Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Gentrack says sales, profit won't meet prospectus forecasts

Gentrack says sales, profit won't meet forecast of prospectus two months ago

By Suze Metherell

Aug. 1 (BusinessDesk) - Gentrack Group, the airport and utility software company that raised almost $100 million last month selling new and existing shares, won't meet its prospectus forecasts for sales and profit because of a customer dispute and a delayed contract upgrade.

Profit in the 12 months ended Sept. 30 is now expected to be $2.5 million to $2.8 million - as much as 32 percent below the $3.7 million forecast in a prospectus first published on May 26. Sales would be between $38.1 to $38.5 million, missing the prospectus forecast by as much as 6.2 percent, the Auckland-based company said.

The downgrade won't prevent the company from paying dividends of $2.6 million in December and Gentrack's projections for 2015 are unchanged, the company said.

The company cut its forecasts because of "delayed go-live on a major project where a dispute has recently arisen between Gentrack and the customer on the payment for the extra effort required from Gentrack to complete the project, which Gentrack expects to be subject to mediation," it said in a statement. It also reflected "a delay in signing a substantial upgrade contract with an existing customer, which is still expected to be signed by the financial year end."

Gentrack raised $36 million of new capital selling shares at 2.40 apiece in its initial public offering, to repay debt and cover IPO costs. At the same time, existing shareholders including chairman John Clifford and executive director James Docking raised about $63 million selling existing shares. After the sale, existing investors held about 43.2 percent of Gentrack.

Docking was in an analyst briefing and wasn't immediately available for comment and Clifford was currently on a plane to Australia, the company said.

The shares last traded at $2.58 yesterday, giving investors who bought in the IPO a 7.5 percent gain and valuing the company at about $188 million.

Gentrack did flag delays in customer contracts in the risks section of its prospectus. A delay in a major project, after dispute between the company and its client over extra payment had result in mediation, and a hold up in signing a substantial upgrade with an existing customer was behind the drop in profit, it said. In the company's risk section of its prospectus it flags "failure to successfully implement projects" as a risk.

"Gentrack's financial performance may be adversely affected if it fails to implement projects, or experiences delays in the implementation," the prospectus says.

Clifford and executive director James Docking, who has run the Gentrack business since 1995, teamed up to buy Talgentra in 2012. Gentrack has 150 utility and airport customers in 20 countries, and employs 180 people in offices in Auckland, Melbourne and London, according to its statement. Sales in the 12 months ended Sept. 31, 2013, were $40 million, generating a profit of $6.6 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news