HGH - Heartland Group Holdings

[winner (n)]

OR is it selling to take part in FBU or AIA CR. I see opportunity..........

Just over 50% of average daily volume so doubt selling to buy FBU

But just as a good reason as any eh

As you say the optimists see opportunity

[Basil]

Under a buck screams "CHEAP" louder than a cage full of budgies.

[SCOTTY]

It is very easy to overlook as to what you are buying with your sub $1 ps including 2 banks for the price of one

[winner (n)]

Better update your peer review thingie basil to highlight how 'cheap' cheap really is

I see one if the few focus areas in new CEO role is 'investor relations' ......way things are going he better get his act together pretty quick and produce some cool glossy presentations to seduce 'investors' and get them really keen ...esp new Aussie ones and a few new NZ instos

[Basil]

Better update your peer review thingie basil to highlight how 'cheap' cheap really is

Good idea mate.  Important to look forward as first quarter of FY25 is almost over anyway so comparing FY26 forward PE's, one of these is definitely not like the others, (all figures from market screener average of analyst estimates).
BEN 13.2
BOQ 12.2
WBC 16.5
ANZ 13.3
NAB 16.1
Average of peer group 14.3
HGH 6.4

HGH share price could double and it would still be on a lower forward PE than the average.

Cue the usual response from naysayers that this peer group comparison isn't relevant...like we haven't heard that many times already     

[Greekwatchdog]

There have been too many Capital Raises to my mine. I have lost count how many they have had since they listed all those years ago.

I just want to see the businesses integrate and see if they can grow there market share outside HGH's core strengths, thus achieving the HGH's magic number over next 3/4 years.

Question is to achieve that do they need to raise more capital??
 

[Basil]

Question is to achieve that do they need to raise more capital??

Who knows for sure, but they have certainly dialed right back on their expectations of dividend payout ratio to somewhere above 50% and analysts are forecasting it very close to that percentage in the years ahead so that's a big change, and will be a big help.  In addition, there's the dividend reinvestment plan which based on my calculations has about a 26% uptake.  In effect they are likely to be paying out less than half their future earnings in cash.  I think they just need to stick to their core strengths and the more low risk reverse home loan mortgages the better.

[snapiti]

I find it somewhat concerning that HGH are about to cut their interest rates to compete for more mortgages, their new 1 year  mortgage rate is lower than my current 1 year term deposit rate and only 0.90 % above the current 1 year on offer......crickey they already been suffering from decreasing margin(NIM)

[Ferg]

There have been too many Capital Raises to my mine. I have lost count how many they have had since they listed all those years ago.

[snip]

Question is to achieve that do they need to raise more capital??

Issuing shares seems to be a necessary evil for HGH - a lot of their interest income on reverse mortgages is not actually received in cash.  But they still have to pay those making deposits and staff.

Issued shares have gone from 470m in 2015 to 931m in 2024.  An increase of 98% or put another way 7.1% CAGR over 10 years.  Some of this will be from the DRIP.

But it is having a negative impact on EPS for sure....$ sales have grown at 9.3% CAGR for the past 10 years, but when you overlay the share count increase, sales per share has grown at 2.1% CAGR.  Overlay an expanding middle line, and EPS doesn't look good on a 10 year graph.

You cannot view this attachment.

[Shareguy]

Thanks for posting that Ferg. I was very disappointed with the last result.  Slim nim, higher impairments and costs. So disappointed that after holding since it listed its on my possible bail list.

The reverse mortgage business is a gem but needs lots of cash so further cap raises is a possibility if it keeps growing like it has I would have thought?
Its stock business I also think will come right and is a great segment to be in.

I'm picking it's upwards and onwards from here and do see opportunity, Will continue to hold based on the potential with Australia but if I don't see some improvement I will sell the lot.

[winner (n)]

Hey Ferguson, nice chart

The EPS line pretty unimpressive eh ......almost sad looking .... esp in the context of the hype over the years

[Basil]

Our economy has been extremely weak since Covid. The company performance reflects the underlying weakness as well as some mismanagement of risks and an excessive focus on ESG.

Things should improve in the years ahead for those with the patience to hold...well that's the theory I am working on.

[winner (n)]

Here it is ....HEARTLAND CLIMATE REPORT 2024

All 51 pages of it ...cool eh

And PWC have audited it

Please read thoroughly ...exam later in week

[TGB]

Will have a proper read, I recently subscribed to Claude AI professional so for entertainment value here's what it's produced when asked what are the key considerations from the report for an investor:

Acquisition of Challenger Bank Limited: Heartland completed the acquisition of Challenger Bank Limited (now Heartland Bank Australia) on April 30, 2024. This gives Heartland an Australian banking license and expands its presence in Australia. The integration and performance of this acquisition will be important to watch.
Financial Performance:


Reported NPAT decreased to $74.5 million in FY2024 from $95.9 million in FY2023.
Underlying NPAT (excluding one-offs) was $102.7 million, down from $110.2 million in FY2023.
Gross finance receivables grew 6.4% to $7.2 billion.


Credit Quality: There was some deterioration in credit quality, with impairment expenses increasing to $46.4 million from $23.2 million the previous year. The non-performing loans ratio increased from 2.56% to 3.66%.
Strategic Focus Areas:


Expanding in Australia through the newly acquired banking license
Accelerating digitalization to improve efficiency and customer experience
Focusing on "best or only" product strategy in niche areas


Long-Term Targets: Heartland has set ambitious targets for FY2028, including:


Underlying NPAT of over $200 million
Underlying cost-to-income ratio below 35%
Underlying ROE of 12-14%


Reverse Mortgages: This remains a key growth area, with receivables up 20.2% in New Zealand and 19.7% in Australia.
Economic Headwinds: The company noted challenging economic conditions impacting performance, particularly in the last two months of the fiscal year.
Dividend: A final dividend of 3 cents per share was declared, bringing the full year dividend to 7 cents per share.
Leadership Changes: Jeff Greenslade retired as CEO on September 30, 2024, with Andrew Dixson taking over as the new CEO.
Regulatory Environment: As a bank operating in both New Zealand and Australia, regulatory changes and capital requirements in both countries could impact the business.

Investors should monitor the company's progress on integrating its Australian acquisition, its ability to meet long-term targets, credit quality trends, and how it navigates the current economic environment. The success of its digitalization efforts and performance of key products like reverse mortgages will also be important factors to watch.

[Basil]

Here it is ....HEARTLAND CLIMATE REPORT 2024

All 51 pages of it ...cool eh

And PWC have audited it

Please read thoroughly ...exam later in week

Where's the Te Reo version