HGH - Heartland Group Holdings

[Red Baron]

Nearly 10% NO vote is unheard of for the re-election of such a high profile well respected Director

Obviously not just me who sent the message change is needed at Board level.

Just like a pilot in ze Luftwaffe, a director's role at Heartland eez a lifetime appointment.  The only deeference being duration.  Ze average lifetime over Vorld Var Vone of ze pilot being considerably zhorter.

I leezened to Tomlinson's re-election rant.  Vanted to hear vhat he had to offer vor ze vuture, but heard an historical treatise of fantasy and eemagination.  Zome rubbish about zupporting ze company via capital raisings (vouldn't all good zhareholders do that) and owning 10% of eet?  But then I checked out the largest zhareholder, Harrowagte Trust, and vound out that eendeed - this eez Tomlinson - and vhat he vas telling us vas true!

Zo I have new respect for Tomlinson, and a new theory on the Tomlinson vote.  Tomlinson voted heez 9.67% stake against heez own re-election as a test of vider support amongst the zhareholder base.  The vact that, despite this, he achieved a 90% vote 'in vavour' in the ze final count, zhows almost universal approval among other zhareholders!  The vinal count, a brilliant landzlide acclimation for Tomlinson's re-election.

RB

 

[lorraina]

I think Greg Tomlinson is a breath of fresh air.
We shareholders are very lucky to have him as both a major shareholder and Chairman.
HGH's strategy has been clearly signalled,is on track, and concentrating on core products ,Reverse Mortgages,Motor vehicle finance and stock finance, the future both here and Australia looks exciting.
Bring on The Challenger Banking Licence.

[winner (n)]

Seems Heartland given up on the word 'fintech'

Is 'fintech' out of vogue in the investing world these days ........ or doesn't it translate into Te Reo Maori

[Mos]

Seems Heartland given up on the word 'fintech'

Is 'fintech' out of vogue in the investing world these days ........ or doesn't it translate into Te Reo Maori

Pleased to see "fintech" fade from HGH's lexicon. Seemed like a BS VC word to try and sell ventures with no discernible way of generating a profit from their business model.

[Hectorplains]

Regarding Greg's speaking style. I think he has a slight stuttering impediment which he handles very well and should be respected for having the courage to speak publicly.

Winston Churchill too had a speech impediment and look what he did...erased half of London, eh RB. 

[mike2023]

I think Greg Tomlinson is a breath of fresh air.
We shareholders are very lucky to have him as both a major shareholder and Chairman.
HGH's strategy has been clearly signalled,is on track, and concentrating on core products ,Reverse Mortgages,Motor vehicle finance and stock finance, the future both here and Australia looks exciting.
Bring on The Challenger Banking Licence.

When do we get news on that? I bought in the last CR, I am starting to think it is a good time to buy based on divs alone.

[lorraina]

When ever Reserve Bank of Australia [and RBNZ] agree to grant them a licence.
All HGH can do is work with the regulators,which they are doing.
Could be next week or next year,or maybe even further away.
This is an odd ball ie a NZ Bank wanting to operate in Australia.Usually the other way round.
Therefore as a first,I expect the RBA will not hurry to grant it.
However with HGH so big in the Australian Reverse mortgage market I would think RBA would like their parent HGH to be a registered Australian Bank.

[Basil]

They'll need capital to grow the Challenger bank if / when the regulators approve it.
HGH may do a capital raise so that's maybe what's overhanging the SP at present and / or they may need to do a dividend reset like GNE have done.  Maybe dividend hounds don't trust average broker dividend forecasts for the next 3 years of 12, 13 and 14 cents ?, (I know I don't). 
Maybe with the economy so weak investors think delinquent loans are going to skyrocket or maybe investors think at the bottom of the cycle, like it has before this should trade on a forward PE of only 9, (9 x 16 cps forecast for FY24 = $1.44.
Whatever the reason(s), HGH SP is well and truly in the dog box for now.  How long will it stay there you are probably wondering.  I wish I had some insight to share, I don't so it's a question of how long is a piece of string?
I wonder if there is an announcement of banking license approval whether that's the catalyst for a share price recovery or maybe that has little effect until there's a lot more clarity around actually seeing the eps benefits and or about how they are going to fund the growth and what changes to their dividend policy if any.
The market has always disliked uncertainty, we know that for a fact so I guess clearing up the uncertainty must help to some degree.

