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Heartland announces FY20 full year results

Thursday 17th September 2020

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Heartland announces full year net profit after tax of $72.0 million (or $78.9 million adjusted to remove economic overlay for COVID-19)

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) achieved a net profit after tax (NPAT) of $72.0 million for the financial year ended 30 June 2020 (FY2020). Included within this NPAT is an economic overlay of $9.6 million pre-tax which Heartland applied to its potential credit losses in response to the ongoing uncertainties relating to the COVID-19 pandemic. The adjusted NPAT (which excludes this economic overlay) is $78.9 million.

Highlights for FY2020

• NPAT of $72.0 million.

• Adjusted NPAT of $78.9 million (removing the economic overlay of $9.6 million pre-tax), up 7.2% ($5.3 million).

• Gross finance receivables (Receivables) of $4.6 billion, up 4.9% ($215.0 million).

• Return on equity (ROE) of 11.4%, up 31 basis points (bps).

• Net interest margin (NIM) of 4.33%, flat on FY2019.

• Net operating income (NOI) of $235.3 million, up 13.2%.

• Cost to income ratio (CTI) of 45.4%, up 3.8 percentage points (pp). After allowing for changes in the accounting treatment and one-off impacts, the underlying CTI is 44.5%, up 4.6 pp as a result of significant investments in areas of strategic importance.

• FY2020 final dividend of 2.5 cents per share (cps), taking FY2020 total dividend to 7.0 cps – a decrease of 3.0 cps (as a consequence of restrictions imposed by the Reserve Bank of New Zealand (RBNZ) on distributions by banks in New Zealand).

• A dividend yield of 8.2% (8.6% in FY2019).

• Earnings per share (EPS) of 13.7 cps, up 5.2%.

• Heartland has transitioned through a number of strategic phases to establish itself as a digitally-led financial services group, ‘a financial technology company (fintech) with a bank licence’.

• In May 2020, Fitch Ratings (Fitch) affirmed Heartland’s Long-Term Issuer Default Ratings and Outlooks. Heartland Bank Limited (Heartland Bank) was one of only two Australasian banks to have no reduction or adverse change to its rating or outlook as it entered the economic downturn.

• Established new products to support customers affected by COVID-19.

• Digital tools such as electronic document signing and biometric facial recognition enabled motor vehicle dealers to continue to offer Heartland’s motor vehicle finance despite alert level restrictions on in-person interactions.

• Heartland Bank awarded Canstar’s 2020 Bank of the Year – Savings and Canstar’s 5-Star Rating for Outstanding Value Savings Account for its Direct Call and YouChoose accounts.

• Heartland Bank Reverse Mortgages awarded Consumer Trusted accreditation for the fourth year in a row.

• Heartland Bank a finalist in the Diversity Works NZ Diversity Awards in the Cultural Celebration category.

• Heartland Bank became an accredited Living Wage employer, and part of the first Living Wage accredited industry in New Zealand.

See the links below for more details:

Heartland Release FY20 Results

Heartland Investor Presentation

Heartland Group Holdings Financial Statements

Heartland Bank Disclosure Statement

Source: Heartland Group Holdings Limited

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