HGH - Heartland Group Holdings

[Shareguy]

Pretty sure that payout ratio change is just for the FY24 final, if my memory serves me correctly?

Yes you are right. This is about FY25 onwards

[winner (n)]

HGH share price on fire today

[BlackPeter]

HGH share price on fire today

I think your post above is true for nearly any NZX stock today. Just had a look through my portfolio - and plenty of stocks moved from reddisch (below MA200) to greenish (above MA200 or at least above MA 100). What difference a wee OCR reduction can make ....

[SCOTTY]

HGH share price on fire today

Even bigger rise in Aussie today. Up 9.95% to A$1.05 currently

[snapiti]

2nd biggest holdings for me, happy to have been very patient and purchased under $1
Looks like we may have gotten through the profit takers from cap raise
Really looking forward to the coming report, given the poor climate they have just been through the results will be most interesting   

[Shareguy]

We have HGH reporting for FY24 on 29th of August

What are we expecting.

There has been no change to guidance issued in December 23 of npat of $93m to $97m. So that's what I'm expecting.

Craigs have forecast eps of 13.1 cps and FY divi of 6.5 cps. Note 4c was paid as the interim so final 2.5cps.

It was noted by HGH that the reduction of the divi payout from 70/75 percent to 50 percent of npat is for FY24 only. What will it be going forward.

Our Jeff set an aspirational target of $200m npat for FY28. Jeff also leaves us at the end of this year. News on his replacement would be good. Chris Flood maybe......

Craigs say that they forecast $30m improvement in npat between FY24 and FY26 just from the retail deposits raised by challenger aka hgh Australia.

Current share price is $1.12. When you consider the growth opportunities the share price looks attractive. I suggest the concern over the economy and any fish hooks in the integration of Challenger is weighing on the share price.

Not long to results.

[snapiti]

We have HGH reporting for FY24 on 29th of August

What are we expecting.

There has been no change to guidance issued in December 23 of npat of $93m to $97m. So that's what I'm expecting.

Craigs have forecast eps of 13.1 cps and FY divi of 6.5 cps. Note 4c was paid as the interim so final 2.5cps.

It was noted by HGH that the reduction of the divi payout from 70/75 percent to 50 percent of npat is for FY24 only. What will it be going forward.

Our Jeff set an aspirational target of $200m npat for FY28. Jeff also leaves us at the end of this year. News on his replacement would be good. Chris Flood maybe......

Craigs say that they forecast $30m improvement in npat between FY24 and FY26 just from the retail deposits raised by challenger aka hgh Australia.

Current share price is $1.12. When you consider the growth opportunities the share price looks attractive. I suggest the concern over the economy and any fish hooks in the integration of Challenger is weighing on the share price.

Not long to results.

great post and I agree that we should expect them to meet guidance.
However watch for any commentary around a build in bad loans.
Failing that and if they meet guidance I suspect a meaningful rise to the SP 

[Waltzing]

on the bottom ? ...  if no decrease in DIV...

5 year chart  ...

[winner (n)]

I'm looking forward to selling at about $2.50 again

[winner (n)]

I hope Flood not next CEO ...nice guy but he's been there too long and entrenched in Heartland way of doing things ...they need somebody who can bring new vibrancy to the business.

Bit of philosophical thinking posted earlier -

One day, well into Jeff's long and illustrious career, a journalist asked the banker why he wasn't driving great Heartland performance like he used to.

"When Heartland was growing profits I was cold and hungry," said Jeff. "I'm not cold and hungry anymore."

Let's call this "The Jeff Greenslade Problem". How does a person or an organization keep its creative vitality once they have already become successful, already become comfortable?

This, I think, is one of the cardinal problems of any type of successful business that has seen a lot of growth. How do we keep the hunger? The sexy?

T

[Pierre]

I'm looking forward to selling at about $2.50 again

I'm looking forward to doubling of the SP and a return to dividends of around 11-12cps.

[Basil]

Great last 6 posts and I agree with all of them.

While we wait for the turning of the cycle to hopefully generate significant capital gains, (like it has before with every other turn of the economic cycle), I can't help noting consensus is for 8 cps in divvies in FY25 fully imputed which is 11.11 cps gross and a gross yield of ~ 10% @ $1.12
https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS--47041144/finances/

I can't speak for others, but for me, I find it much easier to have patience when being paid handsomely like that.  Over time, I expect dividends to return to 11-12 cps (@11.5 cps = 15.97 cps gross = 14.24% gross yield @ $1.12) but note at this stage average divvy forecast for FY26 is 9.47 cps = 11.74% gross...not too shabby when term deposits will likely be paying less than 4% by then.

I think the bottom is well and truly in @ 96 cents and its onward and upward from here and those with lots of patience will be very well rewarded.
I'll leave it to someone with better TA skills to comment but the chart set-up looks solid to me.  More than 3 months of base building at just under $1 and now a clear break up through the 100 day MA.

Average eps forecast for FY26 is 16.05 cps, FY26 PE 6.98 and I understand the full benefits of retail v wholesale funding for Heartland Australia don't flow through until FY27 so I expect further growth in eps from there.  If the annual report looks satisfactory on 29 August, I will be looking at significantly increasing my position.  It's nice to be back solidly in the green with this one now but I think there's a LOT more to come.
 

[Left Field]

... I'll leave it to someone with better TA skills to comment but the chart set-up looks solid to me.  More than 3 months of base building at just under $1 and now a clear break up through the 100 day MA.

Basil being modest about his TA skills.

A simple 1 yr chart FWIW..... TA looking auspicious IMO (tho still hasn't broken through the 200 MA.)

All looking good for HGH to fly on a positive report due 29 Aug. 

[Basil]

Quick look at peer group metrics too, (from average broker forecast off market screener).  This is the same group I have used for over a decade and about 90% of the time HGH is within 1-2 PE either side of the average, (acknowledging all are bigger banks) but as noted, I have more than a decade of experience to validate my comparison methodology.
FY26 PE
ANZ 12.5
WBC 15.1
BEN 13.5
BOQ 12.1
NAB 15.2
Average 13.68
HGH 6.98
Conclusion.  HGH's share price could double (FY26 PE becoming 13.96) and it would still be well within the normal range in terms of price relativity to its peer group on an earnings metrics basis.  Sure, there are risks, but there is quite an opportunity here too and I am struggling to see much of a downside now we have an easing cycle underway, and the bottom of the economic cycle is probably in. 

[Shareguy]

Quick look at peer group metrics too, (from average broker forecast off market screener).  This is the same group I have used for over a decade and about 90% of the time HGH is within 1-2 PE either side of the average, (acknowledging all are bigger banks) but as noted, I have more than a decade of experience to validate my comparison methodology.
FY26 PE
ANZ 12.5
WBC 15.1
BEN 13.5
BOQ 12.1
NAB 15.2
Average 13.68
HGH 6.98
Conclusion.  HGH's share price could double (FY26 PE becoming 13.96) and it would still be well within the normal range in terms of price relativity to its peer group on an earnings metrics basis.  Sure, there are risks, but there is quite an opportunity here too and I am struggling to see much of a downside now we have an easing cycle underway, and the bottom of the economic cycle is probably in. 

Yes HGH stands out. Metrics screaming well under valued.