Gentrack raises first-half profit as airports provide ‘a long runway for growth'
The stock, which is down 2.45% year-to-date, closed on Friday at $11.16 for a $1.38b market cap.
(Shares have to stay above $10 for chief executive Gary Miles to land his full market-leading remuneration).
The first half saw the operational launch of Gentrack's first Saudi Arabian airport and 'the successful completion of an important part of the first phase of our contract with the Manchester Airports Group'.
Upgrades were also delivered to two unnamed major Australasian airports.
Gentrack said Veovo had also 'won London Gatwick's Integrated Airport Control project following a highly competitive process'.
Gatwick already used Veovo for queue management. It would now add AI and machine-learning-based features.
In utilities, Miles earlier told the pick up his firm was well-positioned to pick up work from the latest water reforms after not even being invited to pitch for Three Waters contracts.
In the UK, the first half saw Gentrack win a billing software contract with Utility Warehouse, which it says supplies energy and telecom products to nearly two million meter points. Second-half guidance
Gentrack gave only limited second-half guidance, which revealed potential to come in slightly shy of some of Forsyth Barr's expectations.
An investor presentation said it expected revenue to be at or above $230m (Forsyth Barr is picking $240m).
And it forecast full-year ebitda (earnings before interest, tax, depreciation and amortisation) margin of 'above 12%' versus Forsyth Barr's estimate of 14.3%.
No profit/loss guidance was given. The firm does not pay a