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Highlights
- Heartland expects NPAT guidance to remain in the same range as advised earlier
- It expects NPAT to be between NZ$109 million to NZ$114 million in FY23
- In FY22, it clocked an NPAT of NZ$95.1 million
Heartland Group Holdings Limited (NZX:HGH, ASX: HGH), New Zealand’s financial services group, said on Thursday (13 October 2022) that it expected its NPAT guidance to remain the same as advised on 23 August 2022.
As per the update, the company said that it expected the net profit after tax to be in the range of NZ$109 million to NZ$114 million, excluding any impact of fair value changes on equity investments held, and excluding the impact of the de-designation of derivatives.
FY22 financials
The company said its NPAT was NZ$95.1 million for the FY22 ended 30 June. This signifies an increase of 9.3% over the previous comparable period (pcp). The company said the increase came on the back of a substantial increase in older homeowners taking out reverse mortgages to cope with the rising cost of living.
Other financials also showed an uptick with gross receivables at NZ$6.2 billion, up 15.3%, and a return on equity (ROE), up 21 bps.
HGH’s net interest income was NZ$250.1 million, up 7.1%.
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Further, in an investor presentation, the bank said that as the cost of living continued to rise and indebtedness in retirement increased, the reverse mortgage was getting greater acceptance and saw increased demand. Reverse mortgages are loans made to older homeowners and secured against their home equity.
Equity raise
The company also declared that it would raise a NZ$200 million equity via a NZ$130 million fully underwritten placement and a NZ$70 million non-underwritten share purchase plan for the shareholders. HGH expects to repay the AU$158 million for the acquisition of StockCo Holdings of Australia and to fuel the growth of its existing businesses in Australia and New Zealand.
Dividend
HGH declared a final dividend of 5.5 cps for FY22. This takes the total dividend to 11.0 cps (flat on 2021). This represents a full-year payout ratio of 68%. The final dividend will be paid on 14 September 2022 and the record date is 26 August 2022.
Road ahead
According to the company, the current economic environment presents several challenges. However, HGH is resilient to these challenges due to solid growth in reverse mortgages, the company further said. HGH will also gain a market share in Motor and Asset Finance. Also, HGH will focus on rural areas that remain underserviced.