so something like $1.27 after cap raise?
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buying any HGH around here is super duper cheap. And punters on the other place saying 90-95cents possible. OMG what a bargain that would be. Like free money?
https://www.nzx.com/announcements/430226
Heartland announces receipt of final regulatory approvals for Challenger Bank acquisition
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to announce that it has received the necessary regulatory approvals from the Australian Prudential Regulation Authority and the Reserve Bank of New Zealand for Heartland Bank Limited’s (Heartland Bank) acquisition of Challenger Bank Limited (Challenger Bank) from Challenger Limited (ASX: CGF).
Heartland Bank expects to complete the acquisition of Challenger Bank today, 30 April 2024.
Yes, well done Heartland indeed - once again doing what they say they were going to do. They announced the intention of acquisition way back in October 2022 so it has been a long road to arrive at full approval today and obviously wasn't an easy process.
http://nzx-prod-s7fsd7f98s.s3-websit...869/381579.pdf
I am looking forward to things settling down now and an improved NIM through lower cost of funding. Roll on a bright future.
Disc: Holding and fully participated in the allotment
Heartland Bank completes acquisition of Challenger Bank
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to confirm the completion of Heartland Bank Limited’s (Heartland Bank’s) acquisition of Challenger Bank Limited (Challenger Bank) from Challenger Limited (ASX: CGF).
Completing the acquisition makes Heartland Bank the first New Zealand registered bank to acquire an Australian authorised deposit-taking institution (ADI). The acquisition is a critical step in Heartland’s strategy for achieving its long-term growth ambitions and expansion in the Australian market, where it is already well-established.
Heartland’s Australian Reverse Mortgage business, Heartland Finance, is Australia’s leading provider of reverse mortgages with 42% market share. Since 2004, Heartland Finance has helped more than 27,500 Australians to live a more comfortable retirement by releasing equity from their homes. Heartland’s Livestock Finance business, StockCo Australia, is a leading specialist provider of livestock finance. StockCo Australia has been providing livestock finance solutions to food producers across Australia since 2014, with origins in New Zealand dating back to 1995. At 31 December 2023, Heartland Finance and StockCo Australia together had approximately NZ$2 billion of gross finance receivables.
On 2 May 2024, Heartland will transfer Heartland Australia Holdings Pty Limited and its subsidiaries (which include Heartland Finance and StockCo Australia) (together, Heartland Australia) to Challenger Bank.
The total consideration paid for the acquisition of Challenger Bank was AU$115.7 million and comprised:
1. the total purchase price of AU$46.4 million, reflecting the initial purchase price of AU$36.7 million plus AU$9.7 million of additional consideration due to the deposit raising programme undertaken by Challenger Bank prior to completion, and
2. an additional payment of AU$69.3 million, reflecting the increased capital being held by Challenger Bank following its pre-completion purchase of AU$574.3 million of reverse mortgages from Heartland Australia.
Challenger Bank’s deposit raising programme, undertaken prior to completion, positions Heartland well for accelerated growth in Australia. Between 30 December 2023 and 26 April 2024, Challenger Bank achieved retail deposit growth of AU$891.2 million at a rate that is 172 bps lower than Heartland Australia’s current cost of funds.
Introducing Heartland Bank (Australia)
From 1 May 2024, Challenger Bank will begin trading as Heartland Bank – a digital specialist bank (Heartland Bank (Australia)).
Drawing on Heartland’s expertise in New Zealand, and its successful track-record in Australia, Heartland Bank (Australia) will focus on providing Australians with specialist banking products that are the best or only of their kind, through digital channels. Once Heartland Finance and StockCo become part of Heartland Bank (Australia), it will be Australia’s only specialist bank provider of both reverse mortgages and livestock finance.
Expansion will be enabled through access to retail deposits, providing the advantage of a lower cost of funds. As such, Heartland Bank (Australia) will continue to actively raise deposits – its 6-, 9- and 12-month Term Deposit offers are currently market leading.
Leveraging retail deposit funding and Heartland’s New Zealand product and distribution expertise, Heartland Bank (Australia) may pursue future opportunities to expand into new product segments, such as Motor Finance and Asset Finance. Heartland has a history of success with these products in New Zealand, and considers these sectors to be underserviced by larger banks in Australia.
