Yovich & Co. Market Update - 30 August 2021
Aug 30, 2021 | Commentary
In summary, the NZX50G had 16 companies on the downside, 1 remained unchanged and 33 companies were on the upside. Another positive week for the NZX50G increase closing the week 0.92% higher. The NZ dollar appreciated against the USD and AUD last week recovering from a pull back on the announcement that the RBNZ left the OCR as status quo. South Korea has become the first major Asian economy to raise interest rates since the coronavirus pandemic began. The Bank of Korea increased its base rate of interest from a record low of 0.5% to 0.75%. The move is aimed at helping curb the country's household debt and home prices. In the U.S. equities gained to another record high as investors took assurance from comments by Jerome Powell that the withdrawal of stimulus would be gradual. The Federal Reserve chairman reinforced the message that it would be appropriate to begin tapering bond purchases by the end of the year but also drew a line between asset purchases and interest rates, saying the Fed wouldn’t be in a hurry to begin increasing rates after it begins tapering its $120bn-a-month bond-buying program.
Tax paid profit for the year ending 30 June 2021 was up 20.9% at $87m, revenue increased 6.70% to $251m, return on equity was up 144 basis points to 11.9%, net interest margin up 2 basis points at 4.35%. Net tangible assets (NTA) increased from $1.05 to $1.16 cents per share. Heartland’s strategic vision is to create sustainable growth and differentiation through providing best or only products via scalable digital platforms. There are four strategic elements to the fulfilment of this; Business as Usual growth (reported on below), Frictionless Service at the Lowest Cost, Expansion in Australia, Acquisitions which fit with and add value to the above. A final gross dividend of 9.72 cents is payable 15 September and has an ex-dividend date of 31 August 2021.
Current Share Price: $2.33, Forecasted dividend yield: 4.72%, Target Price: $2.01.
Announced it is offering up to $75 million (oversubscriptions of up to $25 million at Oceania’s discretion) of seven year secured fixed rate bonds. The interest rate for the Bonds will be set on the rate set date as being equal to the swap rate plus the issue margin (1.45% to 1.60%), subject to a minimum interest rate of 3.20% per annum. An announcement of the actual margin and interest rate is expected 3 September 2021 following a bookbuild process. Closing date for the bonds is midday Friday 3 September, if you would like to participate in the offer, please contact the team at Yovich & Co.
Current Share Price: $1.52, Forecasted dividend yield: 2.58%, Target Price: $1.68, Bond Yield: 3.20%
Tax paid profit for 1H21 ending 30 June 2021 was up 12% at $28m (underlying up 15.4% at $33m) revenues unchanged at $253m. The Horticulture division delivered an Underlying EBITDA of $38m (1H20: $36.9m), up 2.9%. Mr Apple total own grown export volumes are forecast to be 3.6m total container equivalents (TCEs) (1H20: 3.9m TCEs). The Food Ingredients division delivered another excellent first half result with Underlying EBITDA of $16.1m (1H20: $11.0m). Mr Borland said, “This strong performance reflects the sustained global demand for petfood, with the division experiencing a 30% increase in volumes sold compared to 1H20”. Due to a strong 1H21 result, Scales has upgraded its full year guidance. Underlying Net Profit is now expected to be between $32m and $37m, implying an Underlying EBITDA of between $65m and $72m NTA increased from $2.33 to $2.40.
Current Share Price: $5.15, Forecasted dividend yield: 3.69%, Target Price: $4.88.
Upcoming Ex-Dividend and Dividend Payment dates
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