HGH - Heartland Group Holdings

[Snoopy]

https://www.nzherald.co.nz/business/...PF3N6S4HRDE6M/

Fair points about reverse mortgages ...

Here is a non-paywalled link to that column
https://maryholm.com/nz-herald-27-may-2023/

It looks like Heartland may be facing some competition from a new way of equity release to fund retirement.
https://www.newsroom.co.nz/a-new-way...y-for-retirees

SNOOPY

[thegreatestben]

I'd hardly call that competition, losing 35% of your ownership stake and the capital gain with that is a massive compromise. I did some quick math and you're missing out on a pretty significant amount of money after 10 years.

[percy]

I'd hardly call that competition, losing 35% of your ownership stake and the capital gain with that is a massive compromise. I did some quick math and you're missing out on a pretty significant amount of money after 10 years.

I did some figures a few years ago which showed the capital gain,covered the amount borrowed.

[Alekhine]

Thanks for this, Snoopy. I found equity release article very interesting. I think that there are some challenges with equity release though, as giving away part ownership in your home will create some complications, especially if you want to do renovations and need someone else's permission. Even if it does take off (which I think it won't), it is still a good few years away from being in a postion to compete with reverse mortageges (as implied in the article) and the lack of regulations around it may make some customers nervous- I would be!

I also came across the article on why big banks aren't interested in reverse mortgages, which may be interesting for others, if they haven't seen it yet:

https://www.newsroom.co.nz/big-banks...ortgage-market

[Swala]

Article by Jenny Ruth today

https://open.substack.com/pub/justth...utm_medium=web

[RTM]

Article by Jenny Ruth today

https://open.substack.com/pub/justth...utm_medium=web

Thanks for posting the link Swala.
Great advertising for Jenny as well !

[winner69]

A few weeks ago headlines in Oz were “Australian farm incomes set to fall 41% as El Nino limits rains”

Wonder how things are turning out ….. hope Stockco are still doing OK

[Snoopy]

A few weeks ago headlines in Oz were “Australian farm incomes set to fall 41% as El Nino limits rains”

Wonder how things are turning out ….. hope Stockco are still doing OK

I don't think the big banks in Australia will be looking to boost their rural lending. But from the StcckCo website:

https://stockco.com.au/livestock-fin...stock-advance/

1a/ We work with you to assess the current market value of your livestock...
1b/ then advance an agreed amount up to that figure – letting you continue to maximise the price of your stock, rather than having to sell when you need cash.

2a/ You background, finish or feedlot your animals...
2b/ then sell when you choose, at the best possible time to maximise your profits.

This sounds similar to the PGG Wrightson Go-Livesrtock model -except- unlike PGW-, it looks like StockCo does not have direct ownership of the livestock. But both arrangements leave farmers to 'do what they do best' (raising livestock) and allow farmers to cash in their livestock at the optimal body weight and so repay the 'livestock rent' (interest) owed to the respective funding organisation, when their livestock is sold at the optimum time. If the big banks are unwilling to do this kind of lending in tough farming times, then the tougher farming conditions get, the relatively better it is for the likes of Stockco. Feel free to correct me if I have got this wrong. But the tighter the big banks squeeze farmers, the better it gets for StockCo is how I read things.

SNOOPY

[Muse]

A few weeks ago headlines in Oz were “Australian farm incomes set to fall 41% as El Nino limits rains”

Wonder how things are turning out ….. hope Stockco are still doing OK

yes I think the risk is that farmers, who had rebuilt flock numbers over the last year, cull this season short in anticipation of dry conditions, and won't require as much working capital funding from stockco. part of the reason I won't be surprised if HGH come in at the low end of guidance or below.

[iceman]

yes I think the risk is that farmers, who had rebuilt flock numbers over the last year, cull this season short in anticipation of dry conditions, and won't require as much working capital funding from stockco. part of the reason I won't be surprised if HGH come in at the low end of guidance or below.

You’re right about Aussie farmers culling their cattle in record numbers and dumping it into the market.
That creates a lot of immediate pressure on farmers in NZ that could be requiring some bridging funding.

The Aussie farmers will be requiring support from 2024 onwards.