S&P puts Heartland on negative outlook
Wants an increase in earnings and "managing down" of exposure to property development book.
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Ratings agency Standard & Poor’s has reaffirmed the Heartland Building Society’s credit rating of BBB- but has changed its outlook from stable to negative.
Heartland (NZX:HNZ) says the affirmation of the rating provides it with certainty to proceed with its application for bank registration, and also the proposed acquisition of PGG Wrightson Finance as scheduled.
Standard & Poor’s says a change in outlook will depend upon an improvement in Heartland’s earnings and in Heartland managing down its exposure to the legacy property development book.
Heartland says these are areas of current management focus, with earnings forecast to improve next year and strategies in place to accelerate the exit of exposures to property development.
"Furthermore, the performance of loans in Heartland’s core activities remains strong."
Heartland will announce its annual result for the year ended 30 June 2011 on Friday 19 August 2011.
Net profit after tax is expected to be consistent with current market guidance ranging between $6 million to $8 million.
The forecast NPAT 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.
Niko Kloeten
Fri, 12 Aug 2011
Fri, 12 Aug 2011
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S&P puts Heartland on negative outlook
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