HGH - Heartland Group Holdings

[Waltzing]

Da zeitgeist hat sich nicht geändert....

[Basil]

However, ze counter point to your comment Basil eez, eef you zuggest zhat ring fencing out loans more zhan a year overdue eez not adequate, vhere vould you build your, "This position is adequate' vence?
RB

No idea really because their entire non reverse ledger is such dark and murky waters, and they are so incredibly economical with the truth. 

[Rawz]

Ze norm vith vinance companies eez to have a 'provision for bad debts' against vhich 'annual bad debt expenses' are 'written off'.  You are zaying zhat Harmoney does zhings differently?  Please explain.

RB

 

Lol okay. Yes I understand how it works.

Not sure why you are refusing to acknowledge my original point.

Perhaps you will believe the market, if not me.

HGH release update- market sends it down 16%
HMY release HY25- market sends it up 26%

[Syd]

A long recovery from these levels, 86 cents, Ouch. Just not worth the wait anymore and big wakeup call for everybody especially (mis)management. traded out and into TRA just before the upgrade so  happy !

[Basil]

Yeap, TRA up 33% since the HGH annual meeting in late October and HGH down 15%.  A 48% difference in relative performance.  Very pleased I am blessed to have the nose to sniff out the difference between quality and rubbish which I clearly articulated on here.  I think the institutions have had enough of the B.S. coming from the board at HGH and its headed down to fresh new decade lows over the next few months.

[winner (n)]

Heartland will report on its 1H2025 financial results, and provide a NPAT guidance range for FY2025, on 27 February 2025.

Wonder what that 'guidance range' will be?

If the likes of Bendigo any indication one shouldn't be surprised if Challenger result a bit weak. Jeez what will happen then.

Next Thursday more colour around real performance

[LaserEyeKiwi]

Heartland will report on its 1H2025 financial results, and provide a NPAT guidance range for FY2025, on 27 February 2025.

Wonder what that 'guidance range' will be?

If the likes of Bendigo any indication one shouldn't be surprised if Challenger result a bit weak. Jeez what will happen then.

Next Thursday more colour around real performance

They gave color on the Australian operations in the announcement last week:

"The Australian bank, Heartland Bank Australia Limited, is unaffected and continues to perform well. Growth has returned in its Livestock Finance portfolio, while strong growth continues in its Reverse Mortgage portfolio. The transition from mostly wholesale funding to a wholesale and deposit funding mix is progressing well."

Reverse mortgages still growing rapidly - will soon be the majority of company assets.

[Basil]

As forewarned, an absolute shocker.  Expenses and impairments up in a profoundly shocking way.
More pain to come is my call through the second half and into FY26.
https://api.nzx.com/public/announcement/447501/attachment/438538/447501-438538.pdf

Great that even though there's ostensibly no earnings per share, they're giving people back 2 cents of the $1 capital raise last year and keeping them onside for the next capital raise.  That's one clever thing they've done.

[winner (n)]

They gave color on the Australian operations in the announcement last week:

"The Australian bank, Heartland Bank Australia Limited, is unaffected and continues to perform well. Growth has returned in its Livestock Finance portfolio, while strong growth continues in its Reverse Mortgage portfolio. The transition from mostly wholesale funding to a wholesale and deposit funding mix is progressing well."

Reverse mortgages still growing rapidly - will soon be the majority of company assets.

And the 'colour' of result is lower NPAT than pcp

[Basil]

No progress that I can see on realizing their so called non-strategic assets so expect huge write-downs to come on them in due course.  Sticking with their underlying profit nonsense just keeps losing them credibility in my opinion as all costs incurred are just normal matters across the bottom of the economic cycle and as they try and build things in Australia.  They can highlight the extra costs incurred but this underlying profit thing they started a few years ago is just creative accounting pure and simple.  Maybe they do reported profit of about $30m this year, (about 3 cps). Maybe they report a huge loss for the full year if they dump their delinquent debts, (NSA's) in a trade sale, and take more losses on problematic parts of their loan book, who knows.  Loan growth is slowing and expense growth and bad debt write-offs is growing exponentially.   Some holders will be hoping the worst is behind the company.  I think they're FAR too optimistic hoping that.  Lots more skeletons in the closet that the previous CEO hid away so he could bank his enormous annual bonuses.  Just as well shareholders can rely on the current management team to take a far more prudent approach to risk management going forward...oh wait, that's right, they can't....

[winner (n)]

Read the preso and listened to the Q&A at the briefing

Conclusion .....they all are suffering from a bad case of delusional optimism

You'd have to take anything they say with a grain of salt 

[BlackPeter]

No progress that I can see on realizing their so called non-strategic assets so expect huge write-downs to come on them in due course.  Sticking with their underlying profit nonsense just keeps losing them credibility in my opinion as all costs incurred are just normal matters across the bottom of the economic cycle and as they try and build things in Australia.  They can highlight the extra costs incurred but this underlying profit thing they started a few years ago is just creative accounting pure and simple.  Maybe they do reported profit of about $30m this year, (about 3 cps). Maybe they report a huge loss for the full year if they dump their delinquent debts, (NSA's) in a trade sale, and take more losses on problematic parts of their loan book, who knows.  Loan growth is slowing and expense growth and bad debt write-offs is growing exponentially.   Some holders will be hoping the worst is behind the company.  I think they're FAR too optimistic hoping that.  Lots more skeletons in the closet that the previous CEO hid away so he could bank his enormous annual bonuses.  Just as well shareholders can rely on the current management team to take a far more prudent approach to risk management going forward...oh wait, that's right, they can't....

Well, not sure how you read page 9 of the presentation, but for me this looks like they had some progress in realizing the NSA's? 14% down, and this does not look like write offs. As well, the remaining NSA's don't sound that bad to me like you try to convey. Even if it might be difficult to recover 100% of some of their home and farm loans given at the property high days, it does not mean that all is lost.

As well positive to see that most of their loans are in the South Island. Other than in Auckland are property prices in the South already going up again. Just looking at our (semirural) property - the GV went up by nearly 5% from Sept 21 to Sept 24.

Overall - yes, not a flash result, but as per forewarning and expected. Markets haven't been caught surprised - the bad news was already priced in.

Sun will keep rising tomorrow, and, I am sure, as well over the Heartland ;

[Basil]

Like Balance on the other channel, I couldn't be bothered wading through all their presentation riddled with half-truth's, corporate B.S. and self-congratulatory praise. It's nauseating to say the least.

Like Winner above, I don't trust anything they say and neither does the market with the shares now trading at an all-time low which speaks for itself.  You have to go back to the previous ticker code more than a decade to see it trading at a lower price point.  The market has lost confidence in management, and they have an enormous task in the years ahead to rebuild confidence.

[winner (n)]

From other place Jenny Ruth says Heartland has shuttered its online-only mortgage offering. Why couldn't it make it work when it didn't have the branch network, staffing or legacy systems of those it was competing against and therefore had much lower costs?

[lorraina]

I could not understand why they even bothered with this low margin sector.
Poor use of capital.
I still think it will take longer to sort out their current mess,and if they manage growth in Aussie they will need more capital to support it.REL's require capital up front.