LOL Percy No surprise you mentioned your favorite words... "Well Positioned" indeed :)
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LOL Percy No surprise you mentioned your favorite words... "Well Positioned" indeed :)
exactly what I was wondering- might be better to take the DRiP and subscribe SPP assuming its scaled back....???
Pig in Poke.!
With the SPP price set at $1.46 I would expect massive scaling.
An off the top of my head figure would be, apply for $15,000 worth and be lucky to get $5,000.
I really don't know.
Last one I did not bother with was TIL.Mistake as their allocations were generous.
Your guess is as good as anybodys! Think I'd better go for the $15k then...
Harmoney confirms launching in Australia (Brisbane) https://www.nbr.co.nz/article/harmon...on-cs-p-199747
From memory there were just over 10,000 shareholders stated in the last Annual Report. They will be fighting for the $20M. If 50% of them applied for the full $15k, each would get 4k. I would not be surprised to see it scaled back to that level or even bigger scaling. These SPP are always difficult to decide on as one has a lot of money tied up for a long time just to have most of it returned without interest. At least this time we know the price so that's a bonus :-)
No email received to participate in the SPP, but on NZX there is an offer document, with a link to apply online at www.heartlandshareoffer.co.nz.
Unfortunately, heading to this link brings up a page stating "This form is currently unavailable" and asks for a password to view the website ... not a good start. :mad ;:
Smaller small shareholders are perhaps less likely to have $15,000 available for the SPP application, so in a way there is a hit-and-miss inbuilt scaling factor in these SPPs.
The fairest way to raise equity capital would be via renounceable rights issues, so that those shareholders who do not have readily available funds can sell their rights. However unfortunately it must be quicker and cheaper to drop a placement with the big participants and give crumbs to small shareholders via a lolly scramble.
Agree with that although to be fair I remember as a kid that lolly scrambles can be a lot of fun and at least they've doubled the amount of lollies :)
Share purchase plan details here https://www.nzx.com/files/attachments/253364.pdf
EPS growth (period on period) less than 11%
On current profit guidance of up to $60M - FY EPS growth would be less than 5%. We need an upgrade ($63M please) .
So going to do a small A$15M Tier 2 thing with the Aussie's then!
Dividend of 3.5c and a plea to take the DRiP.
Bank obviously struggling what with the constant need to find real money :t_up:.
Best Wishes
Paper Tiger
I am surprised they have not done a decent Tier 2 in NZ. Say $60 to $80 mil.
Yes the growth has to be real eps growth.I don't see why it can't be.
Strong Digital loan origination should tranlate into solid eps growth.
Roger I understand that the DRP is to retain earnings and this goes partly towards increasing profits on retained earnings.
I also understand that the purpose of share investing is dividend collecting.
What I like to see however if a company expect to be able to make good returns on retained earnings it should retain those earnings.
If not pay a (large) dividend and use up the imputation credits.
But what is happening now does not seem to be fair to all share holders or cost efficient to HBL.
Not fair because some larger share holders get a first dip at a discounted price and the very small share holders are getting a disproportional increase in their holding.
Not cost efficient because the cost of contracting the transfer agent to pay out the dividend and organising the share purchase plan can both be eliminated / reduced.
Its not about what you or I want forest, in my opinion its about respecting individual shareholders rights to chose whether they want dividends or shares in lieu of dividend.
I am sure you would have noticed the sea of grey hair at many companies annual shareholders meetings. In my opinion many small shareholders are relying of dividend income to support their retirement lifestyle.
I think keeping the dividend at 3.5 cps, (rather than increasing it in line with the 14% earnings growth to 4.0 cps) strikes a good balance this year considering the company is experiencing such strong organic lending growth across all divisions. Regarding the share purchase plan in my opinion a renounceable rights issue would have been fairer to all parties but it would appear on the face of it this option may be more expensive. I guess its only natural that holders of (for example), a six figure number of shares feel a bit miffed that someone holding as few as say 1000 shares enjoy the same rights under the share purchase plan. It is what it is, life isn't fair all the time but I think the terms of the SPP for smaller shareholders are very fair considering institutions paid $1.46 back in December when the share price was quite a bit less.
I agree with you, as far that the way capital raising is carried out and dividend is paid could well be the most pragmatic way of doing it.
But as far as that every share holder is treated the same as it should, this is definitely not the case.
And this not being the case were are the boundaries?
You are right ... a renounceable rights issue would have been much fairer. I think it as well appropriate to communicate this to the board. Feel free to send them a friendly message - or tell them next AGM. I am trying to get the NZSA interested to raise this with HBL ... and definitely intend to raise it at the next AGM (which is however still 9 months away ..).