Board and Management updates
Heartland Bank (Australia) Board
Heartland is pleased to announce the appointment of the new Heartland Bank (Australia) Board of Directors:
‒ Geoff Summerhayes has resigned from the Heartland Board and has been appointed Chair and Independent, Non-Executive Director of Heartland Bank (Australia)
‒ Shane Buggle, Lyn McGrath (who sat on the Challenger Bank Board prior to Heartland’s acquisition), Vivienne Yu and Bruce Irvine (currently Chair and Independent Non-Executive Director of Heartland Bank) have been appointed Independent, Non-Executive Directors of Heartland Bank (Australia)
‒ Leanne Lazarus (currently Chief Executive Officer of Heartland Bank) and Jeff Greenslade (currently Chief Executive Officer and Executive Director of Heartland, and Non-Independent, Non-Executive Director of Heartland Bank) have been appointed Non-Independent, Non-Executive Directors of Heartland Bank (Australia).
The highly experienced Heartland Bank (Australia) Board has a strong level of independence and knowledge of prudential regulatory requirements to drive growth and expansion in Australia. For more information, go to heartlandgroup.info/about-heartland/board-of-directors.
Heartland Bank (Australia) Management
Heartland is pleased to confirm the appointment of Michelle Winzer as Chief Executive Officer of Heartland Bank (Australia) will be effective from 22 July 2024.
Chris Flood has been appointed Acting Chief Executive Officer of Heartland Bank (Australia), effective 1 May 2024 and ceased being a senior manager of Heartland. Chris is expected to return to his role as Deputy Chief Executive Officer of Heartland later in the 2024 calendar year, allowing time for a comprehensive handover with Michelle.
Michelle and Chris will be supported by a management team with extensive experience in banking and financial services. For more information, go to heartlandgroup.info/about-heartland/management.
Heartland Board
Heartland also confirms that John Harvey has been appointed to the Heartland Board as an Independent, Non-Executive Director. John remains on the Heartland Bank Board as a Non-Independent, Non-Executive Director.
Following the announcement on 8 April of her intention to resign, Heartland wishes to confirm that the resignation of Independent, Non-Executive Director, Ellie Comerford, will be effective from 26 June 2024. Ellie has served on Heartland Boards for more than seven years. Heartland Board Chair, Greg Tomlinson, wishes to thank Ellie on behalf of the Heartland Board for her significant contribution, dedication and commitment to Heartland throughout that period, particularly in relation to her experience and associated advice on the Australian market.
Heartland is well progressed in its recruitment of new Australian candidates for the Heartland Board and a further market update will be provided in due course.
These boys and girls are not wasting any time! Transformation all done by the end of the week.
Fingers crossed that the go forward from this point is just as efficient!
Trust Jeff. This has been long planned and very executed. There is no doubt their is a very large market for what HGH is selling and the opportunity to add on doing what they have well proved more than capable of doing in motor vehicle and other markets is very large indeed. I predict in a years time $1 a share shall look very very cheap indeed. Trust Jeff he’s not let us down so far
2m shares gone through at $1.03 :ohmy:
If these were picked up in the cap raise thats an easy $60k profit for a few weeks work
Challenger Bank website changed today to reflect it is trading as Heartland Bank now. Probably there is a brief notice period to actually implement a formal name change?
https://www.fitchratings.com/researc...bbb-01-05-2024
Some good reading about how acquisition of CBL is viewed
Another dog stock too raising capital in the worst time of economy
Predictions seem to be coming to fruition with share price likely to dip under offer rate this week. Will be watching closely next week to see if I can pick up some more at a bargain. In hindsight not sure why I participated in the capital raise. The only one that has worked for me to date has been IFT.
westpac result yest pretty ho hum.
nim's flat and inflationary costs up.
so smaller players might be nims down , costs up ?
http://nzx-prod-s7fsd7f98s.s3-websit...531/417838.pdf
Always good to see executives and directors putting up their own $. Onwards and upwards
One buck stock
For those that wanted them below $1.00 here is your chance. 99c now.
