Net profit after tax (NPAT) of $37.6 million. Underlying NPAT of $52.7 million.

NPAT decreased by $11.1 million (22.7%) and, on an underlying basis, decreased by $2.0 million (3.6%) compared with the six-month period ended 31 December 2022 (1H2023).

- One-off or non-cash technical items had a $15.1 million net impact on NPAT.


So if we eliminate the $15.1m One-offs, write-offs/downs etc - then would probably see $4.0 mil ahead


In times of rapidly increasing interest rates possibly would have expected considerably better as shown by the big Aussie banks. Like any bank, HGH probably know well how sting fairly hard at market interest rates on lending. Deposits coming in will all be eyed on the lending margins they can generate.


I wouldn't have expected to have seen this published in an NZX Announcement:



The arrears experienced in a subset of longer dated Motor Finance loans are a result of operational issues in Heartland Bank’s Collections & Recoveries area and do not reflect any underlying issues with the credit quality of the book. This is primarily a resourcing issue caused by illness, employee turnover due to overseas travel, and a focus on Heartland Bank’s core banking system upgrade (which is now complete). This is being addressed through a specialised recruitment strategy and automation. Underlying impairments are otherwise performing as expected given the challenging economic conditions. Heartland’s asset quality continues to shift towards loans with lower risk exposures.


NPAT circa $50m now - 4 years out $200m on the ambitious wishlist

What Borrowing & Capital base will it take to multiply what is HGH now, by a mere 4 times to see $200m in 2028 ?

Or just wishful ambitious dreaming ? ;)


Is there a large trove of gold hidden in Oz under the vault of Challenger Bank no-one else was aware of ? ;)

[bull....]

Do you see a $200m generating $5 plus SP bohemith in 4 or 5 years .. in this one ?

Let's face it .. what sort of Capital or Borrowing inflow would be needed to generate that sort of NPAT ?

Likely in the current high Interest times ? or maybe not ? ;)

And to be worth $5 apiece, then it needs to behave like a $5 stock and generate returns or value usually attributable of a $5 stock .. that doesn't seem to be something similar to a share where the 5.5c Div has been slashed down to 4.0c and the recent share price trajectory resembles a nearby skislope heading down into the valley .. strangely enough the transition upwards between the two is not something that can be easily talked up and comes about through results and performance ;)

What is a Cap Raise going to do to SP ? .. perhaps more of the past pattern which has it now at circa $1.20 ?

With a drop out of the index - what will excitement levels for taking up a fresh avalanche of HGH shares @ $1.00 or $1.10 look like ? :) Many takers .. or will they be mostly watching for signs of rapid elevation towards the $200m with no tricky downgrades first ? :)

Perhaps it might take '85c to clear the shelves' to get all the newly minted scrip into new homes ;)

I mean heck if $200m NPAT was that easily attainable like a walk in a Christchurch Park, then why stop there ? Perhaps HGH should have a play at taking over one of the big Aussie major banks .. and stop stuffing around with smaller Aussie challenges ;)

The target Aussie bank might even come to the party with a multi-billion high interest loan to help get the job of taking it out over & done with in a hurry too :)

The new shares to be issued for such an adventurous play may well have to be cleared out at 50c, but then 5 years down the track just may be worth who knows .. perhaps 25 ragged depreciated inflation torn Kiwi pesos apiece ;)

good on them for having aspirations of 200m , but it be hard going.
hard slog at the moment for second tier finance institutions to get deposits same in aus so if challenger getting them they are doing something well ... what ?
if they do another cap raise dilution would mean even less dividends in the future without a increase in profits

days of being a dividend grower over ? for the immediate future one must wonder

[Rawz]

The Reported line looking a bit sad eh Rawz …. Methinks the market thinks the Underlying stuff is rubbish and they should be concentrating /valuing on the real NPAT….spooky that H1 NPAT was down 22% on pcp which is about what share price fallen over the last few months

Hey winner, don’t suppose you have the reported EPS chart. That would look even worse with all the shares being issued

[Recaster]

The operating cash flow before changes in operating assets and liabilities at -70.6m is concerning.

[Traderx]

The operating cash flow before changes in operating assets and liabilities at -70.6m is concerning.

The note below this states that operating cash flow does not include wholesale funding - so is only part of the picture

[Traderx]

https://www.nzx.com/announcements/426935




So if we eliminate the $15.1m One-offs, write-offs/downs etc - then would probably see $4.0 mil ahead


In times of rapidly increasing interest rates possibly would have expected considerably better as shown by the big Aussie banks. Like any bank, HGH probably know well how sting fairly hard at market interest rates on lending. Deposits coming in will all be eyed on the lending margins they can generate.


