PPH - PushPay (Church/donor software.)

[winner69]

https://www.nzherald.co.nz/business/...EJFDGAPX37AL4/

As per Jarden ...60 Cents upside possible on sale or otherwise !!

Let’s hope it does actually does happen then …..sooner the better

[alokdhir]

Let’s hope it does actually does happen then …..sooner the better

R u a holder ? Or just a well wisher mate ?

From IP transfer move also it seems sale will happen ...from SP not crashing even after pretty ordinary next year guidance also it seems something surely going on..

Everyday big crossovers happening on both exchanges also shows some big buyer interest .

Overall I think good chance of sale ...but maybe still few weeks for us to know offer price

[winner69]

R u a holder ? Or just a well wisher mate ?

From IP transfer move also it seems sale will happen ...from SP not crashing even after pretty ordinary next year guidance also it seems something surely going on..

Everyday big crossovers happening on both exchanges also shows some big buyer interest .

Overall I think good chance of sale ...but maybe still few weeks for us to know offer price

Seems somebody asked Molly about this and she said no intention of a Nasdaq listing in foreseeable future

Hmmm

Offer coming soon I hope

[Shareguy]

Craig’s latest note

Keep the faith
PPH delivers FY22 result in line with guidance
Reuters Bloomberg
PPH.NZ PPH NZ
Ticker
PPH
Exchange
NZC
1.30 1.76
Pushpay delivered FY22 underlying EBITDAF of US$62.3m, up 7% on pcp and in the middle of the range provided at its trading update in March, on gross revenue of US$202.8m, up 12% YoY and 3% ahead of consensus although 1% below CIPe. Revenue growth was evenly split between organic growth (+6.5%), largely driven by up-sell, and the acquisition of streaming service Resi Media. Operating cashflow was impressive at US$61.5m.
Revenue guidance in line with expectations
PPH’s FY23 guidance for revenue to grow 10-15% YoY is (at the mid-point) bang in-line with CIPe and consensus, and we believe is achievable. PPH expects growth to be underpinned by steady growth from the core donor management product to the Protestant segment, a cUS$2m YoY increase in revenue from the Catholic segment (off a very low base), and revenue from Resi Media to double (from a full period of ownership and c20% like-for-like organic growth). We believe guidance is achievable, and note in particular the good momentum Pushpay has in the Catholic segment, where it is now an approved software vendor to 45 of the 176 diocese in the US.
Operating margin guidance soft, recovery from FY24?
One of the key uncertainties ahead of the result was the track for margins, and guidance for underlying EBITDA margins to fall c5% to c26% in FY23, from a combination of headcount growth and wage inflation in the tech sector, is well below prior expectations. While this had been directionally signalled at the investor day last September, until now PPH has not been clear as to exactly how low margins would go in the near term. PPH however did indicate that it expects margins to improve from FY24 as Resi Media and the Catholic segment start to generate positive margin.
Maintain Overweight, raise price target to $1.76 (+17%)
Post result we have lifted our revenue estimates from FY24 onwards to better reflect the growth track for Resi, while easing back operating margin estimates, but this is more than offset by a lower tax rate (from transfer of IP to the US, which can then be amortized and create a tax shield) and the fall in the NZ$ vs US$, and overall our TP lifts 17% to $1.76. PPH did not make additional comments on the potential takeover that was first flagged April 26; on p7-8 we discuss that prior transactions suggests a takeover price of $1.80+ per share (+38% from last trade). Keep the faith. Remain Overweight

[Shareguy]

Why was the IP transfer not done years ago given the $7m savings. One could take from that given the recent takeover interest, that it’s been done at the request of a potential suitor. Ready for delisting from NZX and to where who would no.

Craig’s think $1.80 plus…..

[dr_weir]

Why was the IP transfer not done years ago given the $7m savings. One could take from that given the recent takeover interest, that it’s been done at the request of a potential suitor. Ready for delisting from NZX and to where who would no.

Craig’s think $1.80 plus…..

Because there will be a requirement to repay Callaghan R&D grant/IRD R&D loss credits based on moving the IP overseas so the longer they left that, the less they would have to repay.

[Shareguy]

Further from Cip

A takeover could unlock value
On 26 April, PushPay indicated it had received conditional, non-binding expressions of interest from multiple third parties looking to acquire the company. We emphasize there can be no certainty that a transaction will occur, and as a result our analysis of the potential value of PPH to an acquiror is speculative.
That said, we think there is strong strategic merit in a takeover by a US-based PE fund:
We see PPH as being in the sweet spot for US Private Equity in terms of size, valuation, cash generation and geographic focus, and all in a sector where M&A activity has been frequent. Some PE-players with existing exposure to the US faith sector may be able to realise substantial synergies from an acquisition of Pushpay including by leveraging its low cost back end payments network (just as Pushpay has been able to realise material synergies from its acquisition of CCB), migrating existing customers from sun-set products onto Pushpay's next gen platform, or generating sales and marketing efficiencies.
Pushpay is generating prodigious cashflows, with US$61.5m in operating cash flow in FY22, a free cash yield of c6.3% on current market cap, allowing PE acquirers to substantially debt-fund the acquisition and boost return on equity invested.
Pushpay is the dominant payments provider for large Churches, and customers are sticky (90%+ retention rate). This stickiness means it is cheaper to buy than build in most instances (as Pushpay itself has found in the last few years).
Pushpay today is already in essence a US business – 99% of revenues are generated in the US and its corporate headquarters is based in Seattle, with only a back office in Auckland. In 2021 Pushpay appointed a US-based CEO and plans to appoint a US-based CFO, which when complete will see all senior executives based in the US. Pushpay’s existing register is already nearly half US based including major shareholder Sixth Street (with 17%). Pushpay's core IP and tax domicile will also move to the US shortly. Clearly, Pushpay has been positioned to migrate to the US at some point in time. The only questions have been exactly how and when.
We also think a fair offer at the current point in time would be advantageous for public market investors, given:
A takeover where PPH is delisted from the NZX, would be a relatively clean transaction relative to the alternative route for PPH to migrate to the Nasdaq (that is, a capital raising via the Nasdaq concurrent with a move of primary listing, whereby liquidity slowly moves to that exchange, but with some risk the stock would become stuck between two markets).
Following the general rout in tech shares, especially payments, there are good places to reinvest the cash within the sector at present at reasonable valuations

[alokdhir]

When can we expect to hear about TO offers from company ? Just wondering how much time they will need to let markets know some substantial information ?

2-4 weeks ??

[Muse]

When can we expect to hear about TO offers from company ? Just wondering how much time they will need to let markets know some substantial information ?

2-4 weeks ??

no idea

even some of the analysts are grumbling about how little molly is willing to share

company treats its stakeholders a bit like mushrooms

[alokdhir]

no idea

even some of the analysts are grumbling about how little molly is willing to share

company treats its stakeholders a bit like mushrooms

Maybe they working out some real stuff before informing some thing concrete ....But should it take so long to work out real stuff ? Maybe they actually need a formal offer to tell us about ...something binding kind or ....