Monday 22nd February 2021
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Heartland Group Holdings Limited achieved a net profit after tax (NPAT) of $44.1 million for the six-month period ended 31 December 2020 (1H2021), an increase of $4.2 million (10.6%) compared with the six-month period ended 31 December 2019 (1H2020). On an underlying basis (which excludes the impacts of one-offs), 1H2021 NPAT was $43.2 million, an increase of $5.1 million (13.4%) compared with 1H2020 underlying NPAT.
Heartland is pleased to declare a 1H2021 interim dividend of 4.0 cps (0.5 cps down on 1H2020). The dividend yield of 4.8% compares with 8.3% in 1H2020. As was the case for the 2H2020 final dividend, the dividend decrease reflects restrictions imposed by the RBNZ on distributions by banks in New Zealand. However, the continued growth in Heartland’s Australian operations enable it to distribute earnings derived from assets held outside of Heartland Bank. Heartland expects to return to a pay-out ratio aligning to historical levels once the RBNZ restrictions are removed. The interim dividend will be paid on Tuesday 16 March 2021 (Payment Date) to shareholders on the company’s register as at 5.00pm on Tuesday 2 March 2021 (Record Date) and will be fully imputed.
Heartland has a Dividend Reinvestment Plan (DRP), giving eligible shareholders the opportunity to reinvest some or all of their dividend payments into new ordinary shares. The DRP will apply to the final dividend with a 2.0% discount.
Heartland’s 1H2021 NPAT has exceeded expectations, particularly due to a much lower than forecast impaired asset expense and pleasing origination levels in core portfolios. However, aggregate balance sheet growth has been modest (primarily due to elevated repayments) and this may moderate the uplift in net operating income ordinarily experienced in the second half of the financial year.
Heartland believes customer repayment activity will normalise, and impaired asset expense levels will be in line with budget for the remainder of the financial year. Provided this occurs and the economic conditions continue to improve, Heartland expects NPAT for FY2021 to be at the upper end of the guidance range of $83 million to $85 million.
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