I wouldn't have expected to have seen this published in an NZX Announcement:





NPAT circa $50m now - 4 years out $200m on the ambitious wishlist

What Borrowing & Capital base will it take to multiply what is HGH now, by a mere 4 times to see $200m in 2028 ?

Or just wishful ambitious dreaming ? ;)


Is there a large trove of gold hidden in Oz under the vault of Challenger Bank no-one else was aware of ? ;)

You are comparing a half year result ~$50m with a full year FY28 ambition of $200m - so it is not 4X.

[nztx]

You are comparing a half year result ~$50m with a full year FY28 ambition of $200m - so it is not 4X.


Okay correct

What is going to take in Capital Structuring & Borrowings to double this outfit's wishful outlook by 2028 to get to $200m ?

Is the final dividend going to be trimmed as well ?

what will that do to the SP ?

That sort of thing going forwards doesn't bide for happy campers wanting to throw more in the pot
or for that matter structuring & borrowings within certain ratios to meet ambitious wishes ..

After all the times are tighting, cost of capital is up there, it might come back a bit, but
the economy seems to be recessing. Aussie may or may not be the same too.

And everyone has seen where the SP has gone already .. a crimped dividend & wishful thinking aren't likely to assist.


Outfits like HGH need lots and lots of available Capital whether sourced from stakeholders, Retained earnings or Borrowed and more so when in expansion mode. The high cost of borrowing currently will restrain things IMO

[Jenny Ruth]

Hi all. In my latest column published on my Substack, Just the Business, takes a look at Heartland's likely fortunes in Australia once it receives its Australian banking licence. The headline is: Can Heartland succeed in Oz where so many NZ companies have failed?
And you can find it here:
https://justthebusinessjennyruth.substack.com/p/can-heartland-succeed-in-oz-where

[percy]

Hi all. In my latest column published on my Substack, Just the Business, takes a look at Heartland's likely fortunes in Australia once it receives its Australian banking licence. The headline is: Can Heartland succeed in Oz where so many NZ companies have failed?
And you can find it here:
https://justthebusinessjennyruth.substack.com/p/can-heartland-succeed-in-oz-where

Seems they are already succeeding..
Australian Reverse Mortgages’ market share increased to 41% as at 30 September 2023.

[Jenny Ruth]

Yep. That's one of the things the column looks at. Also their StockCo acquisition in Australia

[percy]

Brokers recent research.
Craigs.Overweight...Target Price [12mths].$1.76
Forbar.Neutral......Target Price..........$1.37
Jarden.Overweight...Target Price [12mths].$1.92
Current share price $1.22

[RTM]

Brokers recent research.
Craigs.Overweight...Target Price [12mths].$1.76
Forbar.Neutral......Target Price..........$1.37
Jarden.Overweight...Target Price [12mths].$1.92
Current share price $1.22

and ex dividend (4c) tomorrow, down to 119 of so perhaps ?

[bull....]

wow hgh down 16% in aus ... insider info ?

[Muse]

wow hgh down 16% in aus ... insider info ?

on $4,800 worth of trade on ex dividend day bull - you know that.

[winner69]

wow hgh down 16% in aus ... insider info ?

Was their anything in the AFR or The Australian mate

[Filthy]

wow hgh down 16% in aus ... insider info ?

meanwhile, in NZ, up 5% - no liquidity in aus. you could always buy them low and shunt them across to NZ lol

[nztx]

meanwhile, in NZ, up 5% - no liquidity in aus. you could always buy them low and shunt them across to NZ lol


should be up considerably more for an outfit with a grand wishlist of improving their bottomline fortunes between now & 2028 by double .. or is the jury still out pondering how many Cap Raises to get there and if the Divs will be wrung out to achieve a respectable balance of bells & whistles in volatile turbulent times ? ;)

[ronaldson]

No announcement yet re the conclusion of the regulatory approval process re Challenger Bank. Surely must be imminent now?

Not sure if the answer will be positive or negative for the share price but the current limbo circumstance is distracting for everyone and sucking up resources.

[Rawz]

Beagle called $1.17 cum dividend the low. He always had a good nose for HGH feeds. Nose looks to be right so far

[Joshuatree]

That Beagle good at sniffing bottoms alright atpit, how he deciphers that language ive no idea but I'm not a doggie lover.Thanks for sharing Beagle.(thumbs up).

[ronaldson]

Close today at $1.31 indicates some legs here again?

And still no news re Challenger.

[winner69]

These guys set up a place to get independent advice re reverse mortgages

https://www.equityrelease.co.nz/

[Almost-confused]

I've just brought in today. Great to be part of the HGH ride. And some familiar faces here...

[alokdhir]

To me it seems like HGH is worth a bet now ...most likely we have bottomed already ...if not then soon .

