Can't speak for others,however I leave passion and my hearts desires out of my investment decissions.
Old fashion values, like capable people achieveing what they set out to do, is very much at the forefront of what drives my investments.
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Ha haa, hope you aren't referring to me as an expert! I am a small time investor that's only been in the game 2 years, but had planned to get in on the Xero float but stupidly forgot and paid for my mistake (relatively speaking). As such I still have heaps to learn about how things work! Cheers Xerof
I am afraid I suffered a memory lapse when I analyzed the Heartland profit. Here is what Heartland said about their rural loans:
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Rural
The rural receivables book grew from $478.6m to $480.6m during the Current Reporting Period. NOI was $11.5m, an increase of $3.6m from the Previous Corresponding Reporting Period due to a full six months earnings from the PWF book. The minimal book growth was due to low seasonal demand in livestock trading and a low credit growth environment.
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But of course, what Heartland failed to mention was that during the year they acquired the PGW Finance loan book, excluding $90.9m of doubtful loans left with PGW.
$333.911m- $90.9m= $243.0m
On a true before and after comparative basis, including the PGW Finance Assets acquired during the year, the Heartland press release should have read:
"The rural receivables book shrunk from $721.6m to $480.6m during the Current Reporting Period."
So when you combine that with what happened in their other core business areas:
"The business receivables book contracted from $540.2m to $530.5m during the Current Reporting Period."
"The retail & consumer receivables book contracted from $954.8m to $945.8m during the Current Reporting Period."
We can see that total retained core business over the year was:
($480.6m+$530.5m+$945.8m)/($721.6m+$540.2m+$954.8m)= 0.88
In blunt terms the HNZ business contracted by 12% over the last year. Mind you given their capital restraints, it was probably a wise thing to shrink the business down. But let's not let the facts get in the way of a good story. HNZ is not a growth story. It is in fact this country's fastest shrinking bank.
SNOOPY
SNOOPY;
A couple of management tips for you;
1] It's not how many hours you spend working,it's what you do in those hours.
2[ Lending.It's not how much you lend,but the margin you make on those loans.
Snoopy ....Percy and jeff keep on taking about this margin ...Percy a lot and jeff says a key value driver
I have been through a couple of presentations and can't find much about margins ..let alone a rave about them improving. Yes cost of fuds are coming down but maybe, just maybe, they are charging lower interest rates as well
In your research snoops have you found anything about expanding margins
In case SNOOPY is still having memory lapses problems,go to the AGM presentation and read where HNZ want to be and new areas they are looking to expand on.Also read where they don't want to go head to head with the major banks.Lower cost of funds is only half of the full picture.
Also think about of my posts where I have stated HNZ is more like UDC,ie MARAC with a bank licence.
page 19/34 of agm presentation; 'Our emphasis is on cashflow and drivers of productivity;the generation of real wealth-NOT asset appreciation."
Yes I understand all that .....just looking to see the numbers that demonstrate the strategy is on track and working
Just like having the warm fuzzies what is being said is actually happening if you get the gist ...plenty of charts about all sort of things but nothing that tells me interest margins are trending up
Never been any "warm fuzzies" with this company.Speak plain English, and deliver what they say they will.
"Doubtful" does not mean unenforceable, invalid or a liability.
Any loan is "doubtful" whether it is secured or not.
In my opinion Snoopy's analysis is based on the assumptions that:
(a) All the loans from the PGC books are "doubtful", and;
(b) All "doubtful" loans are unenforceable, invalid or worthless/a liability.
Seems like scaremongering to me...