In part, those acquisitions are expected to contribute to a 20% increase in future earnings before interest, tax, depreciation and amortisation (ebitda).Gentrack’s global customers include more than 75 water, gas and electricity utilities companies and more than 85 airports. Its latest new customers are the airports of Greenland and Jersey.
While its airports division revenue declined to $3.3million, because of timing of the beginning of new projects towards the end of first-half trading, its utilities sector gained $6.1million in revenue to $25.6million, from projects in Australia and the UK. Both revenues were up about 28%.
For its six months to March, Gentrack’s revenue rose 24% to $28.9million, ebitda climbed 31% to $8.8million and after-tax profit was up 46% to $5.6million.
Gentrack posted an unchanged 4.2c dividend for the half year. Its shares, which had gained almost 40% in value during the year, dipped 10c to $4.75 following the announcement.
Craigs Investment Partners broker Peter McIntyre predicted the shares would trade down, given there was weaker than expected financial guidance from Gentrack yesterday.
While it was a "strong" result and ahead of guidance, Gentrack’s outlook was weaker than expected, he said.
"Much of the [guidance] miss appears to be due to the timing of revenue recognition from the Junifer acquisition," Mr McIntyre said.
While Gentrack’s management had reiterated expectations of Junifer contributing $7.8million ebitda during calendar 2017, it appeared much of that would be towards the fourth quarter, missing inclusion in Gentrack’s year end in September, Mr McIntyre said.
Gentrack’s chief executive, Ian Black, said the utilities business secured several new software projects in Australia, New Zealand and the UK, which included Pulse Utilities, Vector and Ovo Energy, and also went live with Velocity at Good Energy, all contributing to the strong first-half performance. Utilities revenues achieved a 31% increase and ebitda gained 50%, he said.
Gentrack said it remained confident of long-term growth being driven by reforms in the water and power sectors, in both the UK and Australia, and also from rapid passenger growth at airports across the world.
Including the injection of $65.8million for acquisitions, Gentrack’s cash position stood at $79.2million, but since March it has been hard on the acquisition trail, spending almost $95million on taking ownership or majority stakes in three offshore software service suppliers.
Gentrack had raised $35million from a share issue and drew down $30million from a new $50million banking facility with ASB Bank, to assist with the acquisitions, BusinessDesk reported.
Gentrack acquisitions
In April and May
• $74.6 million Junifer Systems. 100% stake, billing and customer information provider to 25 UK customers, being more than half of the UK’s independent energy suppliers.
• $8.4 million Blip Systems. 79.81% stake (three-year option on balance), 26 airports including the Netherlands’ Schiphol, JFK terminal four, Geneva and Auckland; software for passenger flow, queues and airport capacity forecasting.
• $11.9 million Concessionaire Analyzer +. 75% stake. Six airports, including London City, Antigua, Quito, Malta and Nairobi; software for management, optimisation and concession retail auditing.
• Gentrac employs more than 350 staff in New Zealand, Australia, the United Kingdom and Europe, servicing more than 150 customer sites in 20 countries.