I think there may have been quite a few that expected to make a quick profit off this CR that are now realising that breaking even will be a good result,
Absolute buy for a medium/long term hold though,
Interesting observation Filthy.
One can't buy anything for a dollar these days in this country except for a share in a NZ publicly listed company.
No need to worry about inflation on the NZX.
I know I go on but, as an aside, I'm just looking at a Direct Broking contract note from 3 May 1993 which says I bought 500 BIL for $1.01 for a total of $536. $25 brokerage and $6 trade fee. I can't remember doing this but I must have purchased them. So $1.01. In 1993. Amazing. BIL - that's me averaging down all those years ago.
What is BIL and how many shares on issue at $1??
It was Brierley Investments. I can't remember it's market capitalisation at its peak. However it was a big deal in its day. I started buying in 1987 lol - a few months before the crash.
https://en.wikipedia.org/wiki/GL_Limited
Lots of interesting corporate history here:
https://www.nzonscreen.com/title/boy-from-island-bay-2008
A market cap of 7.7 bn in 1986! Huge.
Anyway, that's my trip down memory lane, thanks to a time when we received contract notes in the actual mail.
I'll hand the thread back over to HGH shareholders and head back to the Black Monday thread.
All the favourite yield stocks of this forum taking a beating ...HGH / GNE and now even TRA ...whats cooking ? TRA 30 DSMA went below 60DSMA after a year ...start of a downtrend like HGH / GNE ? Maybe retail capitulation going on while institutional stocks like FPH / IFT / MFT/ CEN holding up better ....very interesting times for selected and retail favourite stocks ....NZ economy almost at rock bottom ...should start showing in data soon then market may become more healthier ...imo
we will never see sub $1 again.
well done to those that got some at 99 cents.
Stupid CEO..raised fund at the current sheet environment
If I were the CEO..I would walk away n cut loss.... rather than destroying the value of the company
Yes HGH is in a strong downtrend that seems hard to stop. But wow she cheap.
Every news article we see about job losses and liquidations will not help. Its going to be a tough winter for businesses. And consumers moving to higher mortgage rates- me included, paying $1300 more a month now on our mortgage. Lots will hunker down and not spend.
U have better experience of reading and making charts ...which is predicting the possibility of future based on past experiences ...so I will request u to enlighten us please
PS : But I remember this for surely ...that at every bottom all but few thought its not going to get better ever ...last one was GFC
I’m curious - in a bad economy, is there more or less demand for reverse mortgages?
probably more but the arrears and write offs are a problem.
I remember once a guru bad bank manager (someone that helps customers in deep trouble) once told me for every $100,000 in write offs the bank had to write $5,000,000 in new lending to cover it.
This is the only concern in a bad economy. Have HGH provisioned appropriately or is there some more skeletons in the closet that need to come out?
This is going to get bumpy, strong selling side this morning
...and what are they finding with their aquisition in Australia. From my working days it was "interesting" when we bought something...how much we didn't know.
Can sometimes take a while to fully unravel. My hope with this one (yeah, I know hope is not a strategy), is that they had a fair while chewing it over before completing the deal. So hopefully they had enough time and access and expertise to assess it accurately. Fingers crossed is all I can do right now.
On the plus side..HGH is no longer the biggest stock I hold......:eek2:
If i recall correctly, the reverse mortgages are relatively very low risk with the average reverse mortgage being a very low balance vs the value of the property.
The main immediate advantage of the Challenger bank acquisition is all those reverse mortgages being written in OZ have had the cost of funding significantly reduced by a couple hundred basis points.
The market is what it is but it is interesting that all those selling just now are intent upon crystalising a loss, even if they acquired for the basic $1 during the capital raise, which in turn supposedly had a margin baked in for those who participated.
I can't fathom what has really changed in the relatively short interval since that event occurred and the acquisition transaction settled that would/should drive sentiment in that way. Surely it is just a matter of patience. Is there a clearly better opportunity to deploy capital on the NZX presently and if so pray tell me where.
this is the problem with the cap raise it completely sucks demand out of the HGH universe. Everyone has had their feed. So when there are unfortunate sellers that have many reasons to sell its just the basic demand vs supply equation working its self out imo.
