Gentrack 1H profit rises by a third; flags risk to FY profit
Gentrack first-half profit rises by a third; flags risk of not meeting full-year prospectus forecast
By Fiona Rotherham
May 28 (BusinessDesk) - Gentrack, which
develops utilities and airports software, said first-half
profit rose by a third, but warned full-year earnings may
miss its prospectus forecasts because of delays in inking
contracts.
Net profit rose to $3.2 million in the six
months ended March 31, from $2.4 million in the year earlier
period, the Auckland-based company said in a statement.
Revenue increased 3.4 percent to $18.5
million.
Earnings in the first six months of the year
improved following the acquisition of new customers in the
UK, Australia, and New Zealand, including Queenstown
Airport. However the company said annual earnings may not
rise as much as expected as two major contracts that were
expected to be signed by now in the UK and Australia were
still under final negotiation.
“This delay
introduces some risk that Gentrack may not achieve its
prospectus forecast for the 2015 full year of $44.7 million
revenue and $15.5 million Ebitda (earnings before interest,
tax, depreciation and amortisation)," chairman John Clifford
said.
He said the company would update the market when
it had more certainty but if the additional revenue
associated with the two projects under negotiation can’t
be recognised, Gentrack was likely to produce a similar
result to the $13 million in underlying earnings it made in
the 2014 financial year.
Gentrack, which raised $36 million of new capital in an IPO last year, got itself into hot water after releasing a significant profit downgrade just five weeks after its sharemarket listing. The Financial Markets Authority took no action but said the company could have been clearer when flagging certain risks. The profit downgrade followed a dispute between the company and a major customer over extra payment.
Gentrack said it had a
record number of opportunities at the tender and proposal
stage and remains confident about its market position and
growth in new utility customers in the UK and Australia in
the next two to three years.
It will pay a first-half
dividend of 4.1 cents per share on June 18, in line with the
prospectus, as it had a strong cash position of $5.4 million
at the end of March.
Shares in Gentrack last traded at
$2.46, below the IPO price of
$2.40.
(BusinessDesk)