Gentrack secures delayed contract, shares rise to month high
By Suze Metherell
Sep. 1 (BusinessDesk) - Gentrack Group, the airport and utility software developer, has resolved the delayed contract upgrade with a customer which, in part, caused it to cut its prospectus full-year profit forecast barely six weeks after the company listed on the NZX. The shares gained.
The contract upgrade, with an unnamed "Australian-based energy utility company" will be signed at the end of this month, the Auckland-based company said in a statement. A month ago today, Gentrack flagged full-year profit could fall as much as 32 percent below its May prospectus because of a delay in a contract upgrade and a pay dispute with another customer.
“We are very pleased that this long-standing customer has chosen to upgrade its existing Gentrack solution and look forward to delivering the latest functionality that Gentrack Velocity software offers,” chief executive James Docking said. It didn't say what effect this would have on its earnings outlook.
At the start of August the company said profit in the 12 months ended Sept. 30 is now expected to be $2.5 million to $2.8 million, 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 company also today announced a new contract for an implementation of its latest utility billing and customer relationship management system with the Water Authority of Fiji, in line with its strategy to build its market position in the Pacific Islands.
Shares of Gentrack rose 2.2 percent to $2.30, its highest since the profit warning, when it was smacked down to below its $2.40 offer price. The stock surged in its NZX debut in late June, and touched a high of $2.71, after an offer which saw 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 listing costs. After the sale, existing investors held about 43.2 percent of Gentrack.