Gentrack sees earnings at bottom end of guidance after completing second major contract

Friday 7th August 2015

Gentrack Group, whose chief executive James Docking is set to leave the company next year, expects annual earnings to come in at the bottom end of guidance after completing the second of two major contracts that kept a question mark over its forecasts.

The Auckland-based company said earnings before interest, tax, depreciation and amortisation will come in near the bottom of the $13 million to $15 million range it gave for the 12 months ending Sept. 30. Gentrack today signed a "substantial upgrade" to a software contract with an Australian utility, which is expected to be implemented in 2017.

"Following our announcement on 16 July regarding the signing of a large UK water deal, this is the second of the contracts we had expected to sign earlier in the year," chairman John Clifford said. Forecast earnings are "dependent on project delivery to year end and other license transactions under negotiation."

The company released its forecast range for annual earnings last month, after signing a deal with a UK water utility firm, which is expected to be implemented in 2017. When announcing its first-half results in May, two contracts under negotiation were seen as a risk to Gentrack meeting its prospectus forecast for the 2015 full year of $44.7 million revenue and $15.5 million Ebitda.

The company's boss Docking last week said he will end a decade-long tenure in charge next year to allow for a new person to lead Gentrack's next stage of growth. Docking will stay on until the handover is made, and may remain involved in the business in a role that's yet to be agreed on.

The shares rose 1.5 percent to $2.05, and are down 6.1 percent this year.

BusinessDesk.co.nz

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