aye nice tailwind
I wouldn't be surprised though to see some language bashing the changes to the CCCFA and some guarded guidance released in respect of it. HGH still got that covid provision?
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Still had that covid provision as at June 2021
No doubt a few other things in Jeff's bottom drawer - Jeff the master of smoothing profits
Don't want big jumps in profitability ... and no reporting surprises ... even though he indulges a few times and profit is slightly more than guidance
Last year they announced an interim dividend of 4.0 cps down half a cent on the year before due to the RBNZ restrictions on payout's.
See here https://announcements.nzx.com/detail/367925
Have those restrictions now been lifted ? I have it in the back of my mind they're still in force until 30 June 2022 ?
What anyone's guess on the interim dividend ?
"The Reserve Bank (RBNZ) is easing the dividend restrictions placed on retail banks at the height of COVID-19.
Banks can now pay up to 50% of their earnings as dividends to their shareholders.
In other words, dividends can't exceed 50% of net profit after tax reported in the bank’s most recently completed financial year.
The restrictions do not prevent a bank from paying an interim dividend (for example, at the half year). In such cases it is the total dividend paid in the year that is limited by the restriction.
The 50% dividend restriction will remain in place until July 1, 2022, when the RBNZ plans to remove limits entirely - "subject to no significant worsening in economic conditions".
In HGH's case the restriction applies to 50% of earnings from their NZ banking operations only. My guess is 5c for the half year - then if all is going well, a final of 7c making 12c for the year.
Thanks pierre. Your annual expectation of 12 cps lines up with average analyst expectations and from a commercial perspective with risks apparent the interim and final split looks logical to me https://www.marketscreener.com/quote...44/financials/
12 cps grossed up for imputation credits is 12 / 0.72 = 16.67 cps and on a $2.36 share price that's 7.06% gross yield, growing in the years to come.
Lets get a bit creative here and look at the forward yield investment case for next financial year.
First lets establish the base case. The current SP is $2.36 but if we assume you get 5 cents back in a few weeks there's a good argument for saying the net price looking at this from a FY23 income perspective is this is a net $2.31 investment.
Average analyst forecast for FY23 is 13 cps which grossed up for imputation credits is 13 / 0.72 = 18.06 cps which on a $2.31 net investment per share shows a 7.82 % gross yield + growth in future years. Hmmm
Risks apparent appear to revolve around Covid and its effect on the economy. HGH lend to lots of small business's and I am seeing some of them in deep stress so I would expect their Covid provisioning will be needed in the second half of FY22.