Keeping back the good news / profit upgrade until later in the year
http://nzx-prod-s7fsd7f98s.s3-websit...143/279390.pdf
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Keeping back the good news / profit upgrade until later in the year
http://nzx-prod-s7fsd7f98s.s3-websit...143/279390.pdf
Did the words say much ...was Jeff full of enthusiasm ...or was it all a bit boring and mundane?
Boring and mundane. As it should be. HSF growth pretty impressive though eh. Interesting comments about the reverse mortgage type scheme announced by the Aussie Government in their budget. One has to wonder whether this will be a competition for HSF or draw more people's attention to this option to supplement retirement funds, which could be beneficial to HSF !?
The negative is Australian retirees will be able to get a weekly/fortnightly supplement from their government,at better terms than Heartland can offer.
The positive is it will make people more aware of using reverse equity loans.
The real big positive is that the Australian government will not offer lump sum loans.These lump sum loans are being used to do up houses for sale,home improvements,travel ,new cars etc.
Therefore the positives will far out weigh the negatives.
Year Dividends Paid 'per share' Significant Event During Year' FY2013 1.5cps(sp) + 2.0cps 17th December 2012: Heartland becomes a bank FY2014 2.5cps + 2.5cps 1st April 2014: Seniors 'Reverse Mortgage' Business Acquired FY2015 3.5cps + 3.0cps 10th September 2014: invests in Harmony P2P startup 28th October 2014: Credit rating upgraded from BBB- to BBB (Fitch Ratings) FY2016 4.5cps + 3.5cps FY2017 5.0cps + 3.5cps FY2018 5.5cps + 3.5cps Average FY2015 to FY2018 inclusive 8.00cps
I have chosen to use the last four years of operation as indicative, as these years include the full contribution of the Reverse Mortgage Portfolio, a critical component of Heartland going forwards.
SNOOPY
Plugging in a representative yield, one that represents the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation
(Representative Dividend per Share) / (Acceptable Gross Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )
8.0c / 0.72 x 0.075 = $1.48
A reminder here that NTA was
($569.595m - $71.237m) / 516.684m = 96 cps
at balance date. This means my fair valuation is at a good premium to asset value, a credit to management from the rag tag of assets that they started with.
This $1.48 valuation is measured at the average point in the business cycle. One might argue that we are now riding high in the business cycle and that this $1.48 valuation is consequently too low given today's circumstances. I wouldn't argue with that. But, ever the bargain hound, neither would I look at buying any shares myself until that share price drifts down to that $1.48 level.
SNOOPY
Snoops .....I don’t think we will ever see a share price of $1.48 in the foreseeable future