Archive | Heartland

Heartland Bank completes equity-raising

Heartland Bank Ltd completed a $20 million placement yesterday at $1.46/share.

Chief executive Jeff Greenslade said it was well supported by Australian & New Zealand investors and introduced a number of new investors to the register.

Settlement & allotment of the new shares is expected to occur tomorrow.

Heartland also intends to make a discounted offer to existing New Zealand shareholders of up to $10 million through a share purchase plan, offering them up to $15,000 of shares/each. Mr Greenslade said the final terms of that offer should be announced in more detail in early 2017.

Attribution: Company release.

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Propbd on Q M21Dec15 – Heartland Bank, Oji resyndication, Seeka, Goodman settles, Caltex decision deferred

Heartland NZ to become Heartland Bank
Oji premises development & resyndication approved
Seeka changes mind on new head office site
Goodman settles Glassworks sales
Commission extends time to decide on Z’s Caltex buy

Heartland NZ to become Heartland Bank

Heartland NZ Ltd will change its name to Heartland Bank Ltd with effect from market open on Thursday 31 December, and its ticker code will change to HBL.

Oji premises development & resyndication approved

Augusta Capital Ltd said on Friday both conditions for development at Oji Fibre Solutions (NZ) Ltd’s Penrose premises had been satisfied and a new syndicate would be established by 31 March.

Augusta managing director Mark Francis said on 27 November the company had entered into a development & lease variation agreement with Oji (ex-Carter Holt Harvey Pulp & Paper Ltd) and the existing Augusta managed syndicate that owns the Penrose premises at 33-43 Hugo Johnston Drive.

The agreement was conditional on the approval of Oji’s board and of the investors in the existing syndicate which owns the property. To fund the landlord’s development works contribution, Augusta’s syndicate manager, Augusta Funds Management Ltd, proposes to re-syndicate the property to raise about $16.5 million of equity.  In addition, Augusta Capital entered into the agreement as guarantor of the existing syndicate’s obligations, which included the landlord’s contribution to the development works, capped at $9 million, and a lease incentive payment. The new syndicate will take over liability for the development.

Earlier story, 27 November 2015: Augusta proposes re-syndication to expand Oji premises

Seeka changes mind on new head office site

Seeka Kiwifruit Industries Ltd has acquired a new head office site in Te Puke, 26km down state highway 2 from Tauranga, one of several property transactions it announced on Friday.
Seeka has confirmed the $4.2 million purchase of a 7.44ha property currently leased by Te Puke kiwifruit tour operator Kiwi360 and an adjacent 5.44ha kiwifruit orchard. The purchase is to be completed on 20 January. The larger property is leased to Green Circle Ltd, the Kiwi360 business operator, which will stay on site until 20 April.
The orchard is directly across the road from Seeka’s Transpack packhouse in Young Rd, Maketu corner, and is adjacent to its Transcool coolstore & KKP packhouse.

Seeka has also reached an unconditional agreement to sell its New World building in Te Puke, across the road from its current head office. The company had intended to relocate its head office to the New World building, but has sold it at its 2014 purchase price of $1.2 million, settling in February.

Chief executive Michael Franks said Seeka had also sublet 2 vacant properties in Totara St, Mt Maunganui, adjacent to its Huka Pack sites, which were on long-term leases as part of Seeka’s purchase of Huka Pack in 2010 from Te Awanui Huka Pack. From 2016, they have been subleased for 14 years to an independent third party. Mr Franks said the annual sublease value would fully offset Seeka’s head lease cost.

While not having an immediate impact on earnings, Seeka believes the purchase of the 2 properties at Maketu would position the company for expansion in that area.

Goodman settles Glassworks sales

Goodman Property Trust manager Goodman (NZ) Ltd confirmed last week that the sale of the Junction units, Move Logistics & DHL facilities at the Glassworks Industry Park in Christchurch for $38.9 million, had settled.

Earlier story, Propbd on Q M7Dec15 – Pacific Property expansion plan, Glassworks sale, RMA bill

Commission extends time to decide on Z’s Caltex buy

The Commerce Commission has extended the time for it to decide on Z Energy Ltd’s application to acquire Caltex brand owner Chevron NZ Ltd to 29 April 2016. Z registered its application on 1 July.

The commission said last Thursday: “We are still continuing to assess the competition effects of the proposed merger in a number of markets, including the retail supply of petrol & diesel, storage terminals, aviation fuel, bitumen and the supply of diesel to customers who purchase it in bulk or through truck stops.”

Earlier stories:
22 November 2015: OIO approves Z Energy takeover of Caltex
3 June 2015:
Z Energy buys Caltex

Attribution: Company & commission releases.

