New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Heartland Group Holdings / Equity Bottom-Up

<ul><li>We view Heartland Group (HGH) in two parts; firstly an attractive, high returning reverse mortgage book, worth a premium to net tangible assets (NTA), and secondly a combination of other lending that generates lower returns on equity and worth a discount to NTA.</li><li>A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.</li><li>We expect HGH to be able to meet the RBNZ's 2028 increased capital requirements, but the margin for error is low if profitability recovers slower and HGH's additional 2% capital requirement is not removed.</li></ul>

We view Heartland Group (HGH) in two parts; firstly an attractive, high returning reverse mortgage book, worth a premium to net tangible assets (NTA), and secondly a combination of other lending that generates lower returns on equity and worth a discount to NTA.A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.We expect HGH to be able to meet the RBNZ's 2028 increased capital requirements, but the margin for error is low if profitability recovers slower and HGH's additional 2% capital requirement is not removed.

Heartland Group Banking On Reverse Mortgages

<ul><li>Turners Automotive (TRA) upgraded its FY25 NPBT guidance to at least NZ$53m, reflecting stronger trading and market share gains.</li><li>TRA's FY25 Auto Retail sales volumes were ahead of FY24, despite a -6% decline in industry sales.</li><li>Colonial Motor Company (CMO) reported a 1H25 NPAT of NZ$6.9m, with focus on used vehicles and agricultural exposure providing offsets.</li></ul>

Turners Automotive (TRA) upgraded its FY25 NPBT guidance to at least NZ$53m, reflecting stronger trading and market share gains.TRA's FY25 Auto Retail sales volumes were ahead of FY24, despite a -6% decline in industry sales.Colonial Motor Company (CMO) reported a 1H25 NPAT of NZ$6.9m, with focus on used vehicles and agricultural exposure providing offsets.

Forsyth Barr Vehicle and EV Digest Edition 8—Driving Through a Patchy Recovery

<ul><li>Heartland Group (HGH) reiterates FY25 guidance with &gt;NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.</li><li>Economic conditions in NZ pressure business lending, with non-performing loans rising +5% to NZ$91m in 3Q25; 4Q25 impairments are key to achieving FY25 guidance.</li><li>Neutral stance retained with high economic uncertainty and 12-month forward PE at a modest discount to history.</li></ul>

Heartland Group (HGH) reiterates FY25 guidance with &gt;NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.Economic conditions in NZ pressure business lending, with non-performing loans rising +5% to NZ$91m in 3Q25; 4Q25 impairments are key to achieving FY25 guidance.Neutral stance retained with high economic uncertainty and 12-month forward PE at a modest discount to history.

Heartland Group - 3Q25 Update: Not Out of the Woods Yet

<ul><li>Heartland Group's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced. </li><li>NIMs were slightly better than expected, driven by Australia, and while underlying costs were in line, reported opex was higher.</li><li>This confirmed our suspicion that HGH has stepped up its opex in FY25, but management indicated cost growth should moderate from here. </li></ul>

Heartland Group's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced. NIMs were slightly better than expected, driven by Australia, and while underlying costs were in line, reported opex was higher.This confirmed our suspicion that HGH has stepped up its opex in FY25, but management indicated cost growth should moderate from here. 

Heartland Group - 1H25 Result—Inspecting the Damage

<ul><li>Heading into Heartland Group's (HGH) 1H25 result we thought there were downside risks, but the pre-announcement of a ~-NZ$50m impairment charge and 1H25 NPAT guidance of NZ$2m–$5m was worse than expected.</li><li>Significant impairments in motor and business lending are disappointing, especially given the known economic softness and the lack of further material deterioration in the economy since HGH’s late-November 2024 update.</li><li>Rising costs have also pressured profitability. </li></ul>

Heading into Heartland Group's (HGH) 1H25 result we thought there were downside risks, but the pre-announcement of a ~-NZ$50m impairment charge and 1H25 NPAT guidance of NZ$2m–$5m was worse than expected.Significant impairments in motor and business lending are disappointing, especially given the known economic softness and the lack of further material deterioration in the economy since HGH’s late-November 2024 update.Rising costs have also pressured profitability. 

Heartland Group - Car Crash Crushes Confidence

New Zealand

Heartland Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides banking services which includes savings and deposits, mortgage, business loans, consumer financing, and Internet banking services. Heartland Group Holdings serves clients in New Zealand.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Heartland Group Holdings (HGH NZ)

Heartland Group Banking On Reverse Mortgages

A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.

Forsyth Barr

Forsyth Barr Vehicle and EV Digest Edition 8—Driving Through a Patchy Recovery

Turners Automotive (TRA) upgraded its FY25 NPBT guidance to at least NZ$53m, reflecting stronger trading and market share gains.

Forsyth Barr

Heartland Group - 3Q25 Update: Not Out of the Woods Yet

Heartland Group (HGH) reiterates FY25 guidance with >NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.

Forsyth Barr

Heartland Group - 1H25 Result—Inspecting the Damage

Heartland Group's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced.

Forsyth Barr

Heartland Group - Car Crash Crushes Confidence

With its recent impairment track record and lending exposure to the soft NZ economy, risks remain skewed to the downside.

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)