Heartland FY22 results and NZ$200 million equity raising

Not for release to US wire services or distribution in the United States.

NZX/ASX release
23 August 2022

Heartland announces record FY2022 profit, and equity raising to retire bridge debt and fund growth ambitions for existing business

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to announce a net profit after tax (NPAT) of $95.1 million for the financial year ended 30 June 2022 (FY2022), an increase of $8.1 million (9.3%) compared with the financial year ended 30 June 2021 (FY2021). On an underlying basis, FY2022 NPAT was $96.1 million, an increase of $8.2 million (9.3%) compared with the FY2021 underlying NPAT.

Heartland is also pleased to announce a $200 million equity raise comprising a $130 million fully underwritten placement and a $70 million non-underwritten share purchase plan to shareholders in New Zealand and Australia, with the ability for Heartland to accept oversubscriptions at its discretion. Proceeds will be used to repay a A$158 million acquisition finance facility outstanding in relation to the recent acquisition of StockCo Holdings 2 Pty Ltd and StockCo Australia Management Pty Limited (together, StockCo Australia), and to provide additional growth capital for Heartland’s existing businesses in Australia and New Zealand.

Highlights for FY2022
‒ NPAT of $95.1 million, up 9.3% ($8.1 million). Underlying NPAT of $96.1 million, up 9.3% ($8.2 million) on FY2021 underlying NPAT.
‒ One-off items had a $0.9 million net impact on NPAT.
‒ Gross finance receivables (Receivables) of $6.2 billion, up 15.3% ($765.9 million).
‒ Return on equity (ROE) of 12.1%, up 21 basis points (bps). Underlying ROE of 12.6%, up 59 bps.
‒ Net interest margin (NIM) of 4.16%, down 19 bps.
‒ Net interest income (NII) of $250.1 million, up 7.1%.
‒ Cost to income (CTI) ratio of 43.6%, down 3.2 percentage points (pps). Underlying CTI ratio of 42.5%, down 2.3 pps, and CTI ratio of 41.9% for the second half of FY2022 (2H2022).
‒ Impairment expense as a percentage of average receivables decreased from 0.31% in FY2021 to 0.25% in FY2022. Underlying impairment expense of 0.29% benefitted from an improved book quality.
‒ FY2022 final dividend of 5.5 cents per share (cps), taking FY2022 total dividend to 11.0 cps – flat on FY2021, with a payout ratio consistent with the average over the last three years.
‒ Earnings per share (EPS) of 16.1 cps, up 1.2 cps.
‒ Completed the acquisition of StockCo Australia on 31 May 2022.
‒ 120% increase in users of Heartland Bank Limited’s (Heartland Bank) mobile app.
‒ Heartland Bank awarded Canstar Savings Bank of the Year 2022 (fifth consecutive year), and awards for its Direct Call, 32 Day Notice Saver and 90 Day Notice Saver accounts.
‒ New Zealand Reverse Mortgages awarded Consumer Trusted Accreditation (fifth consecutive year), and helped its 20,000th customer.
‒ Australian Reverse Mortgages business increased market share to 33.1%.

For the full announcement, see the attachments to this release:
- Heartland FY22 Results and Offer Announcement
- Investor Presentation
- Heartland NZX Results Announcement Template
- Heartland Distribution Notice
- Appendix 3A.1 for dividend
- ASX Listing Rules 1.15.3 Statement
- NZX Corporate Action Notice
- Cleansing Notice
- Heartland Group Holdings Financial Statements
- Heartland Bank Disclosure Statement
- LTI Buyback Disclosure Document

– ENDS –

For further information, please contact the person(s) who authorised this announcement:

Jeff Greenslade
Chief Executive Officer
M 027 382 0023

Andrew Dixson
Chief Financial Officer
M 021 263 2666

Address:
Level 3, Heartland House
35 Teed Street
Newmarket, Auckland
New Zealand

For media enquiries, please contact:
Nicola Foley
Group Head of Communications
M 027 345 6809
E [email protected]

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Announcement PDF