October Newsletter
NZX insights, Stock of the month, company update and more

Spring 2020 is here already and while this year has been a mess, the NZ stock market has managed to grow back from the sharp decline in March due to the uncertainties arising from Covid-19. NZX 50 recovered some of the losses from the lowest point on 23 March and saw 38% growth by 30 September, which was pretty encouraging. Some Kiwi businesses' share prices bounced back from the lows with even bigger growth numbers than the index, despite these uncertain times.

Lesson learnt: Although the markets could be volatile, it is important to not panic and keep looking for companies with strong fundamentals and long-term sustainable business models.

Below stock performance graph shows the industries that outperformed NZX 50 during this period. 

Stock of the month: Plexure Group Limited PLX.NZ

What does Plexure do?
Plexure Group Limited (PLX.NZ) is a mobile engagement software company which engages consumers on mobile devices and drive them to store with personalised offers, mobile order and pay and loyalty. Some of its clients include McDonald’s, White Castle (USA), Super Indo (Indonesia) and Loyalty New Zealand. The Company now has over 191 million end users on its platform in 60 countries.

Why is Plexure our Stock of the month?
Since McDonald’s purchased a 9.9% equity stake in Plexure in April 2019, the relationship between the two companies has continued to strengthen. Plexure continues to broaden its scope of offering for the fast food giant including AI enabled fraud detection.COVID-19 has increased the requirement for customers to shop at distance, which has accelerated the adoption of products like Mobile Order and Pay, that Plexure has deployed across 2,700 McDonald’s stores in Japan.

Plexure also announced it’s intention to investigate undertaking an initial public offering (IPO) on the Australian Securities Exchange (ASX). ASX listing would expose the Company to a larger shareholder pool which worked out positively for Xero after delisting from NZX.

Recent stock news
Since the 23 March Covid related share price drop, Plexure’s share price bounced up by 231% from $0.49 to $1.39 on September 30th. 

Financial record
For the year ended 31 March 2020, the Company has achieved the following:
• Revenue increased by 50% ($8.4 million) to $25.3 million from FY19
• Net profit increased by 243% to $1.0 million from the FY19 loss of $0.7 million
• $14.2 million cash on hand at balance date and cashflow positive from operating activities for the third successive year
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