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Corrected: Propbd on Q Th30July15 – 4 units sell at Ray White auction, CDL slips, Heartland on track

4 apartments sell at Ray White’s
CDL Investments makes modest gain
Heartland expects profit at top of guidance range

Corrected 31 July:
CDL Investments NZ Ltd’s after-tax result fell 3.6%. I wrote yesterday that it rose by 3.6%. The actual profit figures are unchanged.

2.07pm:
4 apartments sell at Ray White’s

4 of the 5 cbd apartments taken to auction at Ray White City Apartments today were sold under the hammer. Auction results:

The Crescent, 36 Eden Crescent, unit 101, sold for $370,000, sales agents Mitch Agnew & Krister Samuel
Aura, 53 Cook St, unit 1102, passed in at $351,000, Daniel Horrobin & Damian Piggin
Altitude, 34 Kingston St, unit 8H, sold for $316,000, Leo Zhu
Fiore, 152 Hobson St, unit 602, sold for $409,000, Aileen Wu
The Quadrant, 10 Waterloo Quadrant, unit 1318, sold for $280,000, May Ma & Mark Li

Corrected: CDL Investments slips

Correction: I wrote yesterday that CDL made a modest gain of 3.6%, when its after-tax result was down 3.6%.

CDL Investments NZ Ltd’s after-tax operating profit fell by 3.6% in the first half to $8.2 million ($8.5 million last year), on pretax profit up 2.6% to $11.7 million ($11.4 million) and revenue down 4.1% to $23.9 million ($24.9 million).

The company sold 128 sections in the latest period, down from 133 this time last year.

Net asset backing increased by 7.4% to 47.6c/share (44.3c).

Chairman Wong Hong Ren said the listed land developer expected to start sales at its Prestons Rd subdivision outside Christchurch by the end of the year. The company has started earthworks on its 100-lot Kewa Rd subdivision, off Lonely Track Rd beside the Northern Motorway at Albany Heights.

Heartland expects profit at top of guidance range

Heartland NZ Ltd said today it expects net profit after tax for the June year to be about $48 million, at the upper end of the guidance range of $46-48 million.

The company intends to announce its annual result on Tuesday 18 August.

Chief executive Jeff Greenslade also said today that, given heightened market interest in the dairy sector, the banking company’s exposure to dairy was 7.6% of its total lending book: “The average loan:value ratio (LVR) for Heartland’s dairy exposures is 61%. However, it is important to note that LVRs are only one of the indicators of loan quality.

“Where Heartland’s dairy clients are experiencing financial stress as a result of lower dairy payout forecasts, we are actively working with them to fund working capital shortfalls where appropriate and ensuring they have access to appropriate support, including emotional support through the Rural Support Trust & Farmstrong.”

Heartland’s preliminary forecast range for net profit after tax in 2015-16 is $51-55 million, including an allowance for estimated impairments.

Attribution: Auction, company releases.

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Heartland buys 10% of HarMoney

Heartland NZ Ltd has taken a 10% shareholding in New Zealand’s only licensed peer-to-peer lending platform, HarMoney Corp Ltd.

Heartland chief executive Jeff Greenslade said on Monday its subsidiary, Heartland Bank Ltd, would also provide a funding line to enable lending to a range of individual borrowers using the platform.

“Heartland’s strategy is to occupy leading positions in niche markets through specialist offerings which are different to traditional banks. Likewise, HarMoney operates a lending model that challenges those being offered by mainstream banks – a model that can change the way people borrow & invest.”

Earlier story:
8 July 2014: Roberts’ HarMoney gets first peer-to-peer licence

Attribution: Company release.

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Heartland lifts return on equity

Heartland NZ Ltd said yesterday it expected net profit after tax for the June year to be about $36 million, at the upper end of the $34-37 million range previously advised.

The NZX-listed bank company will announce its full-year results on Monday 25 August.

The 2014 result will be a $29 million (421%) improvement on last year. Chief executive Jeff Greenslade said the difference was partly due to the one-off charges made last year, but also resulted from the growth of operating income and continued management of operating expenses & impairment levels.

The recently acquired New Zealand & Australian home equity release mortgage businesses of Seniors Money International Ltd contributed about $1 million, net of acquisition costs.

The indicative earnings for 2014 equated to a return on average equity of about 9.0% for the full year, but Mr Greenslade said the bank had improved its performance during the year to achieve a 9.7% return in the last quarter.

Last year it had a 2% return, and in 2012 a 6.5% adjusted return, calculated by excluding the one-off expenses of $24.3 million pretax incurred as a result of the change in strategy on the non-core legacy property asset portfolio.

Attribution: Company release.

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Heartland says non-core property selldown speeds up

Heartland NZ Ltd said today its selldown of non-core property assets had progressed ahead of expectations this year.

