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Pushpay lifts annual earnings guidance; shares rise

Wednesday 19th June 2019

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Digital church collection payment operator Pushpay Holdings lifted its guidance for annual earnings and total processing volumes after a positive start to the financial year. 

It now expects earnings before interest, tax, amortisation and fair value adjustments to be between US$18.5 million and US$20.5 million in the year ending March 31, 2020, versus a prior forecast of US$17.5 million and US$19.5 million. It lifted expected total processing volume to between US$4.8 billion and US$5.0 billion from US$4.6 billion and US$4.8 billion. 

The company reiterated its annual operating revenue guidance of between US$122.5 million and US$125.5 million and gross margin guidance of over 63 percent.

Pushpay reported ebitda of US$1.6 million in the 2019 March year on operating revenue of US$95.9 million. 

The stock was recently up 2.4 percent at $3.89. 

Chief executive Bruce Gordon told the annual meeting that the company continues to target more than 50 percent of the medium and large Church segment and "we continue to make progress toward this aspirational goal." 

The NZX-listed, US-headquartered software-as-a-service company provides a donor management system, including donor tools, finance tools and a custom community app for churches. 

Gordon said competition is "very stable", with no new entrants in the market.

He also said the company is evaluating potential strategic acquisitions. In response to a shareholder question, he said: "We are laser-focused on the US faith market."

Gordon said the company is actively in discussion with a number of parties that would allow Pushpay to continue to build out additional features. "The list of companies that are at scale is not a long list." 

Shareholders voted on six resolutions, including a resolution to elect Peter Huljich as a non-independent director to Pushpay’s board.

In response to a question about why Pushpay’s notice of meeting failed to mention Huljich’s 2011 guilty plea to misleading investors in his KiwiSaver scheme, chair Graham Shaw said "in hindsight, I will say we should have done that." 

Huljich failed to disclose that he had topped up his KiwiSaver scheme with his own money, artificially inflating its performance. 

"Peter is no stranger to Pushpay and no stranger to Pushpay's shareholders." Shaw said. "It was our read that disclosure was not necessary." He underscored "we are not running away, or hiding" from the conviction.

On a personal note, Shaw said he had done his "due diligence" before joining the company and "was comfortable doing so." He also noted that "Peter's recommendation has come from the board and I certainly support it." 

Huljich was personally fined almost $113,000 while the company, Huljich Wealth Management, was fined $239,000 plus $95,265 in legal and court costs. 

Huljich had previously been an alternate director for his father, Christopher, between Nov. 7, 2018 and May 8, 2019 and was appointed to the Pushpay board in his own right on May 8. That means his position on the board has to be endorsed or rejected by shareholders at the annual meeting.

Huljich family interests own almost 22 percent of Pushpay. The New Zealand Shareholders Association said it will vote all the proxies it holds against the election. 

Shareholders were also asked to vote on a resolution to increase the total amount of annual remuneration payable to non-executive directors from US$450,000 to US$650,000.

The lift will "enhance the board's ability to retain and attract directors of the highest caliber including in the US market," the company said. It will also bring the remuneration most closely in line with current market rates. 

The voting results have yet to be released. 


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