If they can pull this off then SP can double from here by 2028 ...they looking for time to do the job ...thats why talking about 2028 eps ....by when all efforts would start adding to eps .

Posted on 27th Feb and actioned also ...got decent parcel below $ 1.17 ...but when people are starry eyed about dogs only then they miss normal people posts .....lol :p

[percy]

Posted on 27th Feb and actioned also ...got decent parcel below $ 1.17 ...but when people are starry eyed about dogs only then they miss normal people posts .....lol :p

Great timing.
And the bonus is you will receive the 4 cents per share fully imputed divie on 20th March.

[Rawz]

Posted on 27th Feb and actioned also ...got decent parcel below $ 1.17 ...but when people are starry eyed about dogs only then they miss normal people posts .....lol :p

You post that at 11pm after you read all the dogs posts throughout the day lol.

Just joking mate, well done

[Muse]

rebalance day - HGH will exit the FTSE small cap index today at mkt close

[DonkeyKong]

rebalance day - HGH will exit the FTSE small cap index today at mkt close

Any ideas on how many need to be sold and how low it might go?

[850man]

20 M shares in the sell 10 mins out from close

[alokdhir]

You post that at 11pm after you read all the dogs posts throughout the day lol.

Just joking mate, well done

I understand what u trying to say ...but I wud have not bought Shares at 11 pm ...Cud I ? ...but still thanks for your faith in your dog ....u r a true believer ...lol

PS : Also for your benefit I will like to remind u that Mr B was a whole hearted participant in last CR around $ 1.80 and was encouraging followers like u to do the same in his various posts about merits of HGH while I was posting totally opposite to that and even sold out all my big position as I knew better SP will come ....surely was not in sync at that time mate !!!

[ronaldson]

O my - The big boys have come out to play!

And look at the volume for CEN, MCY, ARG, SPK and others!

[Muse]

O my - The big boys have come out to play!

And look at the volume for CEN, MCY, ARG, SPK and others!

Nzx50 rebalance day as well
Some other coys removed in the FTSE rebalance

[Rawz]

I understand what u trying to say ...but I wud have not bought Shares at 11 pm ...Cud I ? ...but still thanks for your faith in your dog ....u r a true believer ...lol

PS : Also for your benefit I will like to remind u that Mr B was a whole hearted participant in last CR around $ 1.80 and was encouraging followers like u to do the same in his various posts about merits of HGH while I was posting totally opposite to that and even sold out all my big position as I knew better SP will come ....surely was not in sync at that time mate !!!

If you go back I was also posting along with you saying stay away :)

[stoploss]

Heartland partners with TSLA , not as good as 1% that most of the banks do on an EV.
https://www.informedinvestor.co.nz/heartland-bank-announced-as-a-preferred-finance-provider-for-tesla/?fbclid=IwAR1W3i8dDaF9OJ0noy8dG5tuIhMz4Sl7zNhlXVjN WntmTfHBfJfUcufVkDg_aem_Aa2oS6xRH-m8oyySsruHfRN58X3lQYphNK8VSxQAagbTMo1Vr4ozPYgtd8q_ 5AOfda-qA1BbCa1hbKRkWAxjQPq-&utm_medium=paid&utm_source=fb&utm_id=6589072110861&utm_content=6589072113461&utm_term=6589072112461&utm_campaign=6589072110861

[bull....]

hammer time . $1 soon :t_up:

[thegreatestben]

Glad I don't take the DRP

[winner69]

Dairy prices down again … 3 auctions in a row. Whole Milk Powder down 4% overnight

[bull....]

new lows soon

probably on this i guess from there annual report

We expect economic conditions to remain challenging throughout FY2024, with ongoing pressure on margins and impairments

[Ggcc]

new lows soon

probably on this i guess from there annual report

We expect economic conditions to remain challenging throughout FY2024, with ongoing pressure on margins and impairments
HGH is on my watch list for now, but will add some later if a bargain. Right now the NZ economy seems stuffed.

[Rawz]

$1.14 wow. That increase to $1.30 was just a big fat dead cat bounce.

Surely wont go under $1.10. surely not?

[winner69]

$1.14 wow. That increase to $1.30 was just a big fat dead cat bounce.

Surely wont go under $1.10. surely not?

If it goes under $1.10 it go sub $1 for sure

Years ago I bought some at 98 cents ….for a while that was the record intraday high and as it drifted down I claimed to be the only punter who had lost money on Heartland ……after a few weeks went to a buck

[percy]

If it goes under $1.10 it go sub $1 for sure

Years ago I bought some at 98 cents ….for a while that was the record intraday high and as it drifted down I claimed to be the only punter who had lost money on Heartland ……after a few weeks went to a buck

I wonder whether history will repeat it's self..??
"We live in interesting times."

