Gentrack trims annual earnings guidance on project delays, bad UK debt
By Paul McBeth
July 25 (BusinessDesk) - Gentrack expects annual earnings will fall by as much as 13 percent due to delays in customer projects and bad debt risks in the UK.
The utilities software developer said annual earnings before interest, tax, depreciation and amortisation will probably be $27-$28 million in the 12 months ending Sept. 30, down from $31 million in the prior year. Gentrack had previously predicted annual earnings would be "marginally ahead" of the 2018 result.
"The delays relate primarily to customer resourcing and do not indicate that the projects concerned are at risk," the company said in a statement.
"We note the ongoing dependency on the timing of key contracts and project milestones and confirm that there is a strong pipeline of opportunities in our utilities and airports markets which support our long-term growth objective."
In May, Gentrack reported a 19 percent decline in first-half ebitda to $12.8 million, even as revenue increased 5 percent to $54.4 million. At the time, the company said revenue growth was slowing as it generated more software-as-a-service sales, and as some customer projects were deferred.
The company reported a first-half loss of $8.7 million after writing off the carrying value of airport software developer CA Plus, which it bought in 2017.
As at March 31, Gentrack reported $32.1 million of receivables, of which $18.3 million was from trade debtors and $11.9 million from contract assets. At the time, it provided for $679,000 of impairments and $137,000 for warranty claims.
Gentrack didn't provide a bottom-line profit forecast.
The shares last traded at $5.95, and have gained 18 percent so far this year.