I can't see, they just do what shuld do with no promising, as they said" uncertian".
Printable View
Uncertain,no promises, but not two or three years down the track for an answer.
yeah, shorter pain better than longer pain.
Well dammed if I know.Thought the announcement that they had applied for a bank licence and would know by november would have sent the share price over 60cents.!!
You can do one of two things Hoop;either redraw your trend lines or buy enough shares to get the SP back into trajectory.
Looks to me as there were keen sellers and lack of dedicated buyers. I would think they are an excellent buy at these prices.
Buyers now ;12,000 at 53cents.
470,858 at52 cents .
[QUOTE=percy;378864]Well dammed if I know.Thought the announcement that they had applied for a bank licence and would know by november would have sent the share price over 60cents.!!
You can do one of two things Hoop;either redraw your trend lines or buy enough shares to get the SP back into trajectory.
Looks to me as there were keen sellers and lack of dedicated buyers. I would think they are an excellent buy at these prices.
Might have something to do with a sharemarket report on Stuff business website this morning guys which reported a brokers consensus that HNZ profit would be approx $15.9 million for full year. A report which has now been change/removed , funny that! Might have been a stuff up??
Well I see HNZ at 55cents today.
Charts looking better I hope Hoop.?
Mmmmh how much downside will there be if they don't get the banking license ?
The banking licence.Should they fail I would expect the SP to drop approx 5 cents for a day or two,until HNZ/Reserve Bank give reasons for decline of licence.HNZ would then advise the market what steps they are taking to fix those concerns and give a time-table to when they will re-apply.SP will then readjust.
Granting of licence I would expect the SP to under react for a day or two, then move upwards.[trajactory]
The whole point of the bank licence is for HNZ to pay less for the money it borrows.They do not have any trouble attracting funds at present.In fact they went through Govt guarantee with too much cash.Better with the licence,but not the end of the world without it.
What I find of most importance is the fact they have prepared the company to the stage where they are in the position to apply for the licence.The company must be in great shape for them to take the final step in applying for the licence.
Hopefully the ASB result will flow on to other players in the finance industry including Heartland.
Yeah Percy charts not too bad ..the odd isolated short term sell signal interwoven within the longer term positives. HNZ seems to be having a breather after its previous run up...
That was a strange intraday drop (breaks) the other day... I couldn't figure it out on the day....http://www.easyfreesmileys.com/smile...mileys-304.gif....With hindsight, on the simple chart it's got that "shake out" signature look about it...what ever it was it sure got my attention.
http://i458.photobucket.com/albums/q...NZ15082012.gif
..the odd isolated short term sell signal interwoven within the longer term positives.
Yes I see it the same way;HNZ on a gentle rising trajectory.
$15 million profit a big drop on the $20 to $24 million forecast but the s/p was alot higher too back then.
Well done HNZ>
Financial target met.
Guidance achieved.
Balance sheet strengthened.
2nd half profit of $14.7mil means they are going forward nicely.
Guidance and dividend policy to be announced at AGM.
More than I hoped for,so I very pleased.
Exceeds expectations and beats the brokers consensus by a mile.Looks like they're well on the way to becoming a Bank.
Heartland New Zealand Limited (Heartland) (NZX : HNZ) today announced a net profit after tax (NPAT) of $23.6m for the full year ended 30 June 2012, up $16.5m from $7.1m for the previous year ended 30 June 2011
Received 2 emails looks like they've revised their $23.6 m to $24.2 M.
Take out the one-off tax credit of 9.6m and it is fairly skinny for a finance company return on assets.
To say the impaired et al ratio will improve due the total book size growing is laughable - in $'s that number is sticky, as is 'investment property'
Not impressed, but no doubt the blue-eyed brigade will take it higher and assist the recent new entrants to exit at a nice profit
Quote:
Not impressed, but no doubt the blue-eyed brigade will take it higher and assist the recent new entrants to exit at a nice profit
You cynic and heathen zerof ......percy won't be buying you a drink next time you catch up
Of course it is a great result ....... 2 times NTA by Xmas
As I read the note at the bottom of page 31, it seems they are expecting to claim the entire $28.5m of losses that is the maximum they can claim from RECL (PGC) at the end of the 5 year period (in 2016).