[Rawz]

If it goes under $1.10 it go sub $1 for sure

Years ago I bought some at 98 cents ….for a while that was the record intraday high and as it drifted down I claimed to be the only punter who had lost money on Heartland ……after a few weeks went to a buck

Why would it go sub $1 if sub $1.10? is that a TA thing?

Yeah good buying anywhere around these levels imo. Hold for 4 years and im sure you will do very well.

[bull....]

Why would it go sub $1 if sub $1.10? is that a TA thing?

Yeah good buying anywhere around these levels imo. Hold for 4 years and im sure you will do very well.

yep follow sailors theory lol keep buying all the way down haha

[bull....]

non bank lenders under extreme margin pressure by big banks.

[Rawz]

yep follow sailors theory lol keep buying all the way down haha

Buying at $1 or $1.10 or $1.20 no biggie when the SP be over $2 in a couple of years and you collect a decent divvy along the way.
Who can pick the bottom? Buying HGH in a downtrend is different to buying OCA or KMD (as an example) in a downtrend imo.

Where do you get your margin under extreme pressure by big banks stuff from? Do you mean like now or just in the past? I reckon right now what they are writing will be back to normal nim and this will flush through in the coming years with nim increasing nicely

[bull....]

Buying at $1 or $1.10 or $1.20 no biggie when the SP be over $2 in a couple of years and you collect a decent divvy along the way.
Who can pick the bottom? Buying HGH in a downtrend is different to buying OCA or KMD (as an example) in a downtrend imo.

Where do you get your margin under extreme pressure by big banks stuff from? Do you mean like now or just in the past? I reckon right now what they are writing will be back to normal nim and this will flush through in the coming years with nim increasing nicely

you making me laugh , if margin under pressure now = less profit = less div
if they do cap raise = lower share price + lower div esp if margins contracting
when challenger deal finalized they spend next 2 yrs energy and money on making that profitable

[Rawz]

you making me laugh , if margin under pressure now = less profit = less div
if they do cap raise = lower share price + lower div esp if margins contracting
when challenger deal finalized they spend next 2 yrs energy and money on making that profitable

well im saying margin isnt under pressure now.. yes in the past but not going forward.

you saying its getting crushed by big banks? where do you get this from? just making it up or what? im honestly interested to see the data

as the swaps drift lower nim will increase.

[bull....]

well im saying margin isnt under pressure now.. yes in the past but not going forward.

you saying its getting crushed by big banks? where do you get this from? just making it up or what? im honestly interested to see the data

as the swaps drift lower nim will increase.

its all in there results nim declining and all over the news non- bank lenders nim's getting crushed ... crushed worldwide

[Rawz]

its all in there results nim declining and all over the news non- bank lenders nim's getting crushed ... crushed worldwide

In the historic accounts? Lol

[bull....]

In the historic accounts? Lol

i post it again. this is there outlook statement

We expect economic conditions to remain challenging throughout FY2024, with ongoing pressure on margins and impairments

[Rawz]

i post it again. this is there outlook statement

We expect economic conditions to remain challenging throughout FY2024, with ongoing pressure on margins and impairments
I can’t see that.

This is from H1

In the long-term Heartland expects to continue its growth story. Organic growth is expected to improve in line with reduced inflation. Similarly, cost of funds and net interest margin (NIM) are expected to improve as interest rates ease.

[bull....]

I can’t see that.

This is from H1

In the long-term Heartland expects to continue its growth story. Organic growth is expected to improve in line with reduced inflation. Similarly, cost of funds and net interest margin (NIM) are expected to improve as interest rates ease.

you might need a maori interpreter

[Rawz]

you might need a maori interpreter
Lol very good… :)

[Bobdn]

JP Morgan is up 95 per cent over the last 5 years where as HGH is down 24 per cent. Weird - I would have thought that all banks would move in lockstep. Well, looks like they don't.

The good news is that most NZers would own more of JPM than HGH - JPM is 1.26 per cent of the S&P500, which would form the core of most KiwiSaver and high growth funds. HGH is now a tiny part of the NZX50 and of course the NZX50 will be a much smaller proportion of the basic growth KiwiSaver fund (one hopes). I just checked Kernel's High Growth fund - JPM is 0.91 per cent. I couldn't see HGH - I stopped looking after I got to 0.20 percent of the fund. Might be there somewhere.

So we can all relax. The underperformance of a single company is not going to have a significant impact on a diversified vanilla retirement fund.

[X-men]

Somehow it is better to spend your hard earned money rather than put in the share market.

2019..NPAT $74m....SP was around $1.50-1.60

Now NPAT was almost $96m
...n SP is now $1.13....

What a sheet market to be honest!!!

[winner69]

Somehow it is better to spend your hard earned money rather than put in the share market.

