moosie..moosie... MOOSIE !!!. ..
Stop dancing up and down on the same spot...
Tongariro is is beginning to erupt... ( TRUE )..
CONTROL YOUR SELF MAN !!!..
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moosie..moosie... MOOSIE !!!. ..
Stop dancing up and down on the same spot...
Tongariro is is beginning to erupt... ( TRUE )..
CONTROL YOUR SELF MAN !!!..
Twelve Hours to Go
2c Divi - fully imputed :)
NTA per share 90c
strange use of the phrase 'acceptable and sustainable earnings' ........... sounds like just ok and not a statement if you were aiming at that 14% ROE and $40m NPAT
Anyway in amarket where hard to lend people money probably quite 'acceptable' and they have excited punters with a decent divie .... belg for one will not be happy
the announcement will out a rocket under the share price .... punters love acceptable and staedy as she goes stuff these days
and look at that nta ... 90 cents now .... only 15 cents to go
up up and away
An update here of my post on 30-08-2012
Once again there is no mention of Tier 1 or Tier 2 in the Heartland HY2013 report.
The 'best case' scenario is that all loans are Tier 1. $1,935.1m of loans are outstanding. 20% of that figure is:
0.2 x $1,935.1m = $387.0m
Heartland has total equity of $381.1m which is within cooee of the amount of capital they need if all loans were classified as Tier 1. Good stuff.
The balance of loans is shifting too:
"The business receivables book contracted by $9.7m to $530.5m"
"The rural receivables book grew from $478.6m to $480.6m"
"The retail & consumer receivables book contracted by $9.0m to $945.8m"
Overall then, the core business is contracting which gives a lie to some of the irrationally exhuberant views on where the Heartland business is going. However I see this as positive. Heartland needs to contract while their equity position is so marginal. Getting smaller will help stabilize the business, even though share price growth will likely be constrained over the medium term as a result.
"Total non-core property assets reduced by 11% during the Current Reporting Period - from $160.2m at 30 June 2012 to $143.2m at 31 December 2012. These non-core property assets are made up of net receivables of $87.9m and investment properties of $55.3m. RECL manages the ex-MARAC non-core property assets."
Great except that calling a large basket of your business 'non-core' and sticking it under the pillow doesn't make it go away. There is rather a nasty sting contained in the interim report, regarding these property loans:
"The higher impairment expense came from the non-core property book given that the RECL Agreement was regarded as fully utilised as at 30 June 2012, meaning that Heartland now has to bear any further losses in the legacy non-core property book."
IOW the cushioning effect of all previous capital raising has now run its course. Unless the value of the non-core properties improve, Heartland could be looking at some more significant proprty loan writedowns. Not good.
There is sufficient evidence here to suggest that there are significant "Tier 2 loans" within the company that means that lack of capital is a very real concern going forwards. I will continue to wait for the next HNZ cash issue before climbing on board.
Result: Tier1 and Tier 2 Lending Covenant Test Marginal
SNOOPY
.....thanks SNOOPY, well summarized. Was also thinking of "climbing on board".........will now wait also.
I think it is highly unlikely that the HNZ Board would initiate a cash issue capital raising with the share price at it's current level without more runs on the board, and a more elevated share price to sustain the move.
A capital raising is inevitable at some stage, but going by the measured approach of the current Board, unlikely in the short term. Therefore I see more short to medium term upside in the share price.
Interesting to see they obviously don't want the non-core assets having to be accounted for year after year and the review may well involve a one off hit to clear the decks. If the economy/ property market continues to improve, and they do it right, that hit may not be too traumatic, and would IMO eventually enhance the perception and hence share price of the company considerably.
The underlying debt of the company according to the half year 2013 statement of financial position is: $33,894,000m.
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:
$2,350.10m - ($2,044.79m +$55.32m + $24.41) = $225.58m
We are then asked to remove the intangible assets from the equation as well:
$225.58m - $22.99m = $202.59m
Now we have the information needed to calculate the underlying company debt net of all their lending activities:
$33.894m/$202.59m= 16.7% < 90%
Result: PASS TEST
The relative debt has decreased since the half year reporting date, and is well within acceptable levels. The debt position has not worsened during the year despite all the deferred branch transformation expenditure that was shunted into the FY2013 year. Good stuff. Will this trend be maintained as Heartland trys to lift their profile via increased advertising? It will be interesting to see if the underlying debt position of the company remains under control.
SNOOPY
Snoopy, thanks for your posts. I always learn a lot from them. After analysing HNZ's latest results, would you not say that they are definitely moving in the right direction? And if yes, what is holding you back? Capital adequacy? Surely that is something that they will managed very carefully now that they are a bank and will be monitored closely by the Reserve Bank as well. Rgds CB