Zerof what you make of the HNZ cash flow statement - cash received from operating $224m less cash applied to operating activities $227m .......gives negative $3m and no tax paid in the outgoings
Might have to delve deeper .....this was just the first glance at the accounts .....cash flow always the first stop .....rest can often be bull****
Good presentation though
Agreed - very skinny indeed - ROE of 4% compares to the trading banks at all over 10%. Gives a good indication of what the upside potential is.
Underlying trend of margins, costs, profits, assets growth (half year by half year) - all positive.
Underlying operating profit trend is excellent - 100% improvement.
Unfortunately, still dealing with legacy issues and key risk and major negative is non-core property book of $104.7m now that $30m loss underwrite fully utilized.
So NTA = 88 cps with non-core property book = 27cps so NTA (worse case scenario with non-core property being worth zero) = 61 cps.
Thanks balance for the enlightment
Fortunately, $55m of that non-core property is now in property title with updated valuations and not just loans of indeterminate security - so unlikely to be written off to zero.
Overall, I still thought quality of loan book not as good as would like to see from their rating system, but at least overdues reduced.
I would hope for $23m NPAT after impairments next year, but some concern - as Balance suggests - re bigger impairments/property write-downs now that RECL liability has been fully utilised.
Pity about the dividend. However i assume they are building towards that banking licence and trying to be as conservative as they can. Looking to the future, the results look good.
Not interested in a dividend for this year, bad use of cash.
Considering where they have come from then this is an encouraging result.
Rather surprised that the Tiger Secret Valuation Formula has produced a current value of $0.66.
best wishes
Paper Tiger
the market today, which is always right, says $0.54 and dropping....
So market was right when RBD was trading at 58 cents? Or Diligent when it was trading at 12 cents? Or Telecom when it was trading at over $6?
I think the market is right today on HNZ however - the results had no positive surprises and there's real concerns about the non-core legacy property assets. Will be a while before those concerns are gone.
"The share market is a popularity contest in the short term but is a weighing machine in the long term."
Once again there is no mention of Tier 1 or Tier 2 in the Heartland FY2012 report.
The 'best case' scenario is that all loans are Tier 1. $1,939.29m of loans are outstanding. 20% of that figure is:
0.2 x $1,939.29m = $387.9m
Heartland has total equity of $374.8m which is insufficient no matter what the tier classification of the loans.
Result: FAIL TEST
However the numbers are moving in the right direction. Heartland are certainly doing the right thing by retaining their earnings and not paying out a dividend.
Ironically the small reduction in the size of their loan book is helping too.
However the fact that the overall business is downsizing does mean less customer activity. Those shareholders looking for a step change in earnings are likely to be disappointed IMO.
SNOOPY
The underlying debt of the company according to the full year statement of financial position is: $33,802,000m.
To calculate the total underlying company assets we have to (at least) subtract the finance receivables from the total company assets. I would argue that you should also subtract the problem 'Investment Properties' and the unspecified 'Investments' from that total:
$2,348.69m - ($2,078.28m +$55.50m + $24.22) = $190.09m
We are then asked to remove the intangible assets from the equation as well:
$190.09m - $23.00m = $167.09m
Now we have the information needed to calculate the underlying company debt net of all their lending activities:
$33.8m/$167.09m= 20.2% < 90%
Result: PASS TEST
I note that the relative debt has increased since the half year reporting date. However it is still well within acceptable levels. I would the debt position to worsen during the year because of all the deferred branch transformation expenditure that was shunted into the FY2013 year. It will pay to keep an eye on this figure.
SNOOPY
Updating this number for the full year
Equity Ratio = (Total Equity)/(Total Assets)
Using numbers from the Heartland FY2012
= $374.8m/$2348.1m = 16.0%
This is a slight improvement on the half year position, achieved by both shrinking the loan book and not paying out any dividend from profits.
SNOOPY
Customer concentration is of course an indirect measure of potential risk. Of more interest perhaps is real risk.
Interesting reading from Note 32C in the Full Year 2012 accounts.