2019..NPAT $74m....SP was around $1.50-1.60

Now NPAT was almost $96m
...n SP is now $1.13....

What a sheet market to be honest!!!

Ha ha

So not always better to own the bank than putting money in the bank

[Balance]

Why would it go sub $1 if sub $1.10? is that a TA thing?

Yeah good buying anywhere around these levels imo. Hold for 4 years and im sure you will do very well.

4 years?

Wow!

[X-men]

Anyone can elaborate...why so many ruthless selling???

[Bjauck]

Somehow it is better to spend your hard earned money rather than put in the share market.

2019..NPAT $74m....SP was around $1.50-1.60

Now NPAT was almost $96m
...n SP is now $1.13....

What a sheet market to be honest!!! You have to remember that there are more shares on issue today too.

One year term deposit rate was about 3.3% in 2019. Five years later it is 6.1%.

HGH paid 10cpa/share dividend 5 years ago; today it is the same I think. We are lucky perhaps that the SP has not fallen by more…

So as interest rates fall, SP back up?

[Ggcc]

Anyone can elaborate...why so many ruthless selling???
I am not selling right now, I still own some, but sold most of mine around $1.70 . I am looking at where my Task cash will be redistributed, but some part of me feels that longterm there is no growth in this share and I am not 100% sure if this is the right fit for my portfolio. It is a great dividend stock, but no growth in SP

[mike2020]

Big hgh div fan. Holding nothing now. Took part in the last raise and got full allocation but changed my mind shortly after. Post this last dividend I had remorse for not getting a few back. I don't think its 4 years away its just another hgh confidence hurdle. Been there before today haven't we. Can go either way. Im waiting for bull to call it a buy. To many like myself have enjoyed hgh in the past and may have rose tinted specks.

[ronaldson]

I'm well under water here, and got another 673 via the DRP this week to add to the problem.

Regulator very slow in dealing with the Challenger proposal and that needs to be out of the way with all the consequences transparent, and preferably done and dusted, before this stock is going anywhere. Not much buy interest now at all.

[dibble]

I'm well under water here, and got another 673 via the DRP this week to add to the problem.

Regulator very slow in dealing with the Challenger proposal and that needs to be out of the way with all the consequences transparent, and preferably done and dusted, before this stock is going anywhere. Not much buy interest now at all.

"Challenger" Bank.....perhaps they could have saved a bunch of cash and completed due diligence merely upon the name of the target.

[Davexl]

Sizeable 6% move up today, no news?

Something in the wind eg Banking license ? or way too early ?

Nice to see anyway...

[Balance]

Sizeable 6% move up today, no news?

Something in the wind eg Banking license ? or way too early ?

Nice to see anyway...

RBNZ indicating that interest cuts could be on the way soon may have something to do with the rise?

[Muse]

Wants to rise when the heavy sellers are away. Hopefully the not the long weekend effect.

Percy raised a good point to me - wonder whats happened with Geoff's shares? Was a chunky stake if memory serves me right - circa 15 million - but not above the 5% threshold for SSH notices, and (sadly) not required to provide director/officer notices anymore.

Well oversold in my view, hoping a rally can become entrenched.

[X-men]

Not just over sold, traders were manipulating the SP.

[Muse]

Nice to see HGH near the top of the leader board today.

I calculated the other day Heartland's long term beta - from the time it became HGH (from HBL) back at the end of October 2018 to the end of february. It's extraordinarily high at 1.57 (1 being average). What's that mean in practice? Volatily, with the price overreacting to bad news and sentiment, and the good. Hopefully at some point we start getting some good news for the SP to overreact to as well (the fun part).

[Bjauck]

Nice to see HGH near the top of the leader board today.

I calculated the other day Heartland's long term beta - from the time it became HGH (from HBL) back at the end of October 2018 to the end of february. It's extraordinarily high at 1.57 (1 being average). What's that mean in practice? Volatily, with the price overreacting to bad news and sentiment, and the good. Hopefully at some point we start getting some good news for the SP to overreact to as well (the fun part).

Some end of tax year positioning? I hope the price does not go back down next week….

[winner69]

Nice to see HGH near the top of the leader board today.

I calculated the other day Heartland's long term beta - from the time it became HGH (from HBL) back at the end of October 2018 to the end of february. It's extraordinarily high at 1.57 (1 being average). What's that mean in practice? Volatily, with the price overreacting to bad news and sentiment, and the good. Hopefully at some point we start getting some good news for the SP to overreact to as well (the fun part).

Always good to do your calculations on such things …a good learning exercise

Yahoo …..Beta (5Y monthly) at 0.96 but Reuters have it as 1.51

Suppose it all matters on time frame and intervals used

But you and Reuters are pretty close to each other

[Rawz]

Why would HGH have a high beta?

