Heartland announces solid FY2024 result

NZX/ASX release
29 August 2024

Heartland announces solid FY2024 result, sets foundation for continued growth

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) has announced a net profit after tax (NPAT) of $74.5 million for the financial year ended 30 June 2024 (FY2024). On an underlying basis, FY2024 NPAT was $102.7 million.

In a challenging economic environment, Heartland achieved solid gross finance receivables (Receivables) growth, up 6.4% on the financial year ended 30 June 2023 (FY2023). While some volatility is expected to continue through the remainder of the 2024 calendar year, the longer-term outlook for Heartland is positive. Having executed significant strategic milestones in FY2024, further growth is anticipated in the financial year ending 30 June 2025 (FY2025) as Heartland continues towards its ambitions for the financial year ending 30 June 2028 (FY2028).

Heartland’s FY2024 result was impacted by the rapidly deteriorating economic conditions in May and June 2024 which saw the emergence of additional provisions primarily in Heartland Bank Limited’s (Heartland Bank’s) Asset Finance, Motor Finance and Rural portfolios. This resulted in a 4.9% shortfall to guidance. This late increase in provisions reflects (amongst other things) enhancements to Heartland Bank’s Motor Finance provisioning model, a more conservative provisioning approach on certain Rural exposures, and the effect of the sustained inflationary environment on some consumer and business borrowers.

Highlights
‒ Solid FY2024 result achieved in a challenging economic environment.
-- One-off or non-cash technical items had a $28.2 million impact on NPAT.
-- The shortfall to guidance was largely due to the late increase of $10.1 million of provisions, primarily in Heartland Bank’s Asset Finance, Motor Finance and Rural portfolios (without which Heartland would have seen a result within guidance).
‒ Growth in Receivables of 6.4% ($432.1 million) on FY2023 to $7.2 billion in FY2024.
-- Reverse Mortgages up 20.2% in New Zealand and 19.7% in Australia.
-- Asset Finance up 8.0% in a market with difficult trading conditions.
-- Motor Finance up 3.8% in a market where total new and used car sales by dealers were down by 12.7%.
‒ Significant strategic milestones set the foundation to achieve FY2028 growth ambitions.
-- Completed the acquisition of Challenger Bank Limited (Challenger Bank) and subsequently rebranded the authorised deposit taking institution (ADI) to Heartland Bank Australia Limited (Heartland Bank Australia).
-- Successfully completed a $210 million equity raise to fund the acquisition, with strong investor support.
-- Heartland Bank’s core banking system was successfully upgraded, enabling increased digitalisation and automation.


For the full announcement, see the attachments to this release:
‒ Heartland FY2024 - Results Announcement
‒ Heartland FY2024 - Investor Presentation
‒ Heartland FY2024 - Results Announcement Template
‒ Heartland FY2024 - Distribution Notice
‒ Heartland FY2024 - ASX Listing Rule 1.15.3 Statement
‒ Heartland FY2024 - Financial Statements
‒ Heartland Bank FY2024 - Disclosure Statement

– ENDS –

The persons who authorised this announcement:
Jeff Greenslade, Chief Executive Officer
Andrew Dixson, Chief Financial Officer

For further information and media enquiries, please contact:
Nicola Foley, Group Head of Communications
+64 27 345 6809
[email protected]
Level 3, Heartland House, 35 Teed Street, Newmarket, Auckland, New Zealand

---

Announcement PDF