There is a large jump in Grade 6 categorized loans. Grade 6 is the 'monitor' category up from $93.269m to $183.814m. Grade 6 is the jargon used by Heartland when a loan is on the cusp of going bad. Obviously these loans have not gone bad at this point, and that should be emphasized. Nevertheless if even half of those loans did go bad it would wipe out a whole years profits. This is something that should make Heartland shareholders cautious. A call for new capital from shareholders is now officially an 'on the horizon possibility', even though Heartland have only said so indirectly in this obtuse way.
SNOOPY
I fail to see where you are getting these numbers or beliefs from.
There are $183.8M of Grade 6 loans and another $78.3M in grades 7-9 in the Judgement portfolio. Each grade has a % expectation of becoming a loss and the Grade 6 does not mean that "a loan is on the cusp of going bad", even with the name Monitor.
Further there are $28.3M in Active or lower categories of the Behavioural portfolio.
Read all of 32 and you will get a better feel for the state of the loans in terms of past due, impaired and provisions for impairment. Also you can find the total written-off.
best wishes
Paper Tiger
PT I have read section 32 again and I do believe that my concerns are justified. Perhaps when I mentioned the phrase 'loan going bad' that has a connotation of 100% loss. That was not what I meant and was poor phrasing on my part. The 'judgment portfolio' represents business loans where there is an ongoing relationship with the client. The financial statement clearly states that new loans are made with security judged to be between 'Strong' (Grade 2) and 'Acceptable' (Grade 5). No new loans are made under 'Monitor' Grade 6. So it can be inferred that these loans have some risk of impairment, but have not yet been provided for on the books.
The other lower category of loans, Grade 7-9, will already to provided for to an extent in the accounts. That increase in 'Grade 6 ' loans represents are significant yet unaccounted for risk for HNZ.
SNOOPY
From the bottom of p12 of the 2012 financial statements:
"The Group enters into transactions whereby it transfers assets recognised on its Statements of Financial Position, but retains either all risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognised from the Statements of Financial Position. Transfers of assets with the retention of all or substantially all risks and rewards include, for example, securitised assets and repurchase transactions." (my bold emphasis)
So HNZ retains the downside risk for their sold off securitized assets after all?
SNOOPY
Time to answer my own question. Heartland has more than enough capital ring-fenced in the accounts to operate their core office network. However their lending capital, from a finance company perspective, is still inadequate for the loan book as viewed from a shareholder risk perspective.
SNOOPY
.
Time to reevaluate liquidity.
HNZ has total borrowings of $1,939,489,000, made up principally of term deposits lodged with Heartland.
Note 24 is meant to give a breakdown of these borrowings. Once again there is no breakdown given of current and longer-term borrowings
The information given on the secularized facilities is as follows
"The Group has securitisation facilities in relation to the Trusts totalling $450.0 million. On 27 February 2012, the Group entered into an agreement with its securitisation facility provider to extend the maturity date of Heartland ABCP Trust 1 $300 million securitisation facility to 6 February 2013. On 19 December 2011, the Group entered into an agreement to increase CBS Warehouse A Trust securitisation facility by $100 million to $175 million. $25 million of this increase matured on 1 April 2012. The maturity date of the remaining $150 million CBS Warehouse A Trust securitisation facility is 22 July 2013."
IOW all activity relates to a time-frame no more than one year out in the future.
The amount of securitized holdings has increased when I would have expected it to decrease now that HNZ has fully rolled out of the government deposit guarantee scheme.
"The Group has bank facilities totalling $650.0 million (2011: $475.0 million)."
That increase is good for future flexibility.
This money has been on loaned to customers who want loans. These customers owe HNZ 'Finance Receivables' of $2,078,276,000. Again there is no breakdown as to what loans are current and longer term (note 16).
Given:
1/ I understand 'liquidity' to be a balance between the maturity profile of current debenture holders VERSES
2/the loan periods associated with those on lent funds are unknown,
then my analysis comes to a full stop (again).
The only thing I do note is that the amount borrowed as debentures and deposits from customers has gone down (by $6.022m) and the amount lent to customers has gone up (by $3.065m). Given that bank facilities have gone up by $175m over the same period this isn't an issue.
SNOOPY
I approve of HNZ using securitized loans to optimize their capital structure. But if these same loans can be used to hide liabilities 'off the balance sheet' then this is a real worry. If I was a shareholder, this is the question I would be asking at the HNZ AGM!
SNOOPY
I agree.
The fact they wanted [and have now applied for] a bank licence means they are being well behaved "boy scouts".
This adds a large measure of security for shareholders,as does the very conservative equity ratio of 16%.
Moving steadily on an upward trajectory.Time to load up as the train is about to leave the station.Toot Toot.
A guy (somebody who once posted here) made this comment in the NBR ..... "Luckily Nelson Building Society have now entered the Ashburton market with their old core values and customer loyalty"
He got the one finger salute or whatever from the HNZ loyalist .... serves him right eh
Surely old core values and customer loyalty wouldn't work in places like Ashburton .... and take business away from Heartland
Not necessarily. They might be after guidance from the RBNZ to see what more they have to do. A failed application would supply that guidance. Do you think the new man replacing Bollard will be asked to rubber stamp this on his first day behind the desk?
But is the equity to loan ratio really 16%? Not casting aspersions on your maths Percy, but is all of that equity real? Presumably HNZ got some money for those securitized loans when they were packaged up, otherwise why do it? What happens to that money when those securitized loans unwind, as they all seem to do within a twelve month period? Why is the balance of securitized loans increasing even after the government guarantee on depositors funds has expired?Quote:
This adds a large measure of security for shareholders,as does the very conservative equity ratio of 16%.
Just moving up and down with the market in general as I see it. I guess if you want to see some other pattern in the share price movement then you will find it?Quote:
Moving steadily on an upward trajectory.Time to load up as the train is about to leave the station.Toot Toot.
SNOOPY
Yes, HNZ are certainly doing what they set out to do.Great they have applied for the banking licence.Like all shareholders I am looking forward to the AGM,where we will be updated with progress and dividend policy.Looking forward to HNZ out performing the market.Up,up and away.
Up Up and Away !!.. A little to close to Fairy Tale speak for my liking..
Just a good old .. Onward and Upward is good enough for me .
To Infinity and beyond !
Can there be anything beyond Infinity PT ??
Toot Toot
Many on here will be very Chuff Chuff Chuffed :=))
Is this being influenced by potential changes at FPA? What is the view on direction for F&P finance arm in the event of a Haier takeover?
The trading banks have left a gap the size of the Grand Canyon in the SMEs, consumer/personal and asset financing markets for an entity like HNZ to capitalize on.
The banks are of course happy with their credit card operations which have overtaken those segments of the finance markets.
There's always room for the cornerstore green grocers and butchers to compete with the supermarkets.
Witness the growth and growth of the 'Mad Butcher' and 'Fruit World' around the place?
62 cents - what a bargain for those who saw the fire-sale when Dodgie Georgie got caught with his grubby hands in the cookie jar!
Buyers at 63c and climbing? What price were these spun off at via PGC?
Thanks balance.A banking licence should change sentiment and see that regained plus IMHO
Would not put to much reliance on a Divie this year though..
I agree Balance, and we have just lost another one in FPA.
Heard on the midday news (which means it must be true) that buyers have already expressed interest in buying 'some divisions' of FPA. It was a spokesman for Haier or FPA talking. not sure which.
I would imagine HNZ would have at least expressed interest in FPF.
Haier may sell FPA Finance if bid succeeds
Haier may sell FPA Finance if bid succeeds
Wed, 12 Sep 2012 11:57a.m.
Haier has signalled the possible sale of Fisher & Paykel Appliances' finance unit if it succeeds in its bid for control of the Auckland-based company.
Shares of FPA jumped about 13 percent to $1.17 on the NZX on Wednesday, nearing the $1.20-a-share offer price as investors concluded it will be hard for a rival bidder to emerge given Haier has already sewn up about 37 percent of the target company.
The "potential divestment of the Fisher & Paykel Finance business" is listed among possible changes in Haier's takeover notice.
