HGH - Heartland Group Holdings

[SCOTTY]

Building Society Holdings (BSH) is now Heartland NZ Ltd (HNZ) so might as well start a new thread with the new name.

[Newman]

Building Society Holdings (BSH) is now Heartland NZ Ltd (HNZ) so might as well start a new thread with the new name.

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

[percy]

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

Love it.!!!!! lol

[Xerof]

Seems the silk purse remains a sows ear........

[SCOTTY]

Obviously ACC does not share the pessimistic view of the above posters as a SSH notice today says that they now own 5.64% of HNZ. Like me they see more of the "Promissed Land" to come.

[percy]

Obviously ACC does not share the pessimistic view of the above posters as a SSH notice today says that they now own 5.64% of HNZ. Like me they see more of the "Promissed Land" to come.

Unless they got them from their PGC holding.? They did have 54,444,099 PGC shares on 23/9/10.Will be interesting to see whether they think PGC or BSH is the road to the "Promissed Land".

[SCOTTY]

ITs worthwhile following what the ACC is up to as they have a pretty good track record. The fact that they are investing in a start-up that probably won't be paying a divie for quite a while suggests they see this as an exceptional investment (under their fund management rules) as I understand they usually have to recieve income fairly immediatley to help offset ACC claims.

Hardly a start-up belg. Marac and the other two businesses have been around for a day or two!!

[Lizard]

As mentioned previously on the BSH thread, it will be interesting to see where reinvestment rates sit going into the end of the govt guarantee, as Heartland seems to have more reliance on guaranteed deposits than the other affected institutions. Interest rates on debentures should be a pointer as to how things are going (particularly relative to any movements in bank term deposit rates).

So here is the picture of rates as they were from March until around the time of the recent PGC vote meeting:

And here is the current:


The change is pretty subtle - in the 12 month and 18 month rates, which have crept up just 0.25%. However, by comparison, I would estimate that the typical bank term deposit rate has fallen by 0.5%, so the spread against banks has been widening.

No worries here yet, but worth watching.

[bottlerboy]

NZX have announced Hearthland is to enter the NZX-50 index on June 20 (and PGC will exit it.)

[Halebop]

ITs worthwhile following what the ACC is up to as they have a pretty good track record. The fact that they are investing in a start-up that probably won't be paying a divie for quite a while suggests they see this as an exceptional investment (under their fund management rules) as I understand they usually have to recieve income fairly immediatley to help offset ACC claims.

ACC do have (or at least did have) a good record, but not for reasons of immediacy.

Levies pay the claims of today. The reserves are for the long tail typical of a compensation book that may need to pay long term injury claims years so there is very little that needs to be immediate beyond standard cashflow /treasury / cash management needs that the levies already meet. ACC are typically profitable on a cashflow basis and have little need to tap technical reserves - it's on the long tail actuarial view that reserves need to be established for.

This is also the secret of how private Worker Comp companies make money in other countries - they trade on smaller insurance margins because they understand the funds may be captive for decades before being required for claims so investment returns are consequently higher then a short tail insurance book like say State Insurance's who have to pay for Motor claims in short order.

[MANDRAKE]

Heartland New Zealand to acquire PGG Wrightson Finance

http://www.nzx.com/markets/NZSX/HNZ/...ghtson-Finance

[Master98]

Heartland New Zealand to acquire PGG Wrightson Finance

http://www.nzx.com/markets/NZSX/HNZ/...ghtson-Finance

put a few words of your point of view.

[MANDRAKE]

Well it wasn't exactly a surprise Seems a fairly conventional arrangement I guess. Good to see an assurance there will be no EPS dilution resulting frm the placement. I wonder how much in excess of 10% the ROE will eventually be? I'm not that confident it will be much, but would like to hear others opinions on that.

[Newman]

Well it wasn't exactly a surprise Seems a fairly conventional arrangement I guess. Good to see an assurance there will be no EPS dilution resulting frm the placement. I wonder how much in excess of 10% the ROE will eventually be? I'm not that confident it will be much, but would like to hear others opinions on that.

What is the equity now or would be in 2 years time? HNZ shares were issued at 88 cents, and new shares will be at 75 cents. When equity drops to 30 cent/share a ROE of 10% is not good.

[Master98]

20 mill / 300 shares @ PER 10 = 66 cents per share. (Ozzy banks PERs betwenn 9 and 15)

After private placement and SPP, the issued shares will be more than 300 mil.