Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Heartland NZ lifts 1H profit by 9.2% on improved margins

Heartland NZ lifts 1H profit by 9.2% on improved retail, business and rural earnings

Feb. 25 (BusinessDesk) – Heartland New Zealand, which gained bank registration in December, posted a 9.2 percent gain in first-half profit on increased earnings from retail, business and rural lending and a reduction in costs.

Profit rose to $10.7 million in the six months ended Dec. 31, from $9.8 million a year earlier, the Christchurch-based company said in a statement. Net operating income rose 15 percent to $51.8 million, while operating expenses fell 10 percent to $31.9 million.

Growth in the net operating income mainly reflected the acquisition of PGG Wrightson Finance in August 2011 and lower cost of funds, the company said.

That more than offset a wider $5.28 million loss from the non-core property businesses acquired from Marac as part of the merger that created the company. The year-earlier loss was $1.2 million. Heartland took a $4 million impairment expense against the property book, up from impairments of $1.6 million a year earlier.

Heartland shares rose 2.7 percent to 75 cents after the results, which beat brokerage First NZ Capital’s forecast of $11.1 million profit. It will pay a first-half dividend of 2 cents a share on April 5 to shareholders on the register as at March 20.

Net impaired, restructured and past due loans over 90 days were $80.2 million as at Dec. 31, down from $90.5 million a year earlier and mainly reflecting the non-core property book, which consists of $87.9 million of receivables and $55.3 million of investment properties.

The company has embarked on a review of its plan for a managed exit from non-core property over five years.

The receivables book for retail and consumer, the biggest unit of the company’s core business, fell by $9 million to $945.8 million, while net operating income rose 2.3 percent to $24.1 million. Heartland said strong motor vehicle receivables growth was offset by a shrinking residential mortgage book in the face of a competitive market. Profit rose to $17 million from $14.9 million.

Business receivables shrank by 9.7 million to $530.5 million, which it said reflected higher levels of repayments “in a low credit growth market.” Business profit rose to $8.9 million from $5.5 million a year earlier.

The rural receivables book grew to $480.6 million from $478.6 million, which it said reflected low seasonal demand in livestock trading and a low credit growth environment. It expects a pickup in the second half. Rural earnings rose to $8.7 million from $5.1 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

NZ's Space Programme: Rocket Lab Makes It To Space (But Not Orbit)

Electron lifted-off at 16:20 NZST from Rocket Lab Launch Complex 1 on the Mahia Peninsula in New Zealand. It was the first orbital-class rocket launched from from a private launch site in the world. More>>

ALSO:

Earlier:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO:

MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>

ALSO: