Sharechat Logo

Heartland full year profit $7.1m

Friday 19th August 2011 2 Comments

Text too small?

Heartland New Zealand, which aims to become a bank, reported full year net profit of $7.1 million and one-off costs of $6.8 million.

Among the one-off costs were expenses for the merger between Marac, CBS Canterbury and Southern Cross Building Society to form Heartland, which was completed in January, and costs for the listing of Heartland on the NZX.

Net operating income for the period to June 30 was $70.6m, with consumer business the major driver. The operating environment was challenging which saw net receivables down marginally, Heartland said.

Business and rural divisions were in varying stages of development and were anticipated to have a greater contribution in future.

Past due and impaired assets remained at elevated levels due to non-core legacy property development loan assets, which management was continuing to manage down, Heartland said.

The impaired assets charge for the year of $13.3m was 0.95 percent of average net finance receivables, a considerable improvement over the combined positions of the three merged entities' impaired asset charges during the past two years, which were about $30m a year.

Retail funding was the mainstay of Heartland's funding base, with the retail deposit book stable at $1.6b, and reinvestment rates averaging 77 percent since the merger, the company said.

More than half Heartland's investors had voluntarily moved to non-guaranteed deposits or term deposits with maturities beyond the expiry of the Crown guarantee at the end of 2011 -- including 95 percent of new funds and 79 percent of reinvestments.

"The quality of the retail deposit base has progressively improved with the purging of hot money or guarantee chasers, and is now significantly more loyal and stable," Heartland said.

"This purging will continue but growth in new depositors bodes well for the future."

Heartland said its intention was to be a regular dividend payer no later than in the financial year starting July 2012, provided profit targets and regulatory capital requirements were met.

Previously it announced a profit forecast of between $20m and $24m for the 2012 financial year, and intended to update that after the end of the September quarter.

  General Finance Advertising    

Comments from our readers

On 20 August 2011 at 9:30 am s2d said:
As a Heartland shareholder I am wondering about the advisability of buying more shares under the present Share Purchase Plan. Yes or no ??? Thanks.
On 24 August 2011 at 9:24 pm mark said:
As For buying More Shares!Why would you Want to pay Again!!! for Something PGC Sold Part of 8 Months ago!!! This is A Clear Case OfPeterpaysPaul! Paul Repays Peter!
Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland to buy ‘home equity release’ business for $87M, to raise $20M from shareholders
Heartland FY profit slides 71 percent to $6.9 mln on charges to take distressed assets in-house
Heartland heads off low-ball offers with plan to pick up brokerage on small share parcels
Heartland shares rise to 2-year high, debt rating affirmed after taking control of bad loans
Heartland cuts 2013 earnings guidance, taking distressed assets in-house, sees growth in 2014
Heartland NZ lifts 1H profit by 9.2 percent on improved retail, business and rural earnings
Heartland gets approval for bank licence
Heartland sees flat profit in 2013, announces special dividend
Heartland investment grade credit rating affirmed, shares gain
Heartland will focus on high-margin business