Partial Deal | Pushpay Acquisition, Z Energy Sinks

17 December 2019

Global markets​ were slightly higher on Friday as​ the US and China appear to have agreed on a trade truce​. 
​The initial trade agreement​ has meant ​fresh tariffs due Sunday have been averted​ b​ut it remai​ns un​clear whether China agreed to enough agricultural purchases or if the US had planned to roll back some existing tariffs.

At the same time, the UK election has seen a landlside result, which will likley see Brexit take place at the end of January. It seems we have some clarity around two major uncertainties that have been undermining the global economy ​as we head into the end of 2019.
 

Stock in Focus: Pushpay (PPH:NZX / PPH:ASX)

Pushpay ​shares were higher on Friday as the church payments app developer​ announced it has bought Church Community Builder for US$87.5 million, funded by its existing cash and a debt facility.

Church Community Builder is a US-based leading provider of Church Management Solutions (ChMS) to over 4,000 churches in the US faith sector. The combination of PPH and CCB will deliver a fully integrated and differentiated, leading solution for the faith market​.

The transaction is material for Pushpay (Church Community Builder ​has 4,000 church clients vs PPH’s 7,900) and the strategy makes sense to us in terms of PPH building scale through acquisition, while also increasing total revenue per customer. 

Church Community Builder ​founder Chris Fowler will join the PPH Board and has acquired a US$15m interest in PPH from co-founder Chris Heaslip.

We currently have a BUY rating on Pushpay.
Members should look out for a full update on Pushpay to be released in our weekly report.
 

   
Australia & New Zealand Market Movers

​The Australian marke​t made gains on Friday (ASX 200 index ​+​0.46%)​ fo​llowing reports the US and China had agreed, in principle, to cut existing tariffs and cancel the imposition of further duties.​ ​Hopes of further stimulus from China also gave iron ore prices a boost earlier in the week, pushing the major mining stock​s such as BHP and Rio Tinto higher.​ Lithium stocks also rose fir​mly over the wee​k – with ​Orocobre​,​ Mineral Resources​, ​and Galaxy Resources ​experiencing double digit gains.​

The New Zealand market ​was lower on Friday (NZX 50 index ​-0.59​%)​ as ​Z Energy s​ank on profit warning​.​ Z Energy fell -13% as the transport fuels retailer downgraded its earnings outlook and said it would pay a smaller dividend as its retail margins remained under pressure in an increasingly competitive market. At the same time, refining margins were skinnier.

 

3 Things Markets Will be Watching this Week

  1. ​​​US 3rd quarter economic growth (GDP) data is published.
  2. ​Minutes from ​the latest Reserve Bank of Australia meeting will be released.
  3. NZ 3rd quarter GDP will also be released.  

 

Have a Great Day,
 

Team

Global markets​ were slightly higher on Friday as​ the US and China appear to have agreed on a trade truce​. 

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