Wednesday 30th May 2018
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Gentrack Group lifted first-half earnings 80 percent as the utilities software developer benefited from new projects and acquisitions made last year and said it had a strong pipeline of opportunities.
The Auckland-based company posted underlying earnings before interest, tax, depreciation and amortisation of $15.9 million in the six months ended March 31, up from $8.8 million a year earlier and in line with its forecast for ebitda of $15 million to $16 million. Revenue rose 80 percent to $52 million and net profit increased 50 percent to $8.4 million. It said its second-half performance will be broadly in line with the first half.
Gentrack has been expanding its business, with its workforce now totalling 487, up 14 percent over the past six months and 70 percent higher than year-earlier levels. The company last year acquired UK billing and customer information systems firm Junifer Systems for $74.6 million and European airport software developers Blip Systems and CA Plus for about $20.3 million, secured major contracts with two of the UK's 'Big 6' energy suppliers and is working on new projects across its divisions.
"The acquisitions completed in April and May of 2017 (Junifer, Blip, CA+) have contributed to the result and we have made good progress with the integration of these businesses into the group," the company said in a statement. "New projects with utilities and airports in the UK and Europe contributed to organic growth in the period."
The company has more than 200 customers in 36 countries and said it had a "strong pipeline of opportunities in all markets" but noted the timing of key contract wins and project milestones were subject to uncertainty. It said it's actively watching for new markets and geographies.
Its utilities business increased ebitda to $13.2 million in the first half from $7.8 million a year earlier as revenue jumped to $42.2 million from $25.6 million. The company said first-half revenues from the utilities business reflects significant projects in the UK including E.On, Npower and ENGIE, while completed smart meter related projects in Australia and system deployments in Singapore also contributed to the strong result.
Its Veovo airports business lifted ebitda to $2.7 million from $1 million a year earlier and increased revenue to $9.7 million from $3.3 million. The company said strong revenues for Veovo during the period reflected key wins and projects at Belfast International Airport, Greenland Airports, Ports of Jersey, Brisbane Airport, Al Ghurair and Schiphol Airport.
The company said recurring revenues from annual fees and support services surged 89 percent in the first half, while revenues from licences and project services were up 349 percent and 35 percent respectively. Contractually recurring annual fees lifted to 33 percent of total revenue from 28 percent six months earlier.
Gentrack will pay a first-half dividend of 5 cents per share on June 25, up 19 percent on the year-earlier level.
In the second half of the year the company said its priorities include progressing market growth opportunities in the UK/European, Australasian and South East Asian markets, further innovation through its services and solutions which allows customers to provide the lowest cost to serve models and best customer experience, and transforming its business operations to ensure it anticipates and delivers to the needs of customers.
Gentrack said it is investing in its key utility growth markets in the UK, Australia, New Zealand and Singapore to enable it to deliver 'software as a service' projects quicker with lower risk and to increase its mix of recurring revenue.
Its shares last traded at $7.45 and have jumped 62 percent over the past year.
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