Tax benefit boosts Heartland profit
Would-be bank Heartland has posted a $23.6 million profit, boosted by another one-off tax benefit.
Heartland had forecast a profit of between $20m and $22m which included a one-off deferred tax benefit of $6.2m for the year to June 30, 2012.
The result, announced this morning, also included an additional $3.4m one-off tax benefit, which resulted from historic tax losses of Marac Finance, one of the companies forming the merged lending group.
Excluding that, Heartland said its earnings of $20.2m were in line with profit guidance.
The annual result for the new lending group was $16.5m greater than the previous year's $7.1m, but PGG Wrightson's finance arm was not part of the lending group in the June 30, 2011 year.
Heartland bought PGG Wrightson Finance on August 31 last year and it is included in this year's result.
Heartland was formed 20 months ago from the merger of Marac Finance with two building societies, CBS Canterbury and Southern Cross Building Society, and the PGGW finance arm added nine months later.
Heartland's net finance receivables were $2.1 billion at June 30, 2012 compared to $1.7b the year before. The increase was largely due to the purchase of PGGW Finance.
During the year asset growth in the business, rural and consumer lending divisions were offset by reductions in non-core property and retail mortgage book.
Heartland said its earnings per share were 6 cents calculated on weighted average shares.
The second year had more than double the earnings of the first. Net profit before tax in the second half was $14.7m compared to $5.6 in the first half. The improvement in the second half was driven by improved margins and lower costs.
Heartland said the year had been challenging and competitive.
During the year it had successfully rebranded the group to Heartland and transitioned to one core banking system.
A key objective was to create a New Zealand listed and controlled banking group and the group had started the process of seeking bank registration with the Reserve Bank.
As for dividends, the group's policy would be outlined in two months time at its annual meeting in early November where it would also provide profit guidance for the year to June 30, 2013.
While trading conditions were challenging ''Heartland expects a continual improvement in underlying performance in the year ahead.''