HGH - Heartland Group Holdings

[Balance]

Take out the one-off tax credit of 9.6m and it is fairly skinny for a finance company return on assets.

To say the impaired et al ratio will improve due the total book size growing is laughable - in $'s that number is sticky, as is 'investment property'

Not impressed, but no doubt the blue-eyed brigade will take it higher and assist the recent new entrants to exit at a nice profit

Agreed - very skinny indeed - ROE of 4% compares to the trading banks at all over 10%. Gives a good indication of what the upside potential is.

Underlying trend of margins, costs, profits, assets growth (half year by half year) - all positive.

Underlying operating profit trend is excellent - 100% improvement.

Unfortunately, still dealing with legacy issues and key risk and major negative is non-core property book of $104.7m now that $30m loss underwrite fully utilized.

So NTA = 88 cps with non-core property book = 27cps so NTA (worse case scenario with non-core property being worth zero) = 61 cps.

[Balance]

Zerof what you make of the HNZ cash flow statement - cash received from operating $224m less cash applied to operating activities $227m .......gives negative $3m and no tax paid in the outgoings

Might have to delve deeper .....this was just the first glance at the accounts .....cash flow always the first stop .....rest can often be bull****

Cannot look at a finance company or bank with a conventional cash flow analytical view - as cash is its stock in trade!

$37.4m into new finance receivables and lease vehicles are where HNZ has reinvested its free cash-flow.

[winner69]

Thanks balance for the enlightment

[Lizard]

Fortunately, $55m of that non-core property is now in property title with updated valuations and not just loans of indeterminate security - so unlikely to be written off to zero.

Overall, I still thought quality of loan book not as good as would like to see from their rating system, but at least overdues reduced.

I would hope for $23m NPAT after impairments next year, but some concern - as Balance suggests - re bigger impairments/property write-downs now that RECL liability has been fully utilised.

[Arbitrage]

Pity about the dividend. However i assume they are building towards that banking licence and trying to be as conservative as they can. Looking to the future, the results look good.

[percy]

Pity about the dividend. However i assume they are building towards that banking licence and trying to be as conservative as they can. Looking to the future, the results look good.

I have not yet given up hope of a divie.
They may/could announce a divie for Xmas at the AGM on 2/11/2112. That would be the icing on the cake.However you may be right,they are very conservative.

[Snow Leopard]

Not interested in a dividend for this year, bad use of cash.

Considering where they have come from then this is an encouraging result.

Rather surprised that the Tiger Secret Valuation Formula has produced a current value of $0.66.

best wishes
Paper Tiger

[Lizard]

Rather surprised that the Tiger Secret Valuation Formula has produced a current value of $0.66.

Mine only says $0.65 (for now).

[Arbitrage]

the market today, which is always right, says $0.54 and dropping....

[Balance]

the market today, which is always right, says $0.54 and dropping....

So market was right when RBD was trading at 58 cents? Or Diligent when it was trading at 12 cents? Or Telecom when it was trading at over $6?

I think the market is right today on HNZ however - the results had no positive surprises and there's real concerns about the non-core legacy property assets. Will be a while before those concerns are gone.

"The share market is a popularity contest in the short term but is a weighing machine in the long term."