Time to confess that I deliberately withheld information from you
Quote:
Originally Posted by
Snoopy
A bit more on non core property.
In the latest interim report (31 December 2013), the provision for (total) impairment is listed as $34.214m (note 11). This total includes all impairment on the receivables, not just non core property. At that date, non-core property on the books totalled $87.1m (17th June 2014 press release).
As of 31st May 2014, non core property amounted to $43.0m, and impairment on non core property was $9.7m (17th June 2014 Press Statement). That means we can work out the amount of non-core property sold in five months:
$87.1m - $43.0m = $44.1m
What we can't work out is how much the impairment relating to non core property reduced over that same period. Why is this important?
I had it relayed to me this gem from someone in real estate. If you have a relatively liquid market and your property isn't selling the reason is, the price is too high. Now I am not sure how liquid these non core Heartland properties are. But if there is any truth to the Heartland hype, they are planning to sell down the remainder of their non-core property in an orderly way.
The question I pose then is this: If the remainder of the non-core property is saleable, do Heartland expect to get $43.0m for it, or $43.0m - $9.7m = $33.3m for it?
Irrespective of the answer above, does the change in non core property impairment over five months (which we don't know) give an indication as to how close the book price is to the realistic sale price?
SNOOPY
Ok so this is where things can get tricky with regard to the numbers bandied about recently, but I did not want to introduce too many complications at that time, we were having a hard enough time without them.
So knowing this could be a bad move, but see page 6 of the Feb investor presentation
At 31-Dec-13 the non-core property consisted of:
A total book value (before provision for impairment) of $99.2M and
a provision for impairment of $12.1M giving a net asset value of
$87.1M
[A little aside: the value of non-core property that was >90 days overdue OR impaired OR restructured would have been higher that the $12.1M - but that is for information only and not to be used as a source of confusion]
So we can happily conclude that the $43.0M consists of:
A total book value (before provision for impairment) of $52.7M and
a provision for impairment of $9.7M and that
HNZ expect to realise $43.0M for them should they sell them.
There is still plenty of room for people who want to worry about stuff to worry about stuff but I suggest just chilling out as an alternative investment philosophy until the full year accounts are released and then we can roam widely on the perceived short-comings of the HNZ group financials.
Best Wishes
Paper Tiger