I think all of this dates back a few years when the law was changed to allow fast track capital raising. The Restaurant Brands capital raising last year was also fast track. However in that instance the non tradable rights were issued pro-rata. While it was not possible to trade the rights, any rights not taken up were bundled up and sold by tender to the institutions. Any premium above the strike price was then passed back to the shareholders who had not taken up their rights, in proportion to their pre-rights shareholding. This seems to be a much fairer way to do things, and it was still fast track.
While the way Heartland did their capital raising was good for small shareholders, I reckon those of you with a medium size parcel that will see your shareholding diluted as a result of the coming capital raising have a genuine grievance with Heartland management.
SNOOPY
I have discussed HBL type of capital raising with directors of different companies in the past, and they would acknowledge the unfairness of a raise like HBL. There reosoning was usually as you said 'but it saves time'. I would have thought that in this case HBL and indeed most companies if they are organised have sufficient time to carry out a capital raising fair to all share holders.
Full year guidance looks pretty conservative to me.
The www.heartlandshareoffer.co.nz link is working but they ask for your holder number and your entitlement code. The letter containing the latter is I believe to be emailed/mailed out by Link and to date I don't believe the email has gone. I got the Tourism Holdings announcement through from Link via email today - all my comms are set to email for all my holdings - so it all seems to work but no email from HBL has appeared from the ether just yet.
email received 2:35pm today with CSN and Entitlement # to use.
Is there any benefit in subscribing now or should I wait until the 10th March? The way I see if I I sign up now they'll debit my account $15k sooner so I'll pay more interest on that. May as wait until the last possible moment.
I would wait, but do try and do it a couple of days before the deadline just in case something goes wrong and you need to sort it.
As for all the gripes, as Jeff might say:
"You can please all of the shareholders some of the time and some of the shareholders all of the time but you can not please all of the shareholders all of the time".
Personally I am torn between the
'do not buy more of any share which is already over your portfolio % limit'
and
'rules are meant to be broken'.
Best Wishes
Paper Tiger
My email came through at 2:48 pm yesterday and yes the www.heartlandshareoffer.co.nz link is now working. Time to raid the cookie jar. I have a very very small holding so as far as my shareholding being diluted it's little more than a rounding error in the overall scheme. Don't think it can be diluted any further ...
All the details came through and I'm now setup! Hopefully it ends up being at least 5K of shares after scaling, otherwise it's a bit pointless.
I am a happy long term holder and with on market additions, DRIP and its (more or less) steady SP growth, it's now one of my largest holdings. I will probably apply for less than $15,000 but not because it is a less worthy investment than some of my other (but more roller-coaster like) shareholdings. I will make my decision closer to the final date.
Only a small shareholder (8K SHARES) so with holdings to be diluted,how many would i be required to receive to maintain my %.
I presume it would be very few but i have no idea.
Well I got through straight away. saints be praised. Link didn't have me down to receive email for HBL just for my other holdings I'm not quite sure why but as a result they are sending the information out to me snail mail but that'll be fine as I won't be putting in my application until March anyway.
Thoughts on the SPP...
Current SP settling around $1.57 - $1.58 -- 8% higher than the $1.46 maximum SPP price.
I'm quite surprised at that premium -- I thought the SP might settle closer to the offer price, but instead has crept up over the last couple of days.
I assume that there will be a bit of a sell-off on the 15th as those that become over-committed during the SPP rebalance their holding (as I will be unless scaling is vicious); but even so it is looking promising that the SP will hold. With a maximum allocation of just over 10,000 shares there will be no single big-sellers -- and large holders wanting to unload would probably be using the current strength to unload now.
Remember that $20M as already been issued to institutional shareholders and this is the second $20M.
So we are going from 485M467 before 15-Dec to 512M864 after this is done and dusted.
On that basis you need 451.5 shares to maintain your %.
(That is one SPP share for every 17.72 shares you already own).
Best Wishes
Paper Tiger
Hi guys...if I sell my current holding, then apply to buy spp...am I still entitled? Thanks.
Nice interview on INTEREST.CO.NZ today with Laura Byrne CFO .
Hey guys, im planning on participating in this SPP. Quick question, does the standard cash management account that ASB offer with their sharetrading accounts allow a direct debit payment for SPPs? I cant say I've ever used it for anything but buying shares online.
Pages discussing the SPP but little comment on Heartland's actual result
Maybe that was Heartland's ploy - distract the punters attention so not too much attention paid to the detail.
Currently have a small holding (big for me) and don't have $15k sitting around. Don't want to sell other shares either. Seems like best option for me would be to sell my HBL shares and use the money for the offer. Dilution would mean I end up with less and would have to spend the amount I get back on something though.
I agree. These things are measured on a weighted average number of shares on issue that takes into account the timing of new share issuance.
I am confident on this correct approach earnings growth will be in the double digits per share.
Like you Percy, I am somewhat surprised they haven't made a tier 2 capital issuance. I would have thought with prevailing interest rates still being low there would be solid demand for a ~ $50m issue at ~ 6%.
Perhaps its important that Tier 1 capital ratio's are nice and robust first ? In any event I expect a Tier 2 issue at some stage which will be EPS accretive.
I think we are seeing it differently from HBL's point of view.
Where you and I see they should raise $60mil to $80 mil with Tier 2, to fund growth over the next year or two,HBL keep going on about having too much capital which they see as affecting their figures,so they prefer to raise the capital just before they need it.
I think we will just have to accept that is the way they are going to do it.
I think what worries me the most, winner69, about the answers to your questions apart from the euphoric & glib nature of them (the answers that is, not the questions) is that very few of us actually appear to be thinking.
Obviously I am personally 'well miffed' that it apparently has not occurred to the likes of Roger and percy that I, the Paper Tiger, had taken the diluted nature of EPS results into account already.
Perhaps $1.46 whilst a discount to the current market price is not actually a discount to fair value!
Best Wishes
Paper Tiger
*alternative title: Move over Snoopy, I can take it from here.
We won't get a $15k allocation, though. We have only the right to apply for $15k worth of new shares and to give them an interest free loan for this amount. We might get (if we are really lucky and half of us don't bother) less than 1/3rd of the applied for number of shares. If everybody applies for the full sum it would be roughly $2k worth of shares (and $13k returned) for everybody. I intend to apply for the full sum, but realistically will consider myself as lucky if I get $5k worth of shares out of this exercise.
I would have preferred a renounceable rights issue for the full CR including institutions (i.e. $40m) ...
I agree (I think we saying same thing with tiger talk and bee,s buzzing lingo)
While doing EPS on weighted number of shares is the way its done isn't it ironic that the dividend pool is shared out on actual (or to be post SPP) number of shares - hence no increase in dividend ....hmm
Can I ask someone far more knowledgeable than I, Why does't HBL do an SPP at say $6,000/shareholder foregetting the largest institutions,Because they have already participated.
Lets say 7,000 are given the opportunity to apply for $6,000 worth of shares,thats $42M.
This would then alleviate the need for a tier 2 issue in Aus. Or is it that they are only doing that partly to increase their exposure over there,and hence their credibility?
If they can use the capital,why not have a wee bit too much now,to be used later,it's not costing them,apart from maybe return on equity short term?
This may sound dumb to some,but just out of interest.
Like the Virgin Air say "balance sheet optimistaton' is key
Is that true too for the ordinary shares that will be issued under the SPP? Are NZ ordinary share as expensive a source of capital as American common stock, taking into account comparative yield expectations as well as compliance and capital raising costs?
Would someone please be so kind as to update me on that the current discount to VWAP HBL are offering under their scheme, if any ?
Thanks guys....it's been a long day working the steam powered abacus and couldn't be bothered looking it up.
Might as well sign up for that as well as the SPP...no brainer applying for the full $15K worth of SPP in my opinion.
Pretty sure they take the whole application money and then refund after scaling right? I might only be able to scrap together 5k for my application :(
Thanks for the replies guys. I do have some money in a Rabosaver account earning very little interest so I better raid that after month end and apply for whatever I can afford.
Just because you can buy some shares cheaper tomorrow than what you can buy them for on the market today doesn't make it a 'no brainer' in my books. There might be reason to apply for shares under the plan, a syou can build up a small holding without incurring brokerage. By raiding the mattress and the flower pot in the garage? Surely this is only a great idea if you are sure that the discounted hsares you will get are good value. With fair value at $1.42, I think this is far from clear.
SNOOPY
I am buying mainly for the dividend and the potential upside in SP. Over 5% for HBL vs 2.75% on my Rabosaver. Lets just hope my car will get its WOF next month.
Don't forget the HBL divvies are fully imputed so gross yield if they pay 8.5 cps in total this year is (8.5 / 159) /0.72 = 7.4%. (You can boot that 7.4% to 7.6% effective by taking shares in lieu of dividend at the 2.5% discount (7.4 / .975) At 8 cents annual divvy the gross yield is still circa 7%....plus earnings growth should translate to further SP growth. Looks like a pretty reasonable investment proposition to me.
"On the road to no where" [thank you Talking Heads]
If we look at the share price performance over the past few years it is easy to see which share Talking Heads were singing about.
Share price increase.....................1 year.............2 years...............5 years.
SKL.........................................16.67% .............12.41%................6.91%
HBL..........................................38.60 %...........17.91%.................267.44%.
I see no reason why HBL can not out perform SKL by the same margin over the next 5 years.
So 2022.......... sp.SKL$1.63........................HBL............ ..$4.25.
Today..................SKL $1.53.......................HBL..............$1.59 .
So taking part in HBL's SPP will be well worth while.!