Gentrack lifts first-half profit 46% as new utility deals spur revenue gains
Gentrack Group, the utilities software developer which has been on a buying spree, lifted first-half profit 46 percent as new utilities contracts spurred an increase in sales, offsetting a more muted period for its airports software business.
Net profit rose to $5.6 million, or 8 cents per share, in the six months ended March 31, from $3.8 million, or 5 cents, a year earlier, the Auckland-based company said in a statement. Revenue advanced 24 percent to $28.9 million and earnings before interest, tax, depreciation and amortisation gained 31 percent to $8.8 million, largely in line with guidance at Gentrack's annual meeting in February. The company expects annual ebitda to rise 20 percent excluding one-off acquisition costs.
A 50 percent boost in earnings from its utility division to $7.9 million, accounting for almost 90 percent of ebitda, drove the gains, and offset a 35 percent drop in earnings from the airport division to $965,000. That was due to several new software projects going live in Australia, New Zealand the UK with utility companies including Pulse Utilities, Vector and Ovo Energy.
"The business completed a busy first half with key utilities and airports projects continuing in Australia and Europe," chairman John Clifford and chief executive Ian Black said in their report. "First half revenues from Gentrack's airport division were down 11 percent due to the timing of new projects which started late in H1 2017."
Gentrack has been beefing up its business in recent months, with deals to buy UK billing and customer information systems firm Junifer Systems for $74.6 million and European airport software developers Blip Systems and CA Plus for approximately $20.3 million.
The company had cash and equivalents of $79.2 million at the March 31 balance date after raising $35 million in a share issue and drawing down $30 million from a new $50 million banking facility with ASB Bank to help acquisitions. Its operating cash flow shrank to $168,000 in the half from $3 million a year earlier.
The board declared an unchanged interim dividend of 4.2 cents per share, paid on June 27 with a June 14 record date.
The shares last traded at $4.85 and have jumped 39 percent so far this year, outpacing the 6.3 percent gain on the S&P/NZX All Index over the same period.