"It will come down to whether they feel finance is a core activity or whether other people would be prepared to pay a higher price than what they think it is worth," said Craig Brown, senior investment analyst at OnePath.
In the year ended March 31, the finance business generated $37.8 million of normalised earnings before interest and tax, more than three times the $11.3 million FPA earned from appliances.
FPA sees a recovery this year, with operating earnings from appliances of $35 million to $40 million, and earnings of $35 million to $38 million from the finance unit, whose products include the Farmers Finance Card and the Q card.
Chinese manufacturer Haier, FPA's biggest shareholder with about 20 percent, is aiming for a minimum 50 percent acceptance and has agreement from Allan Gray Australia to sell its 17.46 percent into the offer, giving Haier an interest in 37.46 percent.
That "will make it difficult for anybody else to come in and gazump them," OnePath's Brown said.
"The key thing in the bid is that it's only conditional on getting to 50 percent," said Matthew Goodson, portfolio manager at BT Funds Management. With Allan Gray's stake locked up "$1.20 might get them there."
The cash offer represents a 63 percent premium over FPA's stock price of 75 cents on Friday, before Haier disclosed its interest on Monday.
NZN
Read more: http://www.3news.co.nz/Haier-may-sel...#ixzz26DGV0BIu
Will we see HNZ at 60c again?
Thought it may have tested 59cents/60 cents,but the SP has stayed up/increased on very good volume.
There was a very good article on HNZ in www.chrislee.co.nz Market News last night.
"Sale of FPF will confirm the current market value of net lending assets and balance sheet equity in the finance sector,which is unlikely to be at the discount currently ascribed to HNZ share on the market."
I feel all of us holding HNZ look forward to either HNZ merging with FPF or being rerated to trade on similar multiples.
I believe the valuation of HNZ must ultimately be dependent on supply and demand for its lending services.
The best interest rate link from the sharechat website puts me through to: http://www.depositrates.co.nz/
Heartland has a call rate of 3.75%, a 90 day rate of 4.5% and a 12 month rate of 5%. These are of course leading rates that apply to new term deposits and those that are rolling over. Customers can get higher call rates at BNZ and ANZ/National. Heartland are higher than the best of the big banks (Westpac by 0.5%) on a 3 month term. Heartland are 0.5% higher than the best of the big banks (BNZ) on a 12 month term.
I am not convinced that I would put my hard eaned deposit money with Heartland for only a 0.5% premium, given its much lower credit rating. I do not believe that Heartland is yet demonstrating the growth in demand for its services is there to sustain firstly a higher profit and as a result a higher share price.
SNOOPY
0.5% may not sound like much but to a fixed income investor, scared witless from all the scams and cons in recent years, an extra $500 per $100,000 buys their grandchildren their Christmas and birthday presents.
The fact that HNZ is holding its own in attracting deposits says something about how it is perceived and if it gets a banking licence, watch the funds flow increase.
"The board has determined to defer the AGM until the end of November,to give shareholders greater comfort that the outcome on bank registration can be meaningfully addressed at the meeting."
Sensible announcement.
Licence must be a cert then ..... and champagne at the AGM .... but heck Ashburton .... where the hell is Ashburton
Or is that a trick question .... is there an Ashburton Hotel in Christchurch?
Having a chuckle to myself about the choice of wine/champagne.PGC meetings were always 4pm friday afternoon and choice of wines was always excellent,but think you maybe right on the money;licence ,good stuff;no licence, chateau card-board.
Ashburton is the Heartland capital of NZ.In the heartand centre of the Canterbury plains being central to Christchurch and Timaru ,cultural center of mid Canterbury,home of Ashford spinning wheels a wonderful place to pass through.
However should HNZ perform it will come a place that we will look forward to making an annual pilgrimage to.
The local airport also welcomes those up up and away flyers.
Yes,yes "the I have a vision,the annual pilgrimage,the crossing of the railway tracks,an audience with Geoff,nights of line dancing will surely attract Warren and possibly Charlie.A visit to Garner Wayne's birth place,and our chance to sing along with that heartland all time favorite Love in a Fowl House." Fun,education and all the time making money.See ya there.!!!