Week Ahead | Pushpay

22 June 2020

Global markets were mixed on Friday amid a renewal of uncertainty over how quickly US states can emerge from lockdowns after data showed record levels of COVID-19 in Florida and Arizona. Apple announced it was closing some stores in those US states which have seen an increase in COVID-19 cases. Earlier on Friday, the market was encouraged by a Bloomberg report that US and Chinese officials had met in Hawaii, with China reportedly promising to boost its purchases of US agricultural goods.

Pushpay (PPH:NZ / PPH:AX)

Shares in church payments software business Pushpay (PPH) surged to new all-time after their AGM as they highlighted the success experienced through the 2020 financial year.

PPH once again upgraded their underlying earnings (EBITDAF) guidance by US $2m (or +4%) to be between US $50.0-$54.0m for the 2021 financial year driven by carrying forward the strong momentum over the past year with solid revenue growth and improved operating efficiencies and margins.

We maintain our BUY rating on Pushpay as the underlying business continues to present an attractive investment opportunity into the giving space. The recent acquisition and covid-19 are both playing an important part accelerating growth for the business. While the share price has taken off, there is plenty of growth ahead and PPH is entering profitability with strong operating leverage and we maintain a positive medium-term view.


Australia & New Zealand Market Movers

The Australian market was in slight positive territory on Friday (ASX 200 Index +0.1%). The market started the day higher as data showed that retail sales had rebounded by 16.3% to almost $29 billion in May. This has largely erased April's -17.7% decline, its worst result ever.
Technology was the best-performing sector, led by software companies WiseTech Global (+7.8%) and Altium (+6.6%), as well as data centre operator NextDC (+4.2%). Westpac was the only major bank to rise and iron ore miners were the biggest drag on the market index. 
Nick Scali shares have soared 20% after the furniture retailer said it would bring forward a dividend it deferred at the height of the pandemic, another example of positive surprise in the retail sector. 

The New Zealand market was a touch higher on Friday (NZX 50 Index +0.2%) as while the new virus flare-ups had put the brakes on the market, but central bank support and recent earnings results were strong enough to maintain momentum. 
Port of Tauranga led the market higher, rising 9% to an all-time high. The stock had generally been performing strongly but Friday's jump was driven by index re-weightings.
Outside the benchmark index, Eroad rose 11% after reporting a 32% lift in annual revenue. The company said it expects slower growth in recessionary conditions through the 2021 financial year. Metro Performance Glass fell -6% after reporting an annual loss of $77.9 million. It wrote down goodwill by $86.5 million because of increased competition, the impact of covid-19 and because it expects lower construction activity for the next 12 to 24 months.


3 Things Markets Will be Watching this Week

  1. ​​​Covid-19 related news flow remains top of mind. 
  2. The Reserve Bank of New Zealand June OCR Review takes place on Wednesday, with the market not expecting too many surprises. 
  3. In the US there will be a release of Q1 GDP figures and the Fed is scheduled to release results of its annual stress tests on the largest US banks. 

Have a Great Day,


Global markets were mixed on Friday amid a renewal of uncertainty over how quickly US states can emerge from lockdowns after data showed record levels of COVID-19 in Florida and Arizona.

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