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Heartland New Zealand set to bank sound inaugural profit

Heartland New Zealand – seeking a banking license for the Heartland Bank – expects to reveal a net profit of between $6 million and $8 million when it open the books on August 19.

The annual result, for the year to June 30, will include hefty one-off costs associated with the recent merger of former Pyne Gould Corporation (PGC) subsidiary Marac Finance and two buildings societies. It will also be weighed down by investment to meet bank standards as it seeks to become a registered bank.

Forecast net profit for the combined business following the intended acquisition of PGG Wrightson Finance, in the 2012 financial year, is expected to be in the range of $20m to $24m.

Heartland is now among the country’s top 50 listed companies.

Shareholders recently received details of its $35 million fully underwritten share purchase plan – key to funding its purchase of PGG Wrightson Finance. It is raising $58 million of capital in order to maintain acceptable levels of capitalisation after the proposed acquisition of PGG Wrightson – a move that will extend its reach into the rural sector.

The capital raising is a combination of private placements, which have been fully committed to by institutional and strategic investors, and the offer to Heartland shareholders under the fully underwritten share purchase plan (SPP).

Shares in Heartland New Zealand last traded at 62 cents.

More by Georgina Bond

Comments and questions
4

sounds like great creative accounting....

whilst the shareholders are led to the slaughter by Kerr and his Marac mates...
Heartland will end in financial tears, it's foundation was always flawed especially in it's core value set...

It's shaky foundations are built in part upon the dodgy Marac book...

Probably this is why the heartland shares have plumetted HUGELY from their issue price down to 62c today...

Perhaps the game is up George?
A few too many people privvy to the game play perhaps?

Wonder when heartland will announce that they have bought SCF's 'good book'?

It's just a matter of time...

Whilst I welcome fresh competition into the market I have to report that they are producing more of the same. Rather than be different and really try to WOW their clients it seems they are pen pushing the same adverse credit decisions and little client service as the others.
Welcome to the club Heartland you fit right in.

does SCF really have a good book...

Most likely it has already been partially demolished by the receivers unneccessarily selling down good loans at discounted amounts... at taxpayers expense whilst laying the blame on Hubbard for the losses...