US churches going digital boosts NZ's Pushpay

Washington

A DIGITAL payment platform for religious services is New Zealand's top stock this year, propelled by US churches that moved online during the coronavirus pandemic.

Pushpay Holdings has surged 96 per cent to become the best performer on the S&P/NZX 50 Gross Index in 2020.

The Auckland-founded company facilitates cashless donations and hosts live-streamed sermons, a draw for churches dealing with restrictions on in-person gatherings.

The company "is a beneficiary of Covid-19 with its platform enabling churches to stream services more often, translating to higher engagement with the congregation and an uplift in donation volumes", RBC Capital Markets wrote in a Sept 6 note.

Pushpay serves more than 10,500 institutions with a focus on US churches and raises revenue via monthly subscription fees and per-transaction costs.

The company says that if it can meet its target of more than 50 per cent of churches with at least 200 average weekly attendees, its annual revenue would reach more than US$1 billion, compared with about US$130 million in FY2020.

American individuals, bequests, foundations and corporations gave an estimated US$128.17 billion to religious institutions last year, according to a report from the Giving USA Foundation.

The US faith sector is ramping up its use of digital payments as most churches remain shuttered, UBS Group wrote in a Sept 7 note.

The trend could become more permanent amid the ongoing shift away from cash, although there are concerns about "online church fatigue", the broker added.

Pushpay's surge highlights how companies focused on delivering services via technology are benefiting as consumers are restrained by government rules and social distancing measures aimed at curbing the spread of the coronavirus.

Information technology is the top performing sector on the MSCI World Index in 2020.

Company insiders have sold shares amid the surge, among them Pushpay chief executive officer Bruce Gordon who offloaded 1.4 million last month.

Pushpay's largest investor, the Huljich family, sold 25 per cent of its stake shortly after the stock peaked in July. Its shares tumbled 8.4 per cent when the sale was announced.

Pushpay is also listed in Australia. The shares are up 85 per cent in Sydney this year. BLOOMBERG