HGH - Heartland Group Holdings

[winner (n)]

Looking at Heartlands profit by segment I was surprised / shocked how pathetic the profit growth in Australia (mainly reverse mortgages) was.

Australia (segment) up 4.4% - Group up 15.65 - Australia under performing by a large margin ,,,hmmm

Surprise because there's so much hype about reverse mortgage growth in Australia - NZ doing OK with these but not in Australia

Maybe Australian management was beefed up as rescue mission




Here's NPBT growth by segment (F22vF21)

Motor ..........+12.8%
Rev Mortgages...+39.5%
Personal........+23.5%
Business........+5.0%
Rural...........-12.3%
Stock Co AU ....nm   
Australia.......+4.4%
Other..........-1.2%
PBT............+15.6%

[arekaywhy]

My theory is that New Zealanders, being relatively financially illiterate, have bet everything on selling houses to each other.  As a result, most of us have nothing other than a house on some grass.

This is a good market to extract that wealth from those who have highly priced assets, but no cash.

Perhaps our cousins on the West Island have a more diverse wealth portfolio?

[LoungeLizard]

1.86 and falling. That's a 14% haircut for shareholders since the SPP was announced. It will take 12 months or more for the SP to recover - IF all goes well. IF their expansionist plans in OZ does not go well, you could easily see the SP remain in the doldrums for years, particularly now that any growth in dividend payout has been put on hold.
Can't help but think HGH have got got ahead of themselves fuelled by Management hubris.
 

[Basil]

They've got a good track record with growing eps over many years now.  I'm happy to trust them going forward so I took a decent sized extra stake in the placement yesterday.

[KW]

Looking at Heartlands profit by segment I was surprised / shocked how pathetic the profit growth in Australia (mainly reverse mortgages) was.

Australia (segment) up 4.4% - Group up 15.65 - Australia under performing by a large margin ,,,hmmm

Surprise because there's so much hype about reverse mortgage growth in Australia - NZ doing OK with these but not in Australia

The problem with reverse mortgages in Australia is that you are competing against the Government Home Equity Access Scheme at a much lower rate of interest (currently 3.95%).  This is why the big banks exited the reverse mortgage market in 2018.
https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/pension-loans-scheme

Its probably going to get harder to compete there, as the Govt has just enabled lump sum payments under the Scheme. 
"From 1 July 2022, subject to passage of legislation, participants in the Scheme will be able to bring forward a portion of their fortnightly loan payments as a lump sum advance."

[lorraina]

From HGH's latest presentation commenting on their REL growth in Aussie.;page 22.

Growth was driven by the relaxation of COVID-19 lockdowns, growing
acceptance of reverse mortgages, promotion by the Australian Federal
Government of its Home Equity Access Scheme, and advertising
campaigns.

[LoungeLizard]

They've got a good track record with growing eps over many years now.  I'm happy to trust them going forward so I took a decent sized extra stake in the placement yesterday.

HGH have said themselves that dividends will be flat in 2023 - assuming that their foray into the Aussie market goes. If it doesn't and costs go up, revenues remain flat together with all those extra shares issued, I can even see dividends reducing. Shareholder value has already taken a beating and if you look at HGH over the last five years, the returns have been negligible taken into account the declining SP. I think the Board has over-reached on this one. Time will tell, but I would not want to double down and raise my stake at this juncture. Stocks like Genesis offer a better yield and arguably offer a more stable SP.

[lorraina]

A good number of us invested in HGH at well under 60 cps. Sorry to those who did not.
As well as now receiving a dividend yield of over 18% on invested capital ,we have enjoyed seeing the share price triple.
No doubt in my mind HGH will continue to perform in the foreseeable future.
As the wife and I have been sitting on too much capital, we have both added to our HGH holdings via the placement.
Also added to the wife's GNE holding not long ago.

[Basil]

If anyone's interested in the scaling ratio in the placement I applied to invest an extra $200,000 through Jarden and received 57,778 shares worth $104,000.40.  52% of the value I applied for.

[SuperMario]

If anyone's interested in the scaling ratio in the placement I applied to invest an extra $200,000 through Jarden and received 57,778 shares worth $104,000.40.  52% of the value I applied for.

This is a bit of a personal/revealing question Basil, given the info you've already provided, so feel free to not answer. What percentage of your total holdings is that? I wonder if they scale based on holdings amount rather than application amount?

[kiwi2007]

I got 58.333333% as a non holder.

[Basil]

This is a bit of a personal/revealing question Basil, given the info you've already provided, so feel free to not answer. What percentage of your total holdings is that? I wonder if they scale based on holdings amount rather than application amount?

Its clear various brokers scaled according to their available stock irrespective of one's current holding.

[Onemootpoint]

Interesting ratios. An acquaintance received around 33% of his application. His holding is quite small as far as I am aware.

[SuperMario]

Its clear various brokers scaled according to their available stock irrespective of one's current holding.

Very interesting.

[Plata]

Yikes, the USA FED might bring some rain on this parade come Monday. Maybe the SPP will be allocated below $1.80 after all!