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Highlights

  • Heartland’s interim dividend dropped to 2.0 cps for H1 FY 2025, down from 4.0 cps in H1 FY 2024.
  • Net interest income rose by 7.5% YoY to NZD 149.1 million in H1 FY 2025.
  • Other operating income jumped 36.4% YoY to NZD 6.0 million in H1 FY 2025.
  • Heartland expects an underlying NPAT of at least NZD 45 million for FY 2025.
  • The company remains committed to achieving its FY 2028 goals.

Heartland Group Holdings Limited (NZX:HGH), a financial services provider with operations in New Zealand and Australia, has recently reduced its dividend payout despite a significant increase in  net intersect income in the six months ended 31 December 2024 (H1FY25).

Financial Performance Highlights

Heartland reported a 7.5% YoY increase in net interest income (NII) to NZD 149.1 million in H1FY25, up from NZD 138.7 million in H1FY24. During the reported period, net operating income (NOI) climbed 8.4% YoY to NZD 155.1 million, driven by contributions from the Australian bank, Heartland Bank Australia Limited, although partially offset by derisking activities and repositioning efforts at the New Zealand bank, Heartland Bank Limited (New Zealand), non-performing loans (NPL).

Other operating income (OOI) surged by 36.4% YoY to NZD 6.0 million, reflecting an additional NZD 1.6 million compared to the previous period.

Dividend Decline

Despite the positive income trajectory, Heartland declared an interim dividend of 2.0 cents per share (cps) for the reported period, down 2.0 cps from H1FY24. The interim dividend yield dropped to 7.9%, compared to 11.9% in the prior year.

Strategic Outlook and Future Ambitions

Heartland projects an underlying net profit after tax (NPAT) of at least NZD 45 million for FY 2025, with expectations of one-off adjustments in the second half of the year due to fair value changes in equity investments and other nonrecurring expenses.

Despite near-term financial pressures, the company is confident in its ability to meet its FY 2028 ambitions, focusing on sustainable and profitable growth within New Zealand’s core lending portfolios. Heartland aims to expand its net interest margin (NIM), targeting an exit NIM of over 4% by FY 2025, while uplifting the quality of its Motor Finance and business lending portfolios through simplification and strengthened credit risk management. Additionally, the company is committed to driving operational efficiency by leveraging digitalisation and automation to control costs.

Share performance of HGH

HGH shares closed 1.18% higher at NZD 0.86 per share on 3 March 2025. Over the past year, HGH’s share price has dropped by nearly 27.25%, while in the past one month, it has decreased by 20.37%.

52-week high of HGH is NZD 1.309, recorded on 11 March 2024 and 52-week low is NZD 0.84, recorded on 28 February 2025.

Resistance and support summary

 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 03 March 2025. The reference data in this report has been partly sourced from EODHD/Others.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.