More retail investors vs instos? (I don’t know that for sure I just remember reading it once)

Or just because it’s a financial and a small bank at that

[Muse]

Always good to do your calculations on such things …a good learning exercise

Yahoo …..Beta (5Y monthly) at 0.96 but Reuters have it as 1.51

Suppose it all matters on time frame and intervals used

But you and Reuters are pretty close to each other

Aye there are too many ways to calculate it that all give you different outcomes and cause you to conclude its all a bit of bunk. The method I chose probably the best suited to low liquidity / lower volatility index that is the NZX50. Takes the average monthly SP, adds the declared div if there is one in that month, and compares that to the average monthly NZ50 gross index, taking the slope of the pairs monthly respective LNs. Better than just flicking daily or monthly on a bloomy but yeah take it with a grain of salt. no doubt off but intuitively feels sensible - recall the over reaction in the SP during the milk bust or covid, the soaring SP during 2021 and early 2022, etc

and @rawz yeah I think you are on to it

[Bjauck]

Why would HGH have a high beta?

More retail investors vs instos? (I don’t know that for sure I just remember reading it once)

Or just because it’s a financial and a small bank at that I suspect a bit of both. Perhaps there is a perception that it is more prone to changes to economic conditions? Plus perhaps smaller trade volumes make it more vulnerable to index components changes and institutional movements?

[winner69]

Hey Muse, a bit bored so I quickly calculated HGH volatility (annualised)....weekly closes since changed to HGH in 2018

Over that time historical volatility has been 30%

Over the last year it has been 32% and last 2 years 28% ……so recently not really less or more volatile than historically

Quite high ……could mean over next year if HGH share could go down 30% or up 30% we shouldn’t be surprised

[Baa_Baa]

But @winner you posted on another channel that HGH is in a "long term uptrend", well that's just nonsense isn't it. Why would you say something like that, it isn't and is far from it?

Maybe, just possibly, it's reversed a long term downtrend (buy the DCB), but a pop above 30 DMA (which failed last time) right on EOM rebalancing, is hardly encouraging. It's only just re-entered the long term down-trend channel .. quite a way from break out confirming an up trend.

[winner69]

But @winner you posted on another channel that HGH is in a "long term uptrend", well that's just nonsense isn't it. Why would you say something like that, it isn't and is far from it?

Maybe, just possibly, it's reversed a long term downtrend (buy the DCB), but a pop above 30 DMA (which failed last time) right on EOM rebalancing, is hardly encouraging. It's only just re-entered the long term down-trend channel .. quite a way from break out confirming an up trend.

From the day of listing the HBL/HGH share price is in ‘long term uptrend’ as the chart shows

With an eye to the future and with volatility at 30% odd the chart is looking quite promising

[winner69]

This sounds pretty good


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From Sharetrader AM update

[thegreatestben]

They did it

HGH
08/04/2024 08:30
OFFER
PRICE SENSITIVE
REL: 0830 HRS Heartland Group Holdings Limited

OFFER: HGH: HGH meets Challenger Bank milestone & NZ$210m equity raise

NZX/ASX release
8 April 2024

Heartland announces indicative regulatory approval of Challenger Bank
acquisition, and NZ$210m equity raise

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to
announce that it has received indicative regulatory approvals from the
Australian Prudential Regulation Authority (APRA) and the Reserve Bank of New
Zealand (RBNZ) for Heartland Bank Limited's acquisition of Challenger Bank
Limited from Challenger Limited (ASX: CGF).

Heartland also announces a NZ$210 million equity raise, comprising an NZ$105
million underwritten institutional placement (Placement) and a NZ$105 million
underwritten 1 for 6.85 accelerated non-renounceable entitlement offer
(Entitlement Offer).

APRA and RBNZ's final regulatory approvals are conditional on the successful
completion of the Placement and Entitlement Offer.

Included in this announcement is:
1. Offer Announcement
2. Offer Document
3. Investor Presentation
4. NZX Corporate Action Notice
5. Cleansing Notice

ENDS

[Rawz]

PowerPoint Presentation (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HBL/429162/416304.pdf)

Jeff leaving. Probably reading too many of Winners posts saying he lost his magic :(

Heartland is seeking to raise NZ$210m (Equity Raise) in new equity via a:
• NZ$105m placement to eligible investors (Placement); and
• 1 for 6.85 pro-rata accelerated non-renounceable entitlement offer to raise approximately NZ$105m (Entitlement Offer).
• Use of funds to pay consideration for Challenger Bank, satisfy indicative conditions pertaining to regulatory capital and liquidity and fuel projected growth.
• Approximately 210m new Heartland ordinary shares will be issued under the Equity Raise.

• NZ$1.00 per new share representing:
• 14.6% discount to TERP1 of NZ$1.1703.
• 18.0% discount to last closing price of NZ$1.22 as at 5 April 2024.
• The Australian Dollar Offer Price for eligible retail shareholders has been set at A$0.9151, using the prevailing RBNZ AUD/NZD exchange rate on 5 April 2024.
• The Placement and Entitlement Offer are fully underwritten (with the exception of the pre-committed amount by Heartland’s largest shareholder, Harrogate Trustee Limited)

FY2024 dividend

• Having regard to the equity raise, acquisition of Challenger Bank and associated growth opportunities, the Board expects to target a total dividend payout ratio in the financial year ending 30 June 2024 of 50% of underlying net profit after tax. The Board will, as it has historically, actively manage dividend settings and carefully consider the declaration of any dividend based on Heartland’s capital needs, ROE accretive growth opportunities, balance sheet flexibility and Heartland’s financial performance.

Board and Management updates

• After 15 years at Heartland, Jeff Greenslade has indicated to the Board his intention to step down from his role as CEO of Heartland at the end of this calendar year. Jeff’s tenure at Heartland included seeing through its formation in 2011, and receipt of Heartland Bank’s RBNZ banking registration in 2012. Post-Completion, Jeff’s focus as CEO will be on the strategic transition of Heartland in its role as a listed parent company of banks in two jurisdictions, the integration of Challenger Bank into the group, and the continued development of Heartland’s business in Australia. The Board is confident in the continuation of senior expertise within the Heartland group, and will work closely with Jeff on succession planning through the calendar year to ensure a successful transition.• For further Board and Management updates, please refer to the announcement that accompanies this investor presentation.

[winner69]

PowerPoint Presentation (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HBL/429162/416304.pdf)

Jeff leaving. Probably reading too many of Winners posts saying he lost his magic :(.

Yep, possibly leaving a big mess behind for others to clean up

[Greekwatchdog]

Well after the CR is done, I will be back in for long term. This is great for NZ bank to be given this opportunity. To me this shows you how useless Kiwibank is having a shareholder not giving them enough funds to grow.

[Balance]

These accelerated institutional placements really do disadvantage retail shareholders.

They get their $1.00 new shares on 11th April while retail shareholders do not get theirs until 26th April, giving the institutions an advantage of taking profits for 2 weeks as the shares trade ex-entitlement* 9th April.

* Theoretical ex-entitlement price - $1.17

[Bjauck]

These accelerated institutional placements really do disadvantage retail shareholders.

They get their $1.00 new shares on 11th April while retail shareholders do not get theirs until 26th April, giving the institutions an advantage of taking profits for 2 weeks as the shares trade ex-entitlement* 9th April.

* Theoretical ex-entitlement price - $1.17 Such is the lot of retail shareholders in NZ. Those institutions will be getting shares at a good discount. The selling pressure in the last few weeks makes sense now.

[Rawz]

* Theoretical ex-entitlement price - $1.17

How is that calculated? I get $1.19?

[bull....]

lower div's going forward than this yr's 8c by my calc's

[Muse]

How is that calculated? I get $1.19?

1.22 last spot price
(x) 719.509 existing shares outstanding
= 877.8m pre money market cap

plus the $210m raised
= post money market cap of 1087.8

divide that by the post raise # shares outstanding, which is
719.509 + 210 new shares (raised at a dollar) = 929.5

1087.8/929.5 = 1.1703

[Rawz]

1.22 last spot price
(x) 719.509 existing shares outstanding
= 877.8m pre money market cap

plus the $210m raised
= post money market cap of 1087.8

divide that by the post raise # shares outstanding, which is
719.509 + 210 new shares (raised at a dollar) = 929.5

1087.8/929.5 = 1.1703

ah yes of course. thank you

[777]

Or more simply

(6.85*1.22+1.00)/7.85=1.192

I go with Rawz.

[Rawz]

Or more simply

(6.85*1.22+1.00)/7.85=1.192

I go with Rawz.

Yes but I guess the $105m institutional bit isnt factored in doing it this way

[Ggcc]

lower div's going forward than this yr's 8c by my calc's

They should have done this ages ago. I would prefer capital gains over dividends anytime. Currently no tax on capital gains

[Bjauck]

I chose the wrong time to partly rejoin the DRIP! Oz usually chews up Kiwi companies and spits them out. Jeff's skedaddling, not wanting to be in charge should that happen with Heartland?

[Bjauck]

They should have done this ages ago. I would prefer capital gains over dividends anytime. Currently no tax on capital gains
I wouldn’t be surprised if a version of the “fair dividend rate” for low or non-dividend paying companies will be introduced for NZ company share investments by one party or another. Governments have found all sorts of erratic ways around the crazy absence of a general CGT.

