Heartland meets guidance with rebound in full year profit, sees lift in 2015

Heartland New Zealand Managing Director Jeff Greenslade
Heartland New Zealand 12-month price history (NZX.com)

Heartland New Zealand [NZX: HNZ], the bank formed from the merger of Canterbury and Southern Cross building societies and Marac Finance, posted a rebound in profit that met its guidance this month and reiterated its projection for earnings growth in 2015.

Profit was $36 million in the 12 months ended June 30, from $6.9 million a year earlier, when the company took a charge to take control of distressed assets previously managed by Pyne Gould Corp. Sales rose 14 percent to $122.6 million.

Heartland has been chasing acquisitions to help grow earnings, buying a reverse mortgage business from Seniors Money International for $87 million and being turned down in its approach to Motor Trade Finances last month, which would have added a loan book of some $438 million.

The lender lifted the top-end of its forecast range for 2015 profit and now expects earnings of between $42 million to $45 million, up from a previous range of $42 million to $44 million.

"For the next financial year, Heartland is focused on continuing the earnings momentum achieved in 2014, with a specific focus on improving ROE (return on equity)," the company said.

The company will pay a final dividend of 3.5 cents a share, making 6 cents for the year, full-imputed.

The company paid $86.1 million for the Seniors home equity release business, gaining assets acquired and liabilities assumed of about $721.4 million and NZ$652.8 million respectively, and net tangible assets of $68.6 million. Heartland said it made a fair value adjustment of $7.5 million on the portfolio, giving the acquired business an NTA of about $61.2 million.

Net operating income from the company's household division rose 32 percent to $15.8 million, while income from its rural business was unchanged at $22.9 million. Its business lending division lifted income by 15 percent to $3.8 million.

The shares were unchanged at 95 cents and have gained 12 percent this year.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6675 -0.0008 -0.12%
AUD 0.9406 -0.0003 -0.03%
EUR 0.5910 -0.0014 -0.24%
GBP 0.4593 -0.0009 -0.20%
HKD 5.1991 -0.0086 -0.17%
JPY 74.9720 -0.7140 -0.94%

Commods

Commodity Price Change Time
Gold Index 1194.6 -4.000 2016-02-10T00:
Oil Brent 31.5 0.520 2016-02-10T00:
Oil Nymex 27.5 -0.430 2016-02-10T00:
Silver Index 15.3 -0.170 2016-02-10T00:

Indices

Symbol Open High Last %
NZX 50 6019.5 6028.7 6019.5 -0.54%
NASDAQ 4318.3 4369.6 4268.8 0.35%
DAX 8887.9 8899.6 9017.3 -2.97%
DJI 16035.6 16201.9 16014.4 -0.62%
FTSE 5672.3 5672.3 5672.3 -2.60%
HKSE 18486.9 18627.5 19288.2 -3.85%
NI225 16127.9 16163.0 16085.4 -2.31%