Investment Matters

Company News

Australian Equities Portfolio

Pushpay (neutral impact) released its 2021 annual report on Monday.

The investor conference that followed was the first opportunity we had to see newly appointed CEO Molly Matthews present.

Pushpay has seen strong growth in processing volumes throughout the pandemic, as church closures necessitated alternative means of giving.

Pleasingly, the company’s operating leverage was on display in its result, with a large percentage of revenue falling through to the bottom line. Consequently, it grew operating profit by an impressive 133% for the year.

Revenue per customer (or church) also grew over the period through cross-selling of its newly acquired Church Community Builder church management software. There was a 70% increase in customers that are subscribed to both services (payments and church management).

The company also detailed its push into the Catholic market, where it sees it can gain a 25% share. This is an important opportunity for future growth.

Pushpay also surprised on guidance, expecting to achieve operating profit growth of 11% next year (at the mid-point).

While most churches have begun to re-open in the US, many remain at below full occupancy.

The extent to which the current strong penetration of digital giving among churches grows or is maintained will be key to the company achieving its forecasts.

We continue to hold Pushpay because it is a technology exposure that generates significant levels of cash, with prospects for growth.


Woolworths (neutral impact) released further details about the demerger of Endeavour Group.

As a reminder, through a corporate restructuring last year Woolworths merged Endeavour Drinks (BWS, Dan Murphys) with ALH Group (owner of hotels and pubs) to form Endeavour Group.

The demerger will see Woolworths’ shareholders issued with a share in Endeavour Group for every Woolworths share.

This will largely see the carving out of Woolworths’ drinks and gaming exposure. However, Woolworths will retain a 15% stake in Endeavour Group. As a result, drinks and gaming will constitute less than 4% of the group’s operating profit.

As part of the demerger, Woolworths will look to return $1.6 – 2billion in capital to shareholders, which will be in the form of a buyback or dividend.

Subject to shareholder approval, Endeavour Group is expected to trade on 24th June.

Clients who would prefer not to own shares in Endeavour Group are encouraged to speak to their Client Strategist.

Shareholders will receive 1 Endeavour Group share, with Woolworths maintaining a 14.6% stake


Source: Woolworths


Boral (positive impact) has received an unsolicited off-market takeover offer from Seven Group Holdings (SGH).

Seven has progressively increased its holding over the past year and a half, and now holds more than 20% of the company.

As such, under takeover provisions, it may only acquire an additional 3% of the company every 6 months. Boral has effectively made the bid to acquire more shares (it is looking to acquire 30% of the company).

A stake of this size would effectively result in control of the company (the ability to block any resolution). This is well within Seven’s playbook and is something we have seen with Boral’s listed peer, Beach Energy.

We also note that the offer price of $6.50 was quite underwhelming, given Boral’s share price at close of $6.50 on the day of the announcement.


Paragon Care (positive impact) announced the successful renegotiation of its banking facilities.

This seemingly has answered questions of whether the company will need to raise additional capital, and saw its shares end the week almost 12% higher.

The renegotiation includes new, more lenient covenants which are “designed to support the future growth of the business” and will enable the company to resume dividends and explore acquisition opportunities.

The company also provided a trading update. Revenue has recovered as elective surgeries have resumed, with Q3 revenue only 3% below the prior year.

We were pleased to see the company’s operating profit recover to $6.4m for the half, bringing the company closer to regaining lost ground.


Australian Fixed Income sub-portfolio

TZNOTES3 (positive impact) were repaid in full, after a recent capital raise conducted by TZ Limited.

The security will no longer appear in client portfolios.

Property sub-portfolio

Garda Property Group (positive impact) announced a positive revaluation of several of its properties.

Revaluations were a result of an independent revision of cap rates across 8 of Garda’s properties spanning its Industrial and Office properties.

This has seen a 21% increase in the net book value (NTA) of its properties. Garda’s NTA now sits at $1.40 per share, relative to its share price of $1.17 – a gap we hope to see closed in line with its listed peers.


The above market commentary represents the views and opinions of First Samuel Pty Ltd. Such market commentary contains information of a general nature only. Such market commentary is not intended to provide a sufficient basis on which to make any investment decision and should not be taken as such. It has not taken into consideration your objectives, needs or financial situation. Before making decisions in relation to any financial product, you should always obtain and read any relevant Product Disclosure Statement or information statement and seek personal financial advice.