Managing director Jeff Greenslade said: “Non-core property assets have reduced by 51% from $87.1 million to $43 million in the 5 months ended 31 May. Heartland had previously forecast non-core property assets to be $57.9 million as at 30 June.”

The breakdown at 31 May was net receivables of $16.9 million (22 receivables with an average balance of about $800,000) and investment properties of $26.1 million (13 properties with an average balance of about $2 million). Mr Greenslade said Heartland retained $9.7 million of provisions against these assets and didn’t expect earnings to be affected by them.

He said marketing campaigns in New Zealand & Australia should arrest the 2-year decline of the reverse-mortgage loan book Heartland bought from Seniors Money International Ltd, completed on 1 April.

Mr Greenslade said the loan book of Seniors’ New Zealand & Australian Home Equity Release mortgage businesses historically repaid at around 10%/year, but had been declining since 2012.

“To date, Heartland has integrated the businesses and is conducting a marketing campaign in New Zealand for the HER product, including TV advertising that started in May. This has produced higher numbers in the sales pipeline than anticipated. The New Zealand book is expected to turn around and grow in July or August 2014, ahead of expectations.

“In Australia, where sales are largely through distribution partners, 47 salespeople have been accredited across 4 key partners. A TV campaign will be launched in Australia, starting in July. Growth expectations remain on track.”

Earlier story:
14 April 2014: Seniors deal gives Sentinel founders & Quadrant stake in Heartland

Attribution: Company release.

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S&P lifts Heartland rating

Heartland NZ Ltd said yesterday Standard & Poor’s had raised its long-term issuer credit rating on its Heartland Bank Ltd subsidiary from BBB- to BBB and assigned a negative outlook.

Managing director Jeff Greenslade said the rating upgrade reflected S&P’s view that:

  • Heartland’s business position strengthened over the last 3 years upon the bank’s transition toward its core niche markets – such as vehicle asset finance, invoice financing, livestock financing & reverse mortgage loans – and away from non-core assets
  • contestability in these typically higher-risk specialist markets is lower than in traditional commoditised markets such as residential mortgage loans
  • Heartland has made progress in exiting its non-core property portfolio and reducing its residential mortgage lending portfolio.

The negative outlook reflected the negative economic risk trend assigned to the New Zealand banking system and S&P’s concerns around economic imbalances, which weren’t specific to Heartland.

Link: S&P report

Attribution: Company release.

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Seniors deal gives Sentinel founders & Quadrant stake in Heartland

Seniors Money International Ltd (ex-Sentinel Ltd) has acquired a 9.3% stake in NZX-listed banker Heartland NZ Ltd as part of the $87 million price for selling its New Zealand & Australian reverse mortgage businesses to the bank.

The 43 million shares, priced at 90c, represent $38.7 million of Heartland’s purchase price.

Heartland conditionally agreed in February to buy Seniors Money International’s New Zealand & Australian home equity release (reverse mortgage) mortgage businesses. Settlement was on 1 April.

NZX disclosures at the end of last week show Heartland acquired New Sentinel Ltd & Australian Seniors Finance Pty Ltd, and that the Heartland shares held by Seniors Money are subject to a 12-month lockup deed unless there’s a takeover bid for Heartland or some other corporate reorganisation.

Takapuna-based Richard Coon & Ian Hendry created Sentinel in 2003, 5 years after selling the Sovereign insurance group to Commonwealth Bank of Australia. Sentinel was a specialist offering financial products & services to those approaching or in retirement. Using the Seniors name, it expanded into Australia in 2004, Ireland in 2005, Spain & South Africa in 2006.

Seniors Money International, chaired by former prime minister Dame Jenny Shipley, is now 47.14% owned by 2 Quadrant Private Equity funds, of Sydney. Coon family interests hold 13.87% and Mr Hendry 4.39%.

Attribution: Company announcements.

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Heartland lifts profit 56% as it continues to cut non-core property book

Heartland NZ Ltd increased net profit after tax by 56% ($6 million) to $16.7 million in the December half, which chief executive Jeff Greenslade said was driven by continued improvement in cost of funds and was in line with expectation.

Mr Greenslade said the NZX-listed bank’s realisation of non-core property assets was on track but he expected asset growth to remain challenging, given increased competition in the business & rural sectors.

“However, growth in ‘households’ through both motor vehicle & home equity release products looks strong. We will continue to focus on product substitution to improve net operating income, continued management of operating expenses & impairment levels, as well as investigation of potential acquisition targets.”

Heartland has grown assets, announcing an agreement on 14 February to buy Seniors Money International Ltd’s New Zealand & Australian home equity release mortgage businesses for $87 million. Settlement requires Seniors shareholders’ approval and is scheduled for 1 April.

Standard & Poor’s reaffirmed d Heartland’s investment grade credit rating, with the outlook revised from ‘negative’ to ‘developing’, and Fitch Ratings confirmed its BBB- stable rating after the Seniors announcement.

Heartland’s total assets declined by $12.5 million and its net finance receivables were reduced from $2 billion to $1.9 billion as it continued to transform the balance sheet by exiting non-core loans. Among the major changes:

  • Heartland reduced non-core residential mortgage & property assets by $104.5 million and reduced some parts of its rural book – high risk or lower-yielding mortgage lending
  • The motor vehicle book grew by $21.4 million
  • Cash & cash equivalents & investments increased from $339.5 million to $434 million, reflecting the move towards holding more liquidity on the balance sheet
  • Borrowings remained stable at $2.1 billion
  • Net tangible assets increased from $331.2 million to $348.2 million. NTA/share fell from 90c in December 2012 to 85c in June, then rose to 89c in December 2013.

Net operating income rose from $51.8 million in the December 2012 half to $59 million, mostly due to the lower cost of funds, as well as product mix changes.

The operating expense ratio was 55%, down from 62% a year earlier.

The impaired asset expense fell from $5.3 million to $3.3 million, and there were no revaluations of investment properties.

Net impaired, restructured & past-due loans over 90 days reduced to $42.4 million (2.2% of net finance receivables – the net impairment ratio) from $49 million (2.4%) in June. The non-core property book made up $21.6 million of that. Total legacy non-core property assets were reduced by 19%, from $107.4 million to $87.1 million, comprising net receivables of $25.6 million & investment properties of $61.5 million.

The net impairment ratio of the core business (excluding the non-core property book) rose from 0.9% in June to 1.1% in December.

Attribution: Company release.

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Propbd on Q T25Feb14 – Tick for unitary plan submission, Dale off to Far North, Heartland & Summerset results

Committee endorses unitary plan submission, off to full council Thursday
Dale quite Kaipara tomorrow to take up Far North job
Heartland lifts profit 56%
Summerset lifts underling earnings 46%

4.45pm:
Committee endorses unitary plan submission, off to full council Thursday

Auckland Council’s unitary plan committee endorsed the council’s submission on the plan this afternoon, with minor amendments. The plan will go to the council’s governing body on Thursday for final approval & lodging. Formal submissions on the unitary plan close on Friday.

Main point of contention was whether the Independent Maori Statutory Board’s submission should be attached as an addendum to the council one, as local board submissions have (as part 2 of the overall submission). The Maori board has been closely involved in the committee’s work on the plan, but also disagreed with parts of the council submission.

The committee voted 6-3 against attaching the board’s submission. Several councillors said if the board disagreed it should submit separately, Cllr Chris Darby said the board should make its own submission as an independent entity, and deputy mayor Penny Hulse said that as the board hadn’t shown its submission to the committee and she hadn’t seen it, the board submission should be separate.

Also excluded from the council submission is a long list of points made by local boards which council planning staff deemed to be policy shifts rather than minor amendments. Local boards can have those points submitted as part of their community submissions.

They include, for example, a change from a parking maximum to a parking minimum in the mixed housing (urban) zone, several attempts at rezoning and an attempt to overthrow the council decision last August supporting housing at the Bayswater marina, by replacing it with a statement opposing residential development at the marina.

Having a council submission on its own plan is unusual. However, this unitary plan will go to a hearings process before an independent panel.

Dale quite Kaipara tomorrow to take up Far North job

Former Manukau City Council chief executive Colin Dale leaves his role as a Kaipara District Council commissioner tomorrow to become acting chief executive of the Far North District Council.

Kaipara commissioner chairman John Robertson said each of the 4 commissioners had had specific roles and Mr Dale’s was community & iwi relationship development, but more work was being handed back to staff and the remaining commissioners believed they could pick up Mr Dale’s role.

Heartland lifts profit 56%

Heartland NZ Ltd increased net profit after tax by 56% to $16.7 million in the December half, which chief executive Jeff Greenslade said was driven by continued improvement in cost of funds and was in line with expectation.

Summerset lifts underling earnings 46%

Retirement village & aged-care operator Summerset Group Holdings Ltd increased its underlying profit for the year by 46% to a record $22.2 million and net profit after tax by 131% to $34.2 million.

Net profit after tax included $8.4 million of gains in the fair value of greenfield land held in Auckland and the benefit of income tax losses of $2.2 million, being recognised for the first time because continuity of major shareholdings was anticipated.

Summerset also announced a 31% increase in annual dividend to $7 million, at 3.25c/share.

Attribution: Council committee, Kaipara & company releases.

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