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  1. #13761
    ShareTrader Legend Beagle's Avatar
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    https://www.healthline.com/health/an...ety#peppermint
    I might try some of this this afternoon.
    Last edited by Beagle; 24-09-2020 at 12:53 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  2. #13762
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    Quote Originally Posted by sb9 View Post
    Not sure what you're inferring there, y'day close was 1.25 and it shed 2.5c divvy today and still trading around 1.25 or so.
    So to be clear if I buy today I am buying ex divvy and if Im selling today I have already banked the divvy correct?

  3. #13763
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    Quote Originally Posted by mike2020 View Post
    So to be clear if I buy today I am buying ex divvy and if Im selling today I have already banked the divvy correct?
    Bingo...

  4. #13764
    percy
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    Quote Originally Posted by mike2020 View Post
    So to be clear if I buy today I am buying ex divvy and if Im selling today I have already banked the divvy correct?
    Buying ex divie today.
    However holders [ie held yesterday] will receive the divie on 9th October.
    The shares were quoted CD cum div yesterday, and are quoted today EX ex divie.
    Last edited by percy; 24-09-2020 at 01:50 PM.

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  6. #13766
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    Nice to have Access batting for HGH.They are frontline and will be offering the HGH solution as an alternative to going into care.Well done Heartland!!🙌Very clever
    Last edited by nevchev; 30-09-2020 at 08:19 AM.

  7. #13767
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    Have to take my hat off to the team. They really are alternative in lending but do it with a little class...

  8. #13768
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    Access Community Health
    Access Community Health is a leading provider of home based healthcare and support. Care for our community | Work together | Do the right thing | Look after each other.

  9. #13769
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    I already got enough of it I think but this Access Comm. Health tie up is yet another gut feel sign that I should get more.

  10. #13770
    On the doghouse
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    Default O4B for FY2021f

    Quote Originally Posted by Snoopy View Post
    The 19th March Heartland update didn't read well for business loans

    https://www.nzx.com/announcements/350143

    "Heartland expects that new lending levels in some portfolios, such as business intermediated and SME, will slow."

    But things were a bit more cheerful with the 2nd April response to the government support measures for business,

    https://www.nzx.com/announcements/351120

    "Heartland Bank has been contacting its business lending customers that are most likely to be financially affected by COVID-19, to discuss their support options. To that end, Heartland Bank is pleased to support the New Zealand Government’s Business Finance Guarantee Scheme, the details of which were announced yesterday. The Scheme enables Heartland Bank, alongside other participating banks, to provide new and existing qualifying business customers with annual turnover of between $250k and $80m with business loans to meet their urgent liquidity and bridging finance requirements while they deal with the disruption to their businesses caused by COVID-19. Heartland Bank looks forward to being able to offer customers that support option and is accepting registrations of interest on its website at www.heartland.co.nz/covid-19-update now."

    Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years.

    The real sting was in the next paragraph though:

    "Importantly, a range of other support options may be available to all Heartland Bank customers who have been financially affected by COVID-19. All affected customers are encouraged to contact Heartland to discuss support available to meet their loan repayments."

    IOW, Heartland would really prefer that businesses sort themselves out without using this particular government scheme. Quite understandable when under it, Heartland would wear 20% of any 'generous' loan that went bad. Other banks seemed to agree. On 1st May, rules around the scheme were changed removing the $250,000 minimum revenue cap and allowing businesses in the agricultural space to join.

    https://www.interest.co.nz/banking/1...including-agri

    "Secondly, the Government is removing the requirement for a “general security agreement” under the scheme."

    "This means that for a loan of more than $50,000, a bank will no longer have to "obtain security from the borrower under a general security agreement". "

    "Borrowers will no longer have to draw down on all existing facilities provided to them by their bank before applying for a loan under the scheme."

    That last sentence is important. I think it means that Heartland can effectively transfer existing loans, or at least the incremental headroom on existing loans into the scheme. Ultimately Heartland could transfer 80% of the risk of a marginal existing loan to the government. As far as I understand the banking laws, this does not reduce the amount of capital that Heartland needs to hold to support such a loan. But it does support the downside loss of capital if the loan were to go bad.

    More recently we have the "COVID-19 Small Business Cash Flow Loan (SBCS)" administered by the IRD.

    https://www.interest.co.nz/business/...e-viable-small

    "Robertson said it was necessary for the Government to write businesses loans directly, in addition to underwriting bank loans, as the latter isn't meeting businesses' needs nor the Government's expectations."

