Heartland FY22 results and NZ$200 million equity raising

Not for release to US wire services or distribution in the United States. NZX/ASX release 23 August 2022 Heartland announces record FY2022 profit, and equity raising to retire bridge debt and fund growth ambitions for existing business Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) is pleased to announce a net profit after tax (NPAT) of $95.1 million for the financial year ended 30 June 2022 (FY2022), an increase of $8.1 million (9.3%) compared with the financial year ended 30 June 2021 (FY2021). On an underlying basis, FY2022 NPAT was $96.1 million, an increase of $8.2 million (9.3%) compared with the FY2021 underlying NPAT. Heartland is also pleased to announce a $200 million equity raise comprising a $130 million fully underwritten placement and a $70 million non-underwritten share purchase plan to shareholders in New Zealand and Australia, with the ability for Heartland to accept oversubscriptions at its discretion. Proceeds will be used to repay a A$158 million acquisition finance facility outstanding in relation to the recent acquisition of StockCo Holdings 2 Pty Ltd and StockCo Australia Management Pty Limited (together, StockCo Australia), and to provide additional growth capital for Heartland's existing businesses in Australia and New Zealand. Highlights for FY2022 - NPAT of $95.1 million, up 9.3% ($8.1 million). Underlying NPAT of $96.1 million, up 9.3% ($8.2 million) on FY2021 underlying NPAT. - One-off items had a $0.9 million net impact on NPAT. - Gross finance receivables (Receivables) of $6.2 billion, up 15.3% ($765.9 million). - Return on equity (ROE) of 12.1%, up 21 basis points (bps). Underlying ROE of 12.6%, up 59 bps. - Net interest margin (NIM) of 4.16%, down 19 bps. - Net interest income (NII) of $250.1 million, up 7.1%. - Cost to income (CTI) ratio of 43.6%, down 3.2 percentage points (pps). Underlying CTI ratio of 42.5%, down 2.3 pps, and CTI ratio of 41.9% for the second half of FY2022 (2H2022). - Impairment expense as a percentage of average receivables decreased from 0.31% in FY2021 to 0.25% in FY2022. Underlying impairment expense of 0.29% benefitted from an improved book quality. - FY2022 final dividend of 5.5 cents per share (cps), taking FY2022 total dividend to 11.0 cps - flat on FY2021, with a payout ratio consistent with the average over the last three years. - Earnings per share (EPS) of 16.1 cps, up 1.2 cps. - Completed the acquisition of StockCo Australia on 31 May 2022. - 120% increase in users of Heartland Bank Limited's (Heartland Bank) mobile app. - Heartland Bank awarded Canstar Savings Bank of the Year 2022 (fifth consecutive year), and awards for its Direct Call, 32 Day Notice Saver and 90 Day Notice Saver accounts. - New Zealand Reverse Mortgages awarded Consumer Trusted Accreditation (fifth consecutive year), and helped its 20,000th customer. - Australian Reverse Mortgages business increased market share to 33.1%. For the full announcement, see the attachments to this release: - Heartland FY22 Results and Offer Announcement - Investor Presentation - Heartland NZX Results Announcement Template - Heartland Distribution Notice - Appendix 3A.1 for dividend - ASX Listing Rules 1.15.3 Statement - NZX Corporate Action Notice - Cleansing Notice - Heartland Group Holdings Financial Statements - Heartland Bank Disclosure Statement - LTI Buyback Disclosure Document - ENDS - For further information, please contact the person(s) who authorised this announcement: Jeff Greenslade Chief Executive Officer M 027 382 0023 Andrew Dixson Chief Financial Officer M 021 263 2666 Address: Level 3, Heartland House 35 Teed Street Newmarket, Auckland New Zealand For media enquiries, please contact: Nicola Foley Group Head of Communications M 027 345 6809 E nicola.foley@heartland.co.nz End CA:00397408 For:HGH Type:FLLYR Time:2022-08-23 09:21:46