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

 

Gentrack 'deeply regrets' downgrade so soon after listing

Gentrack 'deeply regrets' downgrade so soon after listing, 'remains profitable'

By Jonathan Underhill

Aug. 6 (BusinessDesk) - Gentrack Group, whose shares are trading 12 percent below their June initial public offering price, says it "deeply regrets" cutting its guidance so soon after going public, which resulted from a project delay and a payment dispute at two large utility customers.

The airport and utility software company's stock surged on their debut on the NZX on June 25 after an IPO in which shareholders including chairman John Clifford and chief executive James Docking sold $63 million of existing shares along with $36 million of new capital used to repay debt and IPO costs. The stock held above the issue price until the company said on Aug. 1 that it would meet prospectus forecasts for sales and profit. The shares traded today at $2.11, down from an IPO price of $2.40.

While the company immediately briefed analysts, executives avoided public comment until today's statement.

"The Gentrack board deeply regrets the fact that it has to revise its FY14 forecast downwards so soon after listing on the NZX and ASX," Clifford said in the statement. "Gentrack remains a highly profitable business with excellent software solutions and a wide utility and airport customer base."

Institutional investors had expressed concern that Gentrack had to amend its guidance so soon after issuing a prospectus. The company said today that the setbacks only became clear "shortly before the release to the market on 1 August."

In the case of the disputed payment, Gentrack "continues to work with the customer towards a successful system implementation and fully expects to have an ongoing long-term productive relationship with the customer."

Gentrack is still working on the delayed project with the second customer "in a limited capacity under an existing contract while the final legal details of a new contract (to reflect the enhanced level of work to be undertaken ) are being agreed," it said. In both cases the details were commercial sensitive and confidential.

The company doesn't expect to have to drop its forecast dividend of $2.6 million to be paid in December or lower guidance for 2015 from its prospectus forecast.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Tornado Aftermath: More Storms Forecast For New Plymouth

Up to 30 homes were damaged Monday night when a tornado roared through a New Plymouth suburb last night , cutting power lines, tearing off roofs, and toppling trees. More>>

ALSO:

Government Investment Rejig: Sustainable Food & Fibre Futures Launched

Growing New Zealand’s food and fibre sectors sustainably and supporting a thriving economy are the hallmarks of a new investment programme announced today by Agriculture Minister Damien O’Connor. More>>

Dump Levy Options: Waste Work Programme Announced

Associate Environment Minister Eugenie Sage has announced a programme of work to take action on New Zealand’s long-neglected waste problems. More>>

ALSO:

Real Estate: Foreign Buyers Ban Passes Third Reading

The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House. More>>

ALSO:

Nine Merger: Fairfax Slashes Value Of NZ Business

Fairfax Media Group more than halved the value of its Kiwi assets, attaching just A$40 million to mastheads that were once the core of a billion dollar investment. More>>

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>

ALSO: