HGH - Heartland Group Holdings

[Fiordland Moose]

Neither of Greg's "dogs" are performing at the track.  I'd wager he had a hand in sacking both CEO's and is hoping fresh leadership and a thorough house cleansing will see eventually see a return to form.  I think the common theme here is each dog has deep systemic health issues and even if they can eventually clean house properly. itself a prolonged, painful and grueling exercise, the best you can realistically hope for in the medium term after many years of hard work, is a mid-field finish.  I've done well from these in the past, but I know when the odds are stacked against you and when it's time to bet on something with better form and better prospects going forward.    I don't like backing problematic companies that keep tripping over their own feet.
Just a thought, maybe Greg isn't quite as sharp as he used to be? 

https://www.nasdaq.com/press-release/kkr-invests-in-argenta-to-accelerate-future-growth-2020-11-18

[Turkey]

So a moose proves to a beagle...

1. Every dog must have it day
2. No matter how little money and few possessions you own, having a dog makes you rich.
3. People love dogs. You can never go wrong adding a dog to the story.
4. Dogs' lives are too short. Their only fault, really.

Doggone this site provides a few twists to a tail...

[mike2023]

And some Turkey pointed it out.

[Turkey]

Good one Mike
I nearly chickened out...thought I might get a roasting for straying off topic.
It just seemed quite an animal farm moment.
The moose communicating with a beagle and the turkey watching on from another paddock.
I finished now..
Thank giveness for that.

The Turkey has sold his HGH shares at 1.78 last raising so watching with interest but not expecting share price to do much in short term. Might buy again sometime but let's see how they perform. I think Australia could be good for them long term if they execute but I think NZ economic and certain business sectors underperformance will be headwinds for them in short term.
GLTH

[Basil]

So a moose proves to a beagle...

1. Every dog has must have it day
2. No matter how little money and few possessions you own, having a dog makes you rich.
3. People love dogs. You can never go wrong adding a dog to the story.
4. Dogs' lives are too short. Their only fault, really.

Doggone this site provides a few twists to a tail...

LOL Welcome to the forum and well done selling at $1.78 and avoiding getting yourself barbequed on the HGH bonfire.  Definitely no roasting for that post but now you just have to navigate Thanksgiving Day   

Maybe its just that Greg is spread too thin these days looking after all his business interests ?
The only key advantage small investors have over someone like him is we can be nimble and back other horses when his donkey's goes astray.
If he tried finding a buyer for his tens of millions of HGH or OCA he paid $1.40 for many years ago  one wonders how he would get on...

[Otago K]

latest release on the NZX today , see 6.6m loans provision mentioned but await Feb 25 for a NPAT guidance indicated
https://www.nzx.com/announcements/442642

[Basil]

Expect an ugly half year result. $6.6m in extra loan provisions in the first quarter is not good. Growth rate in reverse mortgage lending is slowing and much of their other lending has slowed or gone backwards.
The announcement, in my opinion makes it clear FY25 is going to be extremely challenging for them.

[LaserEyeKiwi]

Plenty of positives in the 4 month (1st 1/3rd of the year?)update as well to counter that relatively small bad loan provision increase.

Reverse mortgages still going gangbusters, Oz bank on track to move to completely retail despots funded by June 2025, which will be great for margins. And those specific large loan facilities being paid back in full early, while decreasing the amount of lending, at least makes the capital ratio better right? (Forgive me if I'm misinterpreting that)

[LoungeLizard]

Continued absence of any kind of guidance says to me that they still don't have a feel for how things are going. If they are so optimistic and keep talking up their prospects then why not put their money where their mouths are?

[raW tent Buffer]

Continued absence of any kind of guidance says to me that they still don't have a feel for how things are going. If they are so optimistic and keep talking up their prospects then why not put their money where their mouths are?

You just answered your own question didn't you? They might have a feel but surely it's in everyone's best interests to not throw out wide range 'guidance' figures if they're not confident in them?

Personally I thought that was a fairly optimistic update on the whole but that might just be wishful thinking.

Disc. holding at break even

[winner (n)]

It's $200m in 2028

[Stockgathering]

Heartland remains committed to its stated ambitions for the financial year ending 30 June 2028 (FY2028), including to deliver an underlying return on equity between 12-14% while achieving an underlying net profit after tax (NPAT) of $200 million by the end of FY2028. Heartland's pathway to achieving this is through simplification, core lending portfolio growth and capital efficiency.

It would be useful knowing the one off's HGH obviously already expecting in 2028, otherwise no need to talk about normalised profits in 2028.
Also a forecast of the amount of shares on issue in 2028 seems important especially with the history of issuing new ones so regularly.

[Basil]

Agree. Talk of $200m in FY28 not only looks extremely optimistic but is meaningless without knowing how many shares will be on issue.

The Target seems like it's designed to give shareholders hope in the dark days after originally being issued as bait to get the last capital raise done 

I expect the real reported profit in FY25 after haircuts on deeply problematic assets and all other provisioning to be down on last years $75m.

But hang in there, everything will come right and we'll get to $200m 3 years later, yeah right... It's time for a Tui 

[winner (n)]

Won't need any more shares by FY28 as they going to have 14% ROE

Retained earnings (not excessive divie payout) and DRP will see them through ....no cap raise

Oops ..forgot the NSAs things and recycling of that capital

[BlackPeter]

Agree. Talk of $200m in FY28 not only looks extremely optimistic but is meaningless without knowing how many shares will be on issue.

The Target seems like it's designed to give shareholders hope in the dark days after originally being issued as bait to get the last capital raise done 

I expect the real reported profit in FY25 after haircuts on deeply problematic assets and all other provisioning to be down on last years $75m.

But hang in there, everything will come right and we'll get to $200m 3 years later, yeah right... It's time for a Tui 

Agreed - lets forget the $200m in 2028, they are pretty meaningless without stating the numbers of shares issued at that time. Pie in the sky stuff.

However - average EPS over the last 10 years was 13 cents, and this seems to be (with some superimposed jitter) a pretty constant number over the years. So, if we assume that they will (in average) stick to these 13 cents per year, than their P/E (at 98 cents) is 7.5. Not too bad, isn't it?

Add to that increasing earnings when they come out of the current crisis - and, lets face it, for long term investors it doesn't even matter, whether this will be in 2025 or 2026. So, I guess the market is pricing them already correctly (otherwise they would be really cheap at 7.5 PE) ... but I see in the midterm ways more up than down potential.

So - the question is - where do we see them in say 5 years from now (or if you like 3 years - if they achieve their 2028 targets)? Their highest EPS so far was in FY2022 - 16 cents, and at that stage their SP went up to something like $2.50. So where do we expect their SP to be when they make the $200m (which would be at current number of shares something like 20 cents eps)? Yes, the correct answer would be well above $3.

But hey - I am modest, when they achieve only half of that by 2028 and their SP climbs up to $1.50, I still would call this a good investment. Lets preserve the $3 for FY 2030 - shall we?

Always two sides to a coin ... and no matter, how long we ride on their  (probably aspirational) $200m by 2028 - the joy of tearing them down in some Internet thread might not compensate for the pain to not join in the gains they are likely to have by then.