[ronaldson]

I don't find the absence of a general CGT crazy at all.

On another note, by my count 30 of the 2024 competition entrants chose HGH as one of their picks so when XP04 adjusts for today's announcement (and how he does it) the outcome will be interesting.

[Simsee]

I don't find the absence of a general CGT crazy at all.

On another note, by my count 30 of the 2024 competition entrants chose HGH as one of their picks so when XP04 adjusts for today's announcement (and how he does it) the outcome will be interesting.
I’m one of them. The question I have for the hive mind is do I sell some of my AFT to fund my entitlement plus 100% punt? What to do?

[Ggcc]

I wouldn’t be surprised if a version of the “fair dividend rate” for low or non-dividend paying companies will be introduced for NZ company share investments by one party or another. Governments have found all sorts of erratic ways around the crazy absence of a general CGT.
I don’t mind that as everyone gets stung.

If they do introduce a capital gains tax on the other hand I hope they also allow for capital gains losses.

[ronaldson]

I’m one of them. The question I have for the hive mind is do I sell some of my AFT to fund my entitlement plus 100% punt? What to do?

My two pennys worth is don't do that.

For a start, I cannot see more than 20% of entitlements not being taken up, as you cannot renounce for value and the pricing suggests that theoretically you get $1.17 for investing $1.00 or leave that difference to the benefit of others. So it does make sense to gather cash but not as much cash as you intend if you need to sell an existing investment to do so.

Secondly I would trawl your portfolio for something other than AFT, which is relatively low in the cycle just now and has run the hardest yards in the last few years so as to now be dividend paying and with relatively low debt, and is due to report for FY24 in May albeit that outcome seems quite well signalled. AFT is increasing annual revenue relatively strongly and is in growth mode, and whilst the dividend yield is (very) modest it is at least paid. So perhaps there is more potential there than some other holding?

[Balance]

Yes but I guess the $105m institutional bit isnt factored in doing it this way

What my ex boss used to call the ‘buggerization’ factor!

[Entrep]

Hoping to pick some of these up for a buck in the coming weeks

[winner69]

Hoping to pick some of these up for a buck in the coming weeks


Might even go sub $1 mate

[LaserEyeKiwi]

I chose the wrong time to partly rejoin the DRIP! Oz usually chews up Kiwi companies and spits them out. Jeff's skedaddling, not wanting to be in charge should that happen with Heartland?

except HGH have had a great Aussie business for years now, this change will make their margins there even better. I’m buying back into this company this week.

[Bjauck]

except HGH have had a great Aussie business for years now, this change will make their margins there even better. I’m buying back into this company this week.
Fair comment. This one will be different. Just being a negative Nellie when a company comes cap in hand within two years for more of my money - or else my investment will be diluted.

[DavidB]

I'll be taking up my entitlement and I'll also be taking advantage of the offer which allows me to buy up to an additional 100% of the offered shares at 1 buck. I'll fund it by selling some ANZ Aussie shares, that way the amount allocated to banking in my portfolio will remain the same.

[mshierlaw]

I'll be taking up my entitlement and I'll also be taking advantage of the offer which allows me to buy up to an additional 100% of the offered shares at 1 buck. I'll fund it by selling some ANZ Aussie shares, that way the amount allocated to banking in my portfolio will remain the same.

How good this deal will depend on AUS growth of this business. Presentation looks good at face value but no real discount on the offer The previous capital raise offer was a flop with shareholders loosing significant value. This is one of my smaller holdings, will dip my toe in the water but don't expect to pick up additional allocation over the 1:6.85 allocation.

[ralph]

Ah well hgh won the race with whs to get to one dollar first ,good luck to Jeff he tried his best I believe

[Rawz]

Chris Flood surely will be the new Jeff, but the old version. Should go good

[iceman]

Ah well hgh won the race with whs to get to one dollar first ,good luck to Jeff he tried his best I believe

As a SH since this was first listed (only exiting temporarily during COVID), I think Jeff has done an outstanding job managing and growing this business. He leaves the business with plenty of notice and in good health. A NZ company buying an Australian bank is quite impressive and a first ever. Have a read of Jenny Ruth's article published today.

I will be taking up my entitlement.

[Grimy]

I will also be taking up my entitlement.

[waikare]

I'll be taking up my entitlement plus a few more.

[thegreatestben]

Taking up mine too

[ronaldson]

It's a yes from me.

[bull....]

ill buy one day , but for current holders underwater prob good to buy to save more losses

[Jenny Ruth]

Hi all. My latest column published on my Substack, Just the Business, looks at a chief executive with a mostly sterling track record. The headline is: Jeff Greenslade announces Heartland departure after hugely successful reign
and you can find it here: https://substack.com/@justthebusinessjennyruth