New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>PPH<br>1H21 Interim Result</h2>
<h3>First take</h3>
<ul>
<li><strong>Key takeaway 1</strong>: As expected PPH has raised its guidance for FY21 EBITDAF to US$54m to US$58m (previously US$50m to US$54m set on 18 June 2020) against our current forecast of US$60.8m and a consensus of US$55.1m.</li>
<li><strong>Key takeaway 2</strong>: Outlook: PPH is clearly now focused on gorwing its revenue inorganically given references to ‘assessing further potential strategic acquisitions’ with little commentary on organic front book growth. Some of this weakness will be driven by COVID-19 inaccessibility however this will be disappointing given the front book growth of smaller, less competitive providers in the same period.</li>
<li><strong>Key takeaway 3</strong>: Front book: is 0% on FY20 (10,896 total customers unchanged), although the proportion of M/L churches has increased to 57.1% from 56.0%, suggesting higher than expected churn within smaller church customers and a small number of M/L churches won over the period to offset the difference.</li>
<li><strong>1H21 result</strong>: PPH reported a 1H21 EBITDA of US$26.7m against a prior year of US$9.5m and a Forsyth Barr forecast of US$29.3m</li>
<li><strong>Other</strong>: The PPH board has also approved a four-for-one share split of PPH shares for the 27th November in an effort to enhance liquidity</li>
</ul>
<h3>1H21 Financials</h3>
<ul>
<li>PPH’s Total Operating Revenue for 1H21 was reported at US$85.6m against a prior year of US$56.0m (Forbarr forecast US$95m).</li>
<li>PBT was reported for the period at US$18.8m against the prior year of US$8.5m, significantly lower than our forecast US$26.5m due to higher than expected depreciation and net foreign exchange losses</li>
</ul>
<p>&nbsp;</p>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.2&amp;permmsgid=msg-f:1682374467455694562&amp;th=1758feaa1fe236e2&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ83307q7ajldZHZExGDCxhXWUKxoL0SCe5K8IQg0QUqEM641yPDnLdAvXcfZWxQBIrT4ZPFKYgDbjxSpi_0Q_RTPoNQx33J_hCZLcPuH7ZlVlKu4vMBqjgAkrk&amp;disp=emb" width="413" height="105" class="editor-image img-responsive" data-image-whitelisted=""></figure>
<p><strong>Analysts results call at 11am 4th November</strong></p>
<ul>
<li>11am NZT for 45 minutes</li>
<li>New Zealand: 0800 452 795</li>
<li>Australia: 1800 455 963</li>
<li>Conference ID 10009197</li>
</ul>
<p><strong>Jamie Foulkes</strong><br>Analyst, Equities</p>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1682374467455694562&amp;th=1758feaa1fe236e2&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ_0XOK5I1TpbJedKJdj_og77wrGi3g8UNb9k3Xe8ylg_wUa9rm1NvVngBKHM9Bcpwvd9VYCPOpHQMObmY3ry9ZU_IS9sbGbt9EQR6df_gqq4R1XZqwlWNZVtdQ&amp;disp=emb" class="editor-image img-responsive"></figure>
<p><br>P:+64 4 914 2217 |TF:0800 367 227<br>Level 22, NTT Tower, 157 Lambton Quay, Wellington</p>

PPH 1H21 Interim Result
First take

Key takeaway 1: As expected PPH has raised its guidance for FY21 EBITDAF to US$54m to US$58m (previously US$50m to US$54m set on 18 June 2020) against our current forecast of US$60.8m and a consensus of US$55.1m.
Key takeaway 2: Outlook: PPH is clearly now focused on gorwing its revenue inorganically given references to ‘assessing further potential strategic acquisitions’ with little commentary on organic front book growth. Some of this weakness will be driven by COVID-19 inaccessibility however this will be disappointing given the front book growth of smaller, less competitive providers in the same period.
Key takeaway 3: Front book: is 0% on FY20 (10,896 total customers unchanged), although the proportion of M/L churches has increased to 57.1% from 56.0%, suggesting higher than expected churn within smaller church customers and a small number of M/L churches won over the period to offset the difference.
1H21 result: PPH reported a 1H21 EBITDA of US$26.7m against a prior year of US$9.5m and a Forsyth Barr forecast of US$29.3m
Other: The PPH board has also approved a four-for-one share split of PPH shares for the 27th November in an effort to enhance liquidity

1H21 Financials

PPH’s Total Operating Revenue for 1H21 was reported at US$85.6m against a prior year of US$56.0m (Forbarr forecast US$95m).
PBT was reported for the period at US$18.8m against the prior year of US$8.5m, significantly lower than our forecast US$26.5m due to higher than expected depreciation and net foreign exchange losses

&nbsp;

Analysts results call at 11am 4th November

11am NZT for 45 minutes
New Zealand: 0800 452 795
Australia: 1800 455 963
Conference ID 10009197

Jamie Foulkes Analyst, Equities

 P:+64 4 914 2217 |TF:0800 367 227 Level 22, NTT Tower, 157 Lambton Quay, Wellington

Pushpay Holdings

PPH: 1H21 Interim Result