[winner (n)]

They'll need capital to grow the Challenger bank if / when the regulators approve it.
HGH may do a capital raise so that's maybe what's overhanging the SP at present and / or they may need to do a dividend reset like GNE have done.  Maybe dividend hounds don't trust average broker dividend forecasts for the next 3 years of 12, 13 and 14 cents ?, (I know I don't). 
Maybe with the economy so weak investors think delinquent loans are going to skyrocket or maybe investors think at the bottom of the cycle, like it has before this should trade on a forward PE of only 9, (9 x 16 cps forecast for FY24 = $1.44.
Whatever the reason(s), HGH SP is well and truly in the dog box for now.  How long will it stay there you are probably wondering.  I wish I had some insight to share, I don't so it's a question of how long is a piece of string?
I wonder if there is an announcement of banking license approval whether that's the catalyst for a share price recovery or maybe that has little effect until there's a lot more clarity around actually seeing the eps benefits and or about how they are going to fund the growth and what changes to their dividend policy if any.
The market has always disliked uncertainty, we know that for a fact so I guess clearing up the uncertainty must help to some degree.

Jeff would be in dog box if he cut dividend .......and did another decent capital raise

Probably about fairly priced at the moment ...or not a real bargain ........high divie payout % is a drag on share price over time ...but then a punter can't have it all ways

[lorraina]

They will need to do a capital raise to set Heartland /Challenger Bank Australia on the right course.
Whether before or after the RBA have granted them a licence.?
I expect RBNZ will have some say input too.

[Basil]

Agreed and that's possibly what's overhanging the share price now but also the prospect of dividends not growing for several years or, ouch, even a dividend reset.  That said, in the medium term once this new Challanger bank is established and growing nicely, I like the prospects for dividend growth.

[winner (n)]

New capital .....another $200m like a while ago? Or more? Maybe less?

Some punters might get a bit tired/wary of filling the begging bowl again

Jeff will need to have a very good story .... Not forgetting to include the magic phrase eps accretive

[lorraina]

Lower cost of funds,more opportunities driven by RELs,StockCo, and in future vehicle lending.
All areas HGH have expertise.
We must remember why HGH was formed in the first place,and obtained a banking licence. Lower cost of funds.[retail]

ps.I guess I am like most HGH investors in taking a little off the top, in advance of a capital raise..

[Basil]

New capital .....another $200m like a while ago? Or more? Maybe less?

Some punters might get a bit tired/wary of filling the begging bowl again

Jeff will need to have a very good story .... Not forgetting to include the magic phrase eps accretive

eps accretive is the sexiest phrase in the investor lexicon.   Unsurprisingly, investment bankers and companies that hand around the begging bowl on a regular basis already know this.  Sigh....if only, (in colloquial terms), this dirty pillow talk was always true.    I am sure we can both vividly recall how both OCA and ARV have used the excitement of eps accretive talk in conjunction with handing around the begging bowl and look how "wonderfully" that's worked out for their shareholders!  Hope its not the case with HGH but the reality is there hasn't been all that much eps growth in recent years, (if you add back all the one-off exceptional items they exclude below the line).  Maybe that's the real reason the share price is in the dog box?

[winner (n)]

eps accretive is the sexiest phrase in the investor lexicon.   Unsurprisingly, investment bankers and companies that hand around the begging bowl on a regular basis already know this.  Sigh....if only, (in colloquial terms), this dirty pillow talk was always true. 

HGH reported EPS F21 was 14.9 cents

Raised $200m during F22 and on weighted number shares basis it went to 16.1 cents

But when all the new shares were counted over a full year F23 EPS was 14.0 cents

The magic of accretion eh