HGH - Heartland Group Holdings

[Basil]

Reported on the other channel and elsewhere that the recent extra loan provisioning that basically wiped out their half year profit in February took the level of delinquent loan provisioning down from 3.6% to 3.4%.  WOW...how underwhelming is that!  That's just on the loans they are currently disclosing as non-performing.  How many more non-performing loans are hidden by their specialty Heartland "Extend" loan product?

 

[mike2023]

27c then a SML type revival 2027?

I half joked about this on the other channel but I think it's possible the low is a long way off.

[TraderRay]

60c is full monk temptation meme.

[Shareguy]

Gosh are we going into the sixty's. At some point this will be a buy.........

[lorraina]

They will need to do what they say they will do first.

[snapiti]

problem is what right downs are still to come from their reckless lending, which they continue to do, I also think with a slowing China on the cards from the US tariffs, now in place, we could see a meaningful recession in NZ.
Have to see the 145% tarriff on most Chinese goods be negotiated way down before HGH is a buy.
A slowing China very bad for NZ inc.
I have a very large term deposit coming off 6.3% this week, now on offer 4.3% which for me does not reflect risk that has come to light due to their reckless lending, I can get 4.2% with the big boys.
You have to wonder how many depositors are thinking the same

 

[Mr Cashflow]

Banking sector should underperform the broader market given the uncertainty and coming slow down in business activities. Cost of doing business is also  very much high.  In a weak business environment banks will end up with having more bad loans. On top of that many banks have lent money to businesses link to real estate, bitcoin, gold and other assets as well. What will happen if they start to fall rapidly.  I'm cautious on the sector in 2025.

[snapiti]

Really HGH have lost investor faith and market confidence, you have to wonder with the steps they have taken to smoke n mirrors the books they must have known investors would smell the BS. I suspect this move was the lessor of two evils as if they were more clearer with reporting the pile of crap loans and write offs all at the same time this would have been a very bitter pill to swallow.
   

[Shareguy]

They will need to do what they say they will do first.

Indeed. Won't be doing anything until next result's at the earliest. The market needs to see action on its non strategic assets and non performing loans. I notice only one director took the drp option. FB have normalised eps FY25 of 4.9 cps.

[Greekwatchdog]

3rd quarter trading update

Heartland trading updateHeartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) today provides a trading update for the three months to 31 March 2025 (Q3).Heartland remains on track to achieve net profit after tax (NPAT) on an underlying basis for the financial year ending 30 June 2025 (FY2025) of at least $45 million. Net interest margin (NIM) expanded 28 basis points in Q3 (relative to the six-month period ended 31 December 2024 (1H2025)), with improvement seen in both Heartland Bank Limited (Heartland Bank) and Heartland Bank Australia Limited (Heartland Bank Australia). Operating expenses (OPEX) in Q3 remained stable – both banks are on track to meet OPEX expectations for the six-month period ending 30 June 2025 (2H2025) (as detailed below). Cost management programmes are in place to improve operational efficiency moving forward.Asset quality improvements are starting to show in Heartland Bank's Motor Finance portfolio following the introduction of more prescriptive collections and recoveries policies for the New Zealand bank as announced on 18 February 2025. As a result, early recovery efforts for the Motor Finance loans written off in February 2025 have exceeded expectations.Heartland is focused on sustainable, profitable growth, and has seen compelling gross finance receivables (Receivables) growth in Reverse Mortgages and Livestock Finance in New Zealand and Australia.For the full announcement, see the attachments to this release:- HGH 3Q2025 trading update- HGH investor presentation - 3Q2025 trading update

https://api.nzx.com/public/announcem...206-441713.pdf

[BlackPeter]

good stuff, but link does not work for me.

Try this one:

https://www.nzx.com/announcements/450206

[BlackPeter]

NPL down and RoE up ... and they even start to realize some of their NSA's (though slower than planned).

Moving into the right direction ...

https://api.nzx.com/public/announcement/450206/attachment/441713/450206-441713.pdf

[Shareguy]

$45m NPAT is nothing to be excited about.

The big increase in overheads (increase of 47 percent year on year) at last result surprised analysts, as it was explained they were NOT mostly one offs (7 percent). A cost-to-income (CTI) ratio of ~63 percent in 1H25H and 58 percent 3Q is far in excess of its <35% FY28 target. That's a real issue and a major concern. Increasing NIM is good but they also need a step change in income with such high over heads.

As far as the NSA'S go, taking out the home loans very little has changed. 

$200m NPAT by 2028....... I suspect that goal and the CTI targets will need to be reviewed.

Don't think the market will be impressed with the update.

[lorraina]

They seem to be making progress.
Run downs in poor lending sectors is welcome, as is their more progressive collections policy.
However I do wonder why it took so long for management and the two boards to wake up to their issues.

[Basil]

Agree Shareguy. Their costs are out of control.  Management happy to gorge themselves and make endless excuses while shareholders get crumbs.