Did You Miss These NZ Stocks In Your Portfolio- PPH, SKT, FBU​?

  • Jul 20, 2020 NZST
  • Team Kalkine
Did You Miss These NZ Stocks In Your Portfolio- PPH, SKT, FBU​?

Summary

  • New Zealand resisted COVID-19 in commendable flair and subsequently, investor confidence remained quite steady amid the global market downturn.
  • Currently, as its market continues to attract foreign investors too, New Zealanders are gearing up to tap opportunities in the investing world, regaining trust in financial markets despite the most volatile trading in recent history.
  • Few NZX stocks continue to show reliance at the back of vital developments in the Company and should be closely watched if one seeks to diversify their investing portfolio- perhaps a must-do in crisis hour.

When the pandemic introduced extreme volatility into financial markets, stock exchanges reacted frivolously with bearish sentiments, panic selling, circuit breakers etc. being a regular jargon. However, things are falling into place and the market seems to be getting back to the game.

For instance, it was a good start for the New Zealand stock exchange (NZX) last week with S&P/NZX50 ending the session in green on the first two days itself. On 13 July 2020, the index witnessed a rise of 0.35% to 11,435. 14 July 2020 followed suit with an increase of 0.52% to 11,494. Meanwhile, S&P/NZX20 rose by 0.45% to 7,611 and 0.67% to 7,662 on the respective days, while S&P/NZX10 encountered an increase of 0.36% to 12,081 and 0.53% to 12,145.

On 17 July 2020, the index rose again by 0.69% to 11,584, S&P/NZX20 rose by 0.78% to 7,720 and S&P/NZX10 was up by 0.77% to 12,241.

The country that will be known as one of the firsts to have impressively combatted a global pandemic, New Zealand has become a market favorite spot. Domestic and international investors have been eying the action-packed NZX as it offers a hoard of lucrative investing options. Even amid ongoing market volatility, right research and investing approach in the exchange may prove to be fruitful additions to investing portfolios and investor pockets.

In this backdrop, we have cherry-picked 3 stocks that should not miss the investor eye owing to the significant updates these companies came up with recently-

Company Name

Stock Price

What Should You Know?

Pushpay Holdings Limited (NZX:PPH)

$ 8.00, 2.4 %

Shareholders associated with Huljich family sold 25 % PPH shares, Impressive growth trajectory

Sky Network Television Limited (NZX:SKT)

$ 0.14, 0.6 %

Revised contract with Optus as SKT treads towards a more IP-focused future, conclusion of Retail Entitlement Offer raising ~ $ 37.4 Mn

Fletcher Building Limited (NZX:FBU)

$ 3.41, 1.4 %

Intends to make early repayment of USD 300 Mn of USPP notes, strong balance sheet

Price as on 17 July 2020

Pushpay Holdings Limited (NZX:PPH) 

  • Award winning company, offers donor management system, including donor tools, finance tools and a custom community app, to the faith sector, NPOs and education providers located largely in the US and other jurisdictions
  • PPH solutions plan to streamline engagement, payments as well as administration

On 13 July 2020, shareholders linked to the Huljich family entered into a block trade agreement with J.P. Morgan Securities Australia Limited and UBS New Zealand Limited and sold 25 % of their shares in the Company. These shareholders are likely to remain the largest PPH shareholders with combined relevant interest in 43.2 million shares. Moreover, Peter Huljich will remain on the Board while Christopher Huljich would continue to be his Alternate Director.

In the past year, PPH demonstrated solid revenue growth, increasing operating margins, EBITDAF growth and operating cash flow upgrades. The Company went on to achieve/ exceed all guidance provided to the market over the year-

  • Total revenue of USD 129.8 Million, 32% growth on pcp
  • PBT of USD 21.7 Million, up a whopping 1,631 %
  • EBITDAF of $ USD 25.1 Million, up 1,506 %
  • Customer count: 10,896, up 42 %
  • Cash and cash equivalents worth USD 7.2 Million, down 48 %
  • 9 million transactions processed over the year, average transaction value over the year worth USD 195 in 19 countries

For the year ending 31 March 2021, EBITDAF is likely to range between USD 50 million and USD 54 million.

Sky Network Television Limited (NZX:SKT) 

  • A leading Kiwi entertainment company, initially an Auckland-based startup that led the way with the first all-digital followed by high definition experience available across the country
  • Serve over 700k customers via Sky, Sky Sport, Neon & Sky Sport Now

Sky is embracing a streaming future. The Company has recently renewed satellite deal with more flexibility. It agreed a revised contract with Optus that delivers satellite capability for the next decade, with the ability to flex transponder capacity taken by the Company over the term of arrangement with corresponding cost savings, and exciting new functionality.

Optus notified that the Sky commitment allows it to proceed with launch of the first of a new breed of software-defined Ku-band satellites, with the new software-defined satellite scheduled to be ready for use in late 2023.

Besides this, the Company concluded a Retail Entitlement Offer last month raising gross proceeds of ~$ 37.4 million. Funds are likely to provide a strong platform for future growth as the Company executes a refreshed strategy.

More recently, the Company intimated that Susan Paterson will conclude her service on the Board in October 2020.

Fletcher Building Limited (NZX:FBU)

  • Company operations span manufacturing, distribution and retail, home building, and major construction and infrastructure projects
  • operates via 6 divisions – Building Products, Distribution, Concrete, Residential and Development, Construction, and Australia
  • major investor in local manufacturing in New Zealand, the only local fully integrated manufacturer of cement left in the country, via Golden Bay Cement business

In June, FBU reported it will to make an early repayment of its most expensive source of debt, USD 300 million of USPP notes that were issued in 2012 and due to mature in 2022 and 2024 (notional value USD 300 million). These have an average cost of funding of 5.4%. Repayment of the notes might shun funding costs by $ 17 million per year, and still leave it with significant liquidity of $ 1.1 billion. Repayment amount to be made by the Company, possibly in late July is likely to be $ 350 million.

Meanwhile, the Company has a strong balance sheet position, with $ 1.5 billion liquidity and a leverage ratio of 0.8x, below the Group’s target range of 1-2x. 

(Note: All currency in NZD unless specified otherwise)                                                    

 

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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