There is nothing to do but be patient and hold. Holders can rest easy knowing HGH will one day trade again at 1.2-1.5x book value as sure as the sun will rise in the east and set in the west.
The only better value out there (with strong balance sheets not dealing with debt problems) is probably TWR or 2CC, or if looking over on the ASX, FND :ohmy:
SKl has very low debts and STU is a free hold....lol
2040 according to Luxon today in his pre-Budget speech.
https://www.nzherald.co.nz/business/watch-live-christopher-luxon-to-deliver-pre-budget-speech-in-auckland/EGWYP3ZQPZFVNPPZSQ2TXUFJGE/
Luxon said that in 2040, New Zealanders would have a “more dynamic and productive economy” where New Zealanders returned from overseas, rather than leave; better public services, and a “comprehensive response to climate change, both on track to achieve our ambitious emissions targets, and resilient to the challenges of a more volatile world”.
Was in HGH after I bought during the selldown by George Kerr/PGC all those years ago at between 52c to 82c. George of course sold out to the ChCh 'mafia' for 56c. Was very tasty taking a 6 digit gain years later when HGH traded above $2.00.
I have been closely following HGH again since I sold out at $1.78 (took a marginal 3c hit on the way out on my second foray back into the stock) and have just started buying back.
Have a look at the chart below of the banking stocks (WBC, ANZ, NAB, CBA and HGH) and one can observe that they move in unison overall, reflecting the dynamics at play (economic, interest rates and profitability) in the Australasian banking industry.
HGH was following the pattern until late 2023/early 2024 when it became clear to the market that the Challenger Bank acquisition was going ahead and HGH was going to have to do another CR ($200m was raised in 2022) to fund the acquisition. One can see that while the other banks' share prices started recovering, HGH's sp continued to drop.
Hardly surprising as two $200m CRs ($400m) within 18 months are beyond the appetite of shareholders to absorb.
So we are now in the post CR and post Challenger Bank acquisition trading period. There are the flippers who took up the rights and underwrote the CR at $1.00 who are selling out for a quick trade (good on them) or cutting their loss.
I do not expect the selling to continue for much longer (another week perhaps) as it makes little sense to sell out at under $1.00 although the underwriters' break-even price is more like 97c (3% underwriting fee).
I am calling 96c the bottom and expect HGH's sp to track back towards what the other banks are trading at in the next 12 months. I would be disappointed (and wrong) if the sp does not hit $1.25 by end of 2024.
Now fire away your arrows and throw your rocks. Just remember though that I sold at over $2.00 and then, bailed out at $1.78 in my second foray and am buying back at $1.00 +/-.
https://nz.finance.yahoo.com/chart/H...oid2VlayJ9fX0-
Good post (#17479) Balance. The chart certainly seems to indicate that over the past month or two HGH has been oversold.
I looked at the on-market price action today and thought that after this week, maybe even quicker, we may not see sub $1 again unless there is adverse news.
HGH needs to bed in the last two acquisitions (Stockco and Challenger Bank) fully before the market will embrace the stock again and value it in line with its banking peer. Will be 2025/26 before that happens imo. Watch then for the PE and valuation multiple expansion which is of course the biggest driver of any share price.
Just an observation as well for those who are contemplating HGH as an investment - the real action does not start until ASX opens. Fair bit of the placement stock went to Australian institutions and they appear to be the flippers, selling the placement stock for a quick gain.
I think you're playing different games here. If one player just wants to double or triple their money in a few years, PE expansion is likely how that's going to happen. If the other player wants to hold forever, or at least a decade of two, it's irrelevant other than offering occasional buying opportunities.
Earnings growth + PE expansion = sp performance. It's that simple.
But don't mind SR.
He believes stock going down is a good thing and OCA using ever more debt to buy ever more expensive developments (which they cannot sell) and pay dividends is a great strategy. :t_up:
im in for a short term bottom fish only at the moment
here'e some fib levels based on retracement of the decline from 1.80 - .96
1.16
1.28
1.38 - 50%
1.49
Does this fib (ironic?) include all the new shares in it's calculation?