Some on here (not me) say that ishappening
No shareholding’s - I think as a customer.
Aboutthe only thing Snoopy hasn’t worked out is the ethnicity of borrowers and depositors
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It was in a paper, forget which one about NZ reverse mortgages picking up.
Winner has been a tremendous advocate for encouraging diversity and inclusiveness within companies and helped us understand the benefits of same and that is fine and I appreciate him sharing his experience and wisdom. All that is fine but to be clear, what makes me very uncomfortable with HGH is that they single one particular ethnicity out for very special treatment, that's something quite different.
Perhaps someone who lives in Christchurch could take the board to task over this at the annual meeting ?
I have read their annual report/review documents, and while they have obviously done a great deal of work on the Māori side of things, that doesn’t mean they are excluding other cultures. I have no doubt whatsoever that they employee people from many different cultures. They are thinking outside the square and aim to create a culturally diverse workforce/team, which they are to be commended for. I particularly like the fact that they employ many young people. Heartland seems to be a genuine and passionate employer and are doing much more than most businesses whose cultural inclusiveness is often nothing more than lip service.
For us liberal pakehas, we are a bicultural country before we are a multicultural one. In that regard, te reo is one of the country's official languages, and it is perfectly appropriate to recognise the status of tangata whenua as an important part of New Zealand's unique identity.
Era cualquier cosa. We should get back to discussing investment fundamental's.
Time to review one of the least popular overviews among Heartland's loyal shareholders: Heartlands hunger for stakeholders 'capital in' verses their generosity in paying stakeholders out.
Financial Year Capital Notes Issued during FY Capital Notes Gross Interest to Bondholders New Shares Issued during FY Total Shares on the Books EOFY Net Money Raised During FY (excl. Capital Notes) Dividends Paid ROE 2013 0 m 0 m 0 m 388.704m $0m $13.951m 7.2% 2014 0 m 0 m 75,562 m 463.266m $64.774m $19.930m 8.0% 2015 0 m 0 m 6,624 m 469.980m $9.163m $30.188m 10.2% 2016 0 m 0 m 6,579 m 476.469m $6.798m $37.690m 10.8% 2017 $22m $0.253m 40.215m 516.684m $50.991m $41.977m 11.1% 2018 $150.000m $1.100m + $5.289m 43.904m 560.588m $71.726m $47.895m 10.2% 2019 $125.000m + ($22m) + $52m $0.3767m + $6.750m + $1.082m 8.750m 569.338m $16.655m $50.599m 11.1% Total Cash Raised $327.000m $220.107m Total Cash Returned $14.851m $242.930m
Notes
1/ The Australian 2017 'Subordinated Unsecured Capital Notes' issue for $A20m, which at $NZ1= =$A0.909c is equivalent to $NZ22m, was confirmed on April 7th 2017, and therefore issued in FY2017. It was repaid in October 2018 (FY2019).
1b/ On September 17th 2017 (during FY2018), $150m of unsubordinated notes were issued.
1c/ On 12th April 2019 (during FY2019) a further parcel of $125m of unsubordinated notes were issued.
1d/ On 8th March 2019 (during FY2019) $A50m of unsubordinated notes were issued by Heartland Australia at $NZ1 = $A0.960, and is equivalent to $NZ52m of funding at issue date.
2a/ $A20m of Australian Subordinated Capital Notes were issued at a gross coupon rate of 4.15%. This implies a gross annual interest bill of: $A20m x 0.0415 = $A0.9130m. I am guessing this will have been hedged back to an equivalent $NZ amount at the bond establishment date. This implies an annual NZD payment of: $A0.9130m/0.909= $NZ1.100m. In the first year this bond was established (FY2017) it was active for only 84 days of that year. That means for FY2017, the gross interest payment associated with this bond would be: $NZ1.100m x (84/365) = $NZ0.2531m. This bond was repaid by the end of October 2018. This means the gross interest bill over 2019 was: $NZ1.100m x (123/365)= $NZ0.3767m.
2b/ $150m of HBL010 bonds were issued at a 4.5% coupon rate. This implies a gross annual interest bill of: $150m x 0.045 = $6.750m. However during the year the bond was issued (FY2018), the bond was only on issue for 286 days of the year. This means the implied gross interest bill for that year was: $6.750m x (286/365) = $5.289m
2c/ $125m of HBL020 bonds were issued at a 3.55% coupon rate. This implies a gross annual interest bill of: $125m x 0.0355 = $4.438m. However during the year the bond was issued (FY2019), the bond was only on issue for 89 days of the year. This means the implied gross interest bill for that year was: $4.438m x (89/365) = $1.082m.
2d/ The $A50m fixed note offer was established on 15th March 2019 "with a key Australian institutional fixed income investor". The investor was not identified and neither was the interest rate disclosed. Given this new bond was only issued 3.5 months from the end of the financial year the interest due in dollar terms would be small. Rather than guess, I am going to leave this new bond interest out of my cash flow picture for now.
3/ ROE figures calculated using normalized earnings based on equity on the books at the end of the financial year.
If you add up the amount of capital that 'funding stakeholders' (bondholders and shareholders) have put into the business over the last seven years, it exceeds the total dividend and interest flow that Heartland has paid out over that same time period by $289m. Some might consider that the bonds I have mentioned here are an equivalent of debt rather than equity and so shouldn't be included in this calculation. But these bonds are non bank funding from stakeholders (who could also be shareholders) and, in that sense, they are an alternative to shareholder equity. They are also listed as a 'funding source' in AR2019 note 28 'Concentrations of Funding', whereas banking arrangements are not.
(Note that the seven year time period I have chosen deliberately excludes the establishment capital raising that was used to create Heartland in the first place.)
As the table shows, Heartland have been quite adept at raising new equity capital to the extent that of the capital paid out as dividends over the last seven years, all but $22.823m has been 'reclaimed'. If we add the bond money net of interest returned from non-bank funders, then the net cash non bank stakeholder position changes dramatically to the net $289m that I previously stated was 'sucked up'!
Heartland management has been quite clever at pandering to the dividend hounds. Probably there are several holders of Heartland today who would not invest in Heartland if there was no dividend on offer, Some of the generous dividend is reclaimed immediately via the DRP. Most of the rest has been taken back via cash issues. The table shows, Heartland have been quite adept at raising new equity capital to the extent that of the capital paid out as dividends over the last seven years, all but $22.823m has been 'reclaimed'.
If we add the bond money net of interest returned from non-bank funders, then the net cash non bank stakeholder position changes dramatically to the net $289m that I previously stated was 'sucked up'! later (not necessarily from the same individuals it was paid to) via a combination of share cash issues and bond issues. The net effect is that in the seven years ended June 30th 2019, Heartland has paid out a net nothing. Yes the underlying business base has grown over that time, even if no net cash has been generated. Does this matter? As long as there are confident funding stakeholders willing to put up more cash, the Heartland business will continue to grow, But as soon as Heartland loses the confidence of its funding stakeholders, the cash needed to expand the business will dry up and growth will stop. And we all know what would happen to the share price if that were to happen. A great business will generate lots of cash. Heartland (still) generates none in my view.
SNOOPY
Can’t be right Snoops ..... but seeing shareholders have pumped in $220m of new capital to get divies of $242m it must beQuote:
snoop
A great business will generate lots of cash. Heartland (still) generates none
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