Heartland profit forecast may lift after Harmoney float

AUCKLAND: Heartland Group said its profit forecast for 2021 may need upward revision to reflect the value of its 8.44% stake in personal lender Harmoney, which listed on the ASX and NZX this week.

At the $A3.50 issue price, Heartland’s stake would be worth $A29.8 million ($NZ31.4 million).

In its most recent accounts, Heartland’s equity investments — mostly Harmoney — came to $NZ16.3 million.

Heartland said it was reassessing the valuation of its equity investment in Harmoney.

Heartland has entered into escrow restrictions prohibiting the disposal of its shareholding until the occurrence of certain events.

‘‘Heartland will reassess the fair value of its equity investment in Harmoney as part of the preparation of its financial results for the sixmonth period ending 31 December, 2020,’’ the company said.

In determining fair value, it would take into consideration the market value of Harmoney shares alongside a range of other factors.

This could result in an increase in the investment’s fair value.

Heartland said its investment in Harmoney was not significant in the context of its total assets.

However, as an increase would give a oneoff boost to net profit that had not been taken into account, its forecast net profit for 2021 might need to be revised.

In September, Heartland announced a fullyear net profit of $72 million, and said it expected its net profit for the June 2021 year to be in the range of $83 million to $85 million.

Harmoney on Thursday gained a primary listing on the ASX and a ‘‘foreign exempt’’ listing on the NZX. — The New Zealand Herald