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

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: