Growth lifts Heartland net profit 9%
Heartland Group was the only stock to gain on the S&P/NZX50 Index after it lifted annual net profit 9 per cent amid growth in its reverse mortgages, motor and business lending divisions.
Net profit for the 12 months ended June 30 rose to $73.6 million from $67.5m the previous year.
Lending growth overall rose 10.7 per cent, or by 424.8m, before foreign exchange adjustments with Australian reverse mortgages rising 24 per cent, or by $163m, New Zealand reverse mortgages up 11.4 per cent, or by $52m, and motor lending up 13.3 per cent, or by $127.6m.
Heartland shares recovered to be 2 cents higher at $1.63, the only stock in the benchmark index to gain yesterday, with the NZX50 down 1.3 per cent in afternoon trading. The firm's shares fell as low as $1.60 and are up 3 per cent from a year ago compared with the NZX50’s 21 per cent gain.
Heartland's return on equity was unchanged from the 2018 financial year at 11.1 per cent but rose from 10.3 per cent in the first half to 12.2 per cent in the second half.
Net interest margin eased to 4.33 per cent from 4.42 per cent.
The company, which includes the New Zealand registered Heartland Bank and its separate Australian reverse mortgage business, says its strategic focus remains on niche markets where it aims to deliver either best or only products to depositors and borrowers.
Heartland will pay a final dividend of 6.5 cents per share, up 1 cent on the previous year’s final dividend, taking the annual payout to 10 cents. The record date is August 23 with payment due on September 6.
Heartland is guiding for net profit for the year ending June, 2020 to be between $77-80m. Business intermediated lending grew 31.4 per cent, or by $101.7m in the year just gone but business relationship receivables fell by 16.1 per cent, or $107m, and rural relationship receivables fell 4.2 per cent, or $23.4m.