HGH - Heartland Group Holdings

[Left Field]

Red Baron makes me smile...... nice post......

(However..... I'm going to wait on the sidelines till HGH starts winning its AUS conquest.)

[TGB]

RB's posts are easier to read and make more sense than Waltzings

[winner (n)]

Snoopy is a pretty cool guy

[Basil]

Always good playing where the grass is greener

Grass isn't always greener on the other side of the fence. Very dry hot country subject to really terrible climate extremes. Lending to Australian farmers...what could possibly go wrong. Hmmm...
Waiheke Island looks nice and green today.

[lorraina]

Cattle numbers.
Australia 24.4 million.
NZ.........6.3 million. which includes Waiheke Island.

[Waltzing]

Hopefully the posts over on  Financial tech make more senese than the posts that arnt on this thread from ...

[Mos]

I still have confidence in the growth plan including Australia. Heartland have doubled the Australian Reverse Mortgage business since acquiring it 10 years ago; not a bad track record. Stockco has less tailwinds and has had a more challenging start under Heartland ownership, but there is not reason it can't be a solid contributor over the long term with a few ups and downs along the way that are part and parcel of agricultural businesses. The Challenger Bank acquisition should deliver long term lower cost of funds and more deposits. The overall track record of delivery over the past decade is better than most NZX listed businesses.

[Basil]

10 year performance.  Is it better than the NZX50 Mos?
Some time back from memory with release of FY23 results they boasted that total shareholder return had beaten the NzX50 over the last 5 years from memory by a modest amount but that was when the share price was about $2.

I'm pretty sure it's now a fair bit worse than the NZX50 over the last 5 years. NZX50 itself, a very weak performer and is still well under where it was 3 years ago.

I still therefore maintain the only way to get a decent return from HGH is to trade it.

[BlackPeter]

Everything I've read about future Aussie weather patterns is the increasing severity of the drought/flood cycle. And average farm incomes are expected to be down by up to 40% this financial year. That can't be good for HGH can it?

That's another horrible outlook - and I don't doubt that you read that somewhere, but is it true? and if yes - is this a blib or is it a trend?

If I look at the big picture:
- number of humans on this planet expected to peak between 2060 and 2080 - i.e. still going up.
- last time I checked humans didn't reduce their input of food, and most of it comes from agriculture;
- agricultural prices going up faster than the rest of the goods (well, this is what my wife tells me - and she is always right );

... and you are saying farming income is dropping? Makes no sense to me, but maybe you can point us to the black hole eating all this money consumers are willing to fork out for their food ...

Just for clarity - I realise that every year there will be (some) farmers who will have a miserable year. I expect that in some years many farmers will have a miserable year. No idea whether 2024 is one of the first or the second category, and - who cares? But this is as it always was and should not impact on HGH's long term business, and neither should it in my view impact on a long term assessment of the agricutural industry (and their finance).

Farmers supply something essential for humanity, and no doubt farmers will find a way to produce the stuff humans need under any conditions unless we assume humanity will starve. Maybe production costs will go up, but so will prices. And customers will pay for it.

Of course - if you say only Australia is impacted by climate change, then you might be right and its bad business to grow produce in Australia. They just could import the cheap produce from somewhere else, couldn't they? However - here is news for you: Farmers in Europe, in the Americas and in Asia do have issues as well. Too dry, too wet, too windy, too hot, too cold. And don't get me started with Africa ...

[LoungeLizard]

That's another horrible outlook - and I don't doubt that you read that somewhere, but is it true? and if yes - is this a blib or is it a trend?

If I look at the big picture:
- number of humans on this planet expected to peak between 2060 and 2080 - i.e. still going up.
- last time I checked humans didn't reduce their input of food, and most of it comes from agriculture;
- agricultural prices going up faster than the rest of the goods (well, this is what my wife tells me - and she is always right );

... and you are saying farming income is dropping? Makes no sense to me, but maybe you can point us to the black hole eating all this money consumers are willing to fork out for their food ...

Just for clarity - I realise that every year there will be (some) farmers who will have a miserable year. I expect that in some years many farmers will have a miserable year. No idea whether 2024 is one of the first or the second category, and - who cares? But this is as it always was and should not impact on HGH's long term business, and neither should it in my view impact on a long term assessment of the agricutural industry (and their finance).

Farmers supply something essential for humanity, and no doubt farmers will find a way to produce the stuff humans need under any conditions unless we assume humanity will starve. Maybe production costs will go up, but so will prices. And customers will pay for it.

Of course - if you say only Australia is impacted by climate change, then you might be right and its bad business to grow produce in Australia. They just could import the cheap produce from somewhere else, couldn't they? However - here is news for you: Farmers in Europe, in the Americas and in Asia do have issues as well. Too dry, too wet, too windy, too hot, too cold. And don't get me started with Africa ...

This was the article that prompted my thinking. There are plenty of other stats indicating tough times ahead for Aussie farmers.

https://www.theguardian.com/australia-news/2023/oct/05/australian-farms-expected-to-take-financial-hit-as-prices-dive-and-dry-summer-looms

[BlackPeter]

This was the article that prompted my thinking. There are plenty of other stats indicating tough times ahead for Aussie farmers.

https://www.theguardian.com/australia-news/2023/oct/05/australian-farms-expected-to-take-financial-hit-as-prices-dive-and-dry-summer-looms

Sure - if you  predict the near future from the position of a cyclical high, things always look sour.

I guess depends all on your investment horizon ...

[Basil]

I think the evidence for Global warming is compelling.

[Breezy]

I think the evidence for Global warming is compelling.

No its not Global warming its climate change, record amounts of snow have been recorded in many places over the last couple of years.

[Red Baron]

- agricultural prices going up faster than the rest of the goods (well, this is what my wife tells me - and she is always right );

... and you are saying farming income is dropping? Makes no sense to me, but maybe you can point us to the black hole eating all this money consumers are willing to fork out for their food ...

They tried 'Black Hole', but zhat name did not go down zo vell in ze vocus research groups.
In ze end they zettled on ze name "Woolworths"

RB

[LoungeLizard]

Sure - if you  predict the near future from the position of a cyclical high, things always look sour.

I guess depends all on your investment horizon ...

I guess so, but in my opinion HGH have got problems in the short term with profitability, margins and dividends all under pressure, and in the longer term with increasing extreme weather patterns likely to make farming in OZ a very difficult business indeed. The OZ expansion might - might - turn out to be a masterstroke, but there's also a real possibility that it will cripple HGH over an extended time period.

Anyway, I'm no longer a holder. I don't envy those that missed the last train out of town and have been left stranded on the platform, but I suppose if you wait long enough there might be another one eventually...