Guidance as a floor, not a range.

We lock a binary: Heartland Group Holdings' reported underlying NPAT for fiscal 2027 is NZ$92m or higher. Confidence 91%.

Guidance is at least NZ$102m. Our threshold sits NZ$10m, about 9.8%, below that — and NZ$1.6m above the NZ$90.4m banked in FY2026. The lock asks for a fractional improvement on a year in which underlying profit nearly doubled.

This series has now encountered five distinct guidance architectures, and each one changes how a lock should be built.

Most companies publish a RANGE: Auckland Airport's NZ$290-330m, Vector's NZ$540-560m, Adani Ports' INR 25,000-26,000 crore. Mercury published a single POINT, NZ$1,075m, conditioned on 4.1 terawatt hours of hydro. Sun Pharma published a PHRASE — high single digits — with no number at all. Wipro publishes a one-quarter-ahead ABSOLUTE DOLLAR range, the most precise form we have seen.

Heartland publishes a FLOOR: underlying NPAT of AT LEAST NZ$102m. There is no upper bound, and that asymmetry is informative. A company that says at least is telling you where it believes the downside sits, which is exactly the quantity a floor-style lock needs. It is more useful to this series than a midpoint, because a midpoint has to be discounted for the possibility that management centred it optimistically.

So the buffer here is 9.8% below a stated minimum rather than below the bottom of a range that management may have set generously.

Heartland's FY2026 produced underlying NPAT of NZ$90.4m and reported NPAT of NZ$93.2m — a gap of NZ$2.8m, with reported the HIGHER of the two, which is the opposite of the usual direction and easy to get backwards. Underlying ROE was 7.1% against a reported 7.3%.

There is a third complication that matters more. The FY2027 guidance is explicitly stated EXCLUDING any costs related to the proposed TSB transaction. If that acquisition proceeds, transaction and integration costs will land somewhere, and reported and underlying will diverge by more than the NZ$2.8m seen in FY2026. A lock written loosely as Heartland FY2027 profit above NZ$92m could resolve HIT on the guidance basis and MISS on the reported basis in the same annual report.

The criterion below therefore names UNDERLYING NPAT on the guidance basis, excluding TSB transaction costs, and rules out reported NPAT in terms. This is the seventh distinct non-IFRS or adjusted-measure convention this series has had to name explicitly, after underlying versus reported EBITDA at SkyCity, normalised versus statutory at Skellerup, adjusted at Vector, EBIT ex-property at Fletcher, standalone versus consolidated across three Indian tranches, and JSE headline earnings at Standard Bank.

What supports the floor is the operating direction. Net interest margin widened 36 basis points to 3.98% on lower funding costs, and the impairment expense ratio fell 55 basis points to 0.45% as asset quality strengthened — margin up and credit losses down at the same time. The residual 9% is a New Zealand credit deterioration reversing that impairment improvement, or a funding-cost turn compressing the margin.