    The new IRD administered scheme provides an interest free loan for one year for up to $11,800 for a sole trader, to $100,000 for a firm with up to 50 full time employees. The scheme is only open for a one month window commencing 12th May. This must be serious competition for Heartlands 'O4B' on line small business loans. Who would take out a $100,000 loan from Heartland if they could get the same thing from the IRD at no cost? I guess if the IRD loan scheme is extended beyond 12th June , Heartland's O4B might be declared dead. But in the current business environment, I am not sure if this is a negative or a positive!

    So what does this picture suggest for profitability in FY2021?

    'O4B' was 3% of the Heartland bank loan book in December 2019, with $158m of loans on the books.
    Whereas I had specified base year earnings figures at EOFY2019, I am using figures from six months later for O4B. Why is that? It is because O4B is a very fastly growing part of the HGH business and I think the EOFY2019 figure would have been too conservative as a base figure from which to derive future earnings

    Heartland has been earning an ROE of more than 15% on this O4B portfolio.
    If O4B sinks, then the annual tax profit loss for Heartland will be about:

    0.15 x $158m = $24m

    That is likely an overestimate as O4B also offers partially secured loans of up to $250,000 (well beyond the $100,000 limit of the NZ government scheme) and secured and unsecured loans into Australia. Those boundaries are beyond the IRD scheme. I would estimate the actual annualised profit hit to be 80% of my calculated figure, or around $19m. I estimate the IRD loan scheme may have brought forward about three months worth of loan applications that otherwise might have gone through O4B. If the IRD scheme is dropped on 12th June as planned, then the impact flowing into FY2021 may only be a couple of months. That equates to a reduction in FY2021 profit of $19m x 2/12 = $3.2m.

    If the remaining 'outside of government scheme boundary' loans profit of $5m were to sink by 10%, then that would knock $0.5m off annual profits going forwards.

    Likewise if the residual O4B loan profit balance of $19m- $3.2m = $15.8m were to reduce by 10%, that would wipe $1.6m off annual profits.

    Now putting these three effects together, the expected annual profit decreases from the base year of FY2019 are as follows:

    FY2021: -$3.2m - $0.5m - $1.6m = -$5.3m
    FY2022: - $0.5m - $1.6m = -$2.1m
    Time to update where I thought things were going for O4B in May with what has subsequently (and eventually) been revealed in the annual result.

    There were $133m of 'Open For Business' (O4B) loans on the Heartland books at EOFY2019 (p15 AGM Presentation FY2019). That loan balance increased by $25m at the half year point (p9 HY2020 Presentation). But the annual increase had decreased back down to +$22m increment by FY2020 balance date (for a total of $155m). Those who only looked at the year to year increase in O4B balances only saw good news. But take in that half year peak figure from December 2019 and the signs are my much speculated slide has already started. Or was 'the slide' just a three month Covid-19 shock glitch that will all go away?

    In the interim to EOFY2020, and using an ROE figure of 15% for O4B loans (p15 AGM Presentation FY2019), we got an incremental NPAT boost for FY2020 of:

    0.15 x $22 = $3.3m

    A $22m increment to the O4B overall loans balance is equivalent to a $22m/$133m = 16.5% jump in the overall O4B loan book over FY2020. To get back down to FY2019 levels again would require a drop in the loan book size of $22m/$155m = 14.2%. So my 'base line middle case prediction' on the business loan book size for FY2021 is that it will be: 10% + 14.2% = 0.9 x 0.858 = 0.772 = 23% lower at EOFY2021 than it was at EOFY2020.

    I was forecasting a proposed 'one off shock' at the end of FY2020 which looks to have happened. My forecast EOFY2021 decline of 10% for the O4B receivables from an EOFY2019 base level, is equivalent to a 23% fall from the EOFY2020 base level. Too harsh?

    I see from the IRD website:

    https://www.ird.govt.nz/covid-19/bus...cash-flow-loan

    -------

    Latest developments

    The Small Business Cashflow (loan) Scheme has been extended until the end of 2020. Applications opened on 12 May 2020 and can now be submitted up to and including 31 December 2020.

    -----------

    So I think I am justified in holding my assumptions about the decline in O4B. No small business owner in their right mind is going to get a business loan from Heartland if they can get one from the IRD at 0%. That means very little new O4B business will be written for the first half of FY2021 at Heartland Bank!

    SNOOPY
    Last edited by Snoopy; 04-10-2020 at 08:38 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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