HGH - Heartland Group Holdings

[Basil]

I guess this is the thing with speculations. If the economy calms down, everybody will applaud them for their wise foresight to buy now (when times are bad and stuff is cheap). If however things don't calm down, then, well, yes - people will be less complimentary.

Difficult to predict, but yes - there have been times when I was less worried about my investment into Heartland ...

I am pretty sure that's a sentiment many of us share.
Off topic but I can't help myself comparing the way Heartland go about expanding in Australia with another H in my portfolio, HLG.  One Glassons retail shop at a time only after a comprehensive evaluation of various site opportunities available and their lease terms and careful measurement of pedestrian count.  Sorry, there are no prizes for guessing which approach I prefer, (also reflected in the amount of capital I have allocated to each opportunity).
One supposes that if he gets it right there might be a bigger bonus for taking the "hare" approach than the tortoise one. 
(Bad dog, surely Jeff wouldn't risk our money Willy Nilly just to collect a bigger bonus....I must try and stop being such a cynical old mutt)

[lorraina]

Directors and management will not only be looking after your's and my money, BUT THEIR OWN as well.
RELs are now well established in Aussie, and Stockco is a business HGH understand ,and which has very strong growth prospects.
Challenger Bank acquisition will lower funding costs.

[Basil]

Directors and management will not only be looking after your's and my money, BUT THEIR OWN as well.
RELs are now well established in Aussie, and Stockco is a business HGH understand ,and which has very strong growth prospects.
Challenger Bank acquisition will lower funding costs.

Fair enough mate.

[winner (n)]

Aussie banks creaming it

Hope market responds favourably - might flow over to HGH share price

Market eyes 'purple patch' for banks, tipping $28b in profits


https://www.smh.com.au/business/bank...21-p5brss.html

[Basil]

Got my printed copy of the annual report this afternoon.
Front cover, Inside front cover and first page dedicated to a lesson about the Pacific people's star compass...oh my goodness.  What a waste of paper.  Hope the rest of the annual report improves from that appalling start.
Here's a free heads up to Geoff the Chariman and Jeff the CEO.  These days guys, we have a thing called a GPS system which is far more accurate down to less than 1 metre variation.  I use it whenever I am boating during the day and you know what, you can't see the stars during the day anyway. Radar systems are good at night too, way better than the stars.  Please get with the program !

I am really starting to wonder about these guys almost obsession with all things Te Reo, cultural diversity and inclusion and all other things ESG.  I'll take some anti nausea tablets, have a big sick bowl on standby and see if I can stomach reading the rest of the report at some stage.

Thing is if they're not obsessing about all things cultural and ESG it seems its all things digital and transformational.  Other banks going nicely and Heartland being treated harshly by the market.  Obviously, I'm not the only one that's not especially enthusiastic about their current approach.

I really wonder if management and the board are not under duress by one of their biggest Iwi customers to do things the Iwi way or they lose the business?

It would be nice to actually put them under some pressure with some pointed questions at the annual meeting and see them squirm, but alas that pleasure has been taken away from me as well, unlike almost all other companies who are happy to have physical meetings.  Hmmm 🤢

Just let the current business's grow organically for goodness sake... and far less cultural and ESG B.S. please.

[Waltzing]

Fantastic analysis ... cant wait for the rest !!!!

dont forget your free men....

1689 bill of rights..
1990 bill of rights..

must be after some big iwi accounts.

[Waltzing]

Go On become Men International .....

warning its R16...

https://www.youtube.com/watch?v=pat2c33sbog

[lorraina]

Top 11 shareholders.

https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6937955/shareholdings?backurl=H4sIAAAAAAAAAEWNsQ7CMAxE%2FyZLh8LAaCEWGOiARH%2FAik0bKY1D7IL696SiiO3d052uzTiwtl6mjClUUsbix%2BMTxgoWMVEzFJlzM0qkkAZtopHjZMGWfsmscOq6Ld8NbdbLWv%2FqkLyUfC4ywca9gEOiwqr%2F9SauvLylEDi1eg07F8MUDPYHp48qaV2%2BMHmmGyaOYGVmNwkx%2FPwHkpXW684AAAA%3D

[winner (n)]

Had a coffee with a mate the other day who brought along one of his mates who is a high finance guru of sorts.

I asked if they thought if there was a pecking order in investing but that lead to a conversation about the pecking order theory in finance and Heartland and their recent capital raise

Apparently that theory is all about how companies prioritize their sources of financing.

The pecking order is to use retained earnings first and then when those run out go the debt way and when its not prudent to issue more debt then go the new equity way. All to do with risk and cost of capital etc. Of course nothing is simple in high finance.

But an interesting comment he made was that raising capital was often forced upon companies and wasn't always their preferred path and such action was sometimes seen by outsiders as a bit of warning sign of stress. Not say anything specific re Heartland

Chats over coffee can be interesting and sometimes learn something new

[Shareguy]

From AGM

5. Conclusion
To conclude, I can confirm that we remain on track to deliver FY2023 net profit after tax within the guidance range of $109 to $114 million, excluding any impacts of fair value changes on equity investments held and excluding the impact of the de-designation of derivatives.

[Basil]

No eps growth forecast this year and we have to watch and listen to the major Australian banks posting huge numbers and strong growth....such "fun" 

For some light relief yesterday I thought I might be brave enough to skim the annual report, carefully skirting the huge free Te Reo lessons sprinkled liberally within the report and dodging the almost endless ESG and sustainability nonsense I arrived at page 68 therein and noted with some satisfaction that the total shareholder return for the last 5 years of 55.1% had beaten the NZX50 at 49%, fabulous but oh dear, my joy was very short lived when I realised this was to 30 June 2022 when the HGH share price was $2.10.

Hmmm....I jumped to the end and can see there is 156 pages of stuff to digest and much of it is politically correct nonsense.    Life is too short, and I had no free Air New Zealand sick bags left at that point.  Surely the other report would give me some relief and it certainly did. Speaking of page 68, the other annual report that arrived last week (HLG) contains just 68 pages of information and is sprinkled liberally with good eye candy and all of it in good old-fashioned English.  Talk about a case of chalk and cheese digesting those annual reports!

[lorraina]

I watched the meeting waiting for your pointed questions.
Did you water them down,or not bother asking them.?

Having nearly doubled our holdings in HGH I am counting down the days to Feb's interim divie..
126 to go...loll

[Basil]

Sadly, every time I have asked very difficult questions at online meetings in the past with other companies they are simply ignored.   
Don't you think they're being a little over cautious only having an online meeting ?  Maybe they didn't want any pointed questions about their strategy?
The other thing that occured to me skimming the annual report is although we all love to talk about the low risk reverse home loan lending for old folks, nobody really wants to talk about the higher risk ~ $1.4 Billion dollars of motor vehicle loans very much.    Can't help myself wondering if their loan default provisioning will be enough in what is shaping up as a pretty serious cost of living crisis for a lot of people ?
Talk about once in a decade financial challenges in the annual return addresses seems like fair commentary to me.  Interesting times we live in that's for sure!  Shares about fair value at the current level I reckon.  Go back 5 months and I confess I was hoping for 13.4 - 14.0 cps in dividends in FY23.  My expectations have had to be seriously recalibrated as it seems to me HGH will be capital hungry for many years to come.  I think 11 cps in FY23 although I see the average analyst is forecasting 12 cps and 13 cps in FY24.  https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/financials/

[lorraina]

HGH's Marac's motor vehicle lending has been strong for over 20 years.
[most probably more like 50 years.]
Most people need a car to get to work.No car,no work,no work no dough,no dough no life..

[Basil]

No fun travelling on public transport with all the very latest Covid variants floating around in the air, no doubt about that! 
I would think people have never been more motivated to keep their car than at present!  For that reason, I think Turners will come through this okay too but there are risks and some people are really hurting, and I think it's safe to say there will be more repossessions than normal during this cost-of-living crisis.