Thanks SCOTTY,it is always good to here from a fellow investor who went to the meeting.
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Thanks SCOTTY,it is always good to here from a fellow investor who went to the meeting.
Quote:
Originally Posted by Lizard;357226 19-Sep-11
Kiwibank could get asset sale cash - Key (Stuff)Quote:
Originally Posted by Lizard;357271 20-Sep-11
Reminder to self once again - "whenever you find yourself making a comparison with another business to justify a valuation, you are usually just proving that the other business is over-valued."
Interesting profit forecast - slight downgrade at $20-$22m NPAT, but sounds like the $6m deferred tax benefit is included in the forecast? Good to hear impairments are lower than forecast and higher than anticipated level of referrals from PGW.
Price has been plateauing here, so if there is any hint of volume building on the buy side, I would be interested in adding to my initial position. Although, while we all sit around the campfire, waiting to see if we get struck by fall-out from the sovereign debt meteorite or pass through the tail of another banking crisis comet, it seems prudent to watch a little longer...
Keep holding yourself at the ready lizard. !!!!!!
I thought the $6 mil would have been on top,so when I saw the announcement I thought it would be a profit upgrade,not a profit downgrade.!!!The impairments being down I take that they are taking few risks.Certainly trying to be a bank rather than a finance company.Maybe too careful,not wanting to miss out on bank licence. Hopefully laying good foundations for the future.Sitting on so much cash and liquidity does not earn profits,so once over Govt guarantee that cash /liquidity should be put to use.Still they are doing everything very carefully,moving forward as to plan,so shareholders will rewarded by having a very run company they can pride of ownership in.
Perc.
Was wondering whether to respond to lizards as I feel much the same.. So much happening global.. Have a few shillings ready to spend but feeling very wary..
To increase or not to increase.. That is the question..
Must admit that I think that the company is on the right track..
BUT... with all the shenanigans going on at PGC who have a finger in the HNZ pie..
Are they masters of their own destiny ??
I agree with you and Lizard,with so much happening global.Time to be very careful.Take your time deciding.
I am sure the shenanigans at PGC are very much at PGC.All the problem bits are at PGC.
As for PGC and GK influence at HNZ I am sure both Chairman Irvine and MD Greenslade will tell them to "clear off." They will not risk the bank licence.
GK and PGC will know that Irvine and Greenslade will add value to HNZ.HNZ is on the right track.Has not been the best of times to undertake creating a new bank,but they have done the hard yards.
So guys - excluding the deferred tax benefit is the forecast NPAT $14m-$16m as per Lizards question mark or is $26m-$28m as per Percy's thoughts
Downgrade or upgrade or just confusing
But then again if the $6m was included in the original guidance then it is about the satus quo and just a strom in a teacup
No, looks like you are right on that, Percy. From the Annual Report:
While yesterday's update certainly reads as though it IS included in the forecast (and to be booked in first half as part of the $9-$10m first half NPAT, thereby making underlying first half only $3-$4m).Quote:
We have set a profit target of $20m–$24m for the 2011–2012 financial year. Achieving that forecast will be dependent on our ability to meet our performance milestones and anticipate and quickly adapt to any major market events, needs and opportunities. By virtue of a law change, a one-off deferred tax benefit will be booked as an additional credit to NPAT for the 2011-2012 financial year. The amount of this credit is likely to be in the order of $5m to $6m. This credit will have a positive impact on the forecast.
On the positive side, I think this forecast is inclusive of their current view on likely impairments, which would mean equity should at least be heading upwards rather than eroding....Quote:
The impact on earnings has been offset by the previously announced one-off deferred tax benefit of $6m, and lower than expected operating costs and impairment expense to 31 October.
When the $20 - 24mil projection was made , there were 300m shares on issue. Since then PWF was purchased and another 88.7m shares issued. Now the profit forcast is reduced to $20 - 22m. On a projected earnings per share basis there is a definate drop in earnings!! This is with or without the tax credit which I don't think was included in the original projection.
On the other hand, you have to bear in mind that at 49cps, the market looks to be pricing in either further substantial losses or additional dilution in the future, given that NTA is around 85cps (sorry, can't find exact figure). The deferred tax credit still adds 1.5cps to NTA. Forecast of even $4m NPAT for half year will still add another cent, presuming they don't pay a dividend.
By the nature of finance capital, isn't it likely that an equilibrium has to be eventually reached in the world of finance where returns on equity at least match one year interest rates (and most likely carry a risk premium to it)? For that to happen, either we see profits at a level that the gap on NTA will also close (giving the double whammy to the share price) or we have to see losses and a reduction in NTA. While they post profits, no matter how small, then I am thinking the first scenario seems realistic (over, say, 3 years).
So we agree it is a pretty hefty profit downgrade then?
Meaning what? All is still on track but real success for this very well run business is just that bit further away
Market probably like it though .... don't hold on too much longer Lizard
Bit ominious -- decliners list (1st half hour) led by ALF PPL and HNZ .... rest of table in green as the worlds problems have all been fixed again
What elite company HNZ is in ........ but then they say one swallow doesn't make a summer or something like that
Phew ... relief all round I suppose ..... out of the red
Objective achieved .... press only reporting HNZ profit being 'pruned' from $24m to $20m-$22m .... pretty good result seeing how tough the business world is these days .... well done
Like the head finance man admitting that becoming a bank was only a marketing ploy suppose even financial updates are sort of marketing as well
[.... don't hold on too much longer Lizard[/QUOTE]
winner69.What do you mean.?Do you mean Lizard should sell? or do you mean lizard should buy.
Be careful other wise Lizard will think you still have "Bi-trendual tendencies."
I checked with Heartland today. They confirm that the forecast does include the one-off deferred tax benefit.
I was pretty disappointed with the way they handled that. I'm pretty nervous of any company that isn't straight-up in their announcements and reporting, and that one was a little on the borderline.... up until now, they've been pretty straight-up (with only a slight polish to the PWF acquisition outcomes).
Now I can understand, that given the fragile nature of a finance business at the moment, there would have to be a degree of caution - they probably couldn't risk the media jumping on the "downgrade" story too dramatically, especially given their business is now increasingly distanced from broker support and the associated "selling". We should all know by now how much of a "confidence" story finance is! (And the loss of broker support is more about incentives related to commission and regulation, than about sentiment).
But still counts as a strike.
"Three strikes and you're out" remains a good policy. (After that, "two years and a change of management" is the general rule before there's another chance...)