Originally Posted by
Snoopy
Today's look at Heartland is from a slightly different angle. I am looking at the underlying 'Operating Profit' measured against the end of year asset values being financed.
The NPAT for FY2013 was a mere $6.912m. However students of Heartland will know this was not representative, because it included $22.527m of impaired asset expense (AR2013, p21). That means the underlying NPAT was:
$6.912m + 0.7($22.547m) = $22.680m
To get a normalized earnings figure before tax is paid,we have to add back the actual tax paid and the extra tax that would have been paid if the asset write downs had not happened.
NPBT = $22.680m + 0.3($22.527m) + $2.504m = $31.943m
Since there is effectively no term debt outside that due to depositors that $31.943m figure also doubles as my estimate of EBIT, or operating profit. So we can use this figure and the total finance receivables of $2,010.376m (note 18) to find the operating return on the loan portfolio.
$31.940m / $2,010.376m = 1.59%
The comparative figure for ANZ in New Zealand I calculate to be 2.104% (see ANZ thread).