Friday 14th November 2014
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Pushpay Holdings, the NZAX listed mobile payment app developer, widened its loss in the first half as it invested in new products and chased sales in its key US market.
The Auckland and Redmond based company widened its loss to $2.7 million in the six months ended Sept. 30, from $568,000 in the same period a year earlier, it said in a statement. Sales climbed to $1.6 million from $90,000, while operating expenses rose to $4.5 million, from $661,000.
The mobile payment app developer has targeted the faith sector in the US, which consists of over 314,000 churches with an average of 500 attendees, and has moved its executive and sales and marketing team to the US to pursue growth. Pushpay said it is on target to grow its monthly customer base to over 600 merchants, processing over $8.3 million in monthly transactions by the end of the year and says it will be cash flow break even, on a monthly basis, once it hits 1,250 merchants.
"As an early stage company, Pushpay's management believes that it is preferable to focus on and invest in growth as the best means to achieve overall value in its business," Pushpay said. "Following the focused investment in people, product and business processes we are well positioned to execute on our growth plans and deliver long term shareholder value."
The company listed on the NZAX in August at $1 per share in a compliance listing, meaning it raised no funds from the float. The shares last traded at $2.35 and Pushpay has plans to graduate to the mainboard once NZX wraps up the outgoing small cap market.
In the six month period it raised $11.7 million in new capital, which included $2.7 million in April and a further $9 million in July, when it issued shares at $1 each valued the company at $50 million. The July capital raise was underwritten by cornerstone shareholder Christopher and Banks Private Equity, an investment vehicle for the Huljich family.
The new funds were used for its $4.5 million acquisition of Run The Red, a bulk text messaging services, whose customers include Sky Network Television, New Zealand Post and its subsidiaries, Vodafone, The Department of Internal Affairs and Facebook.
As at Sept. 30 it had cash and cash equivalents of $5.5 million and no bank debt, which it said was sufficient to "maintain its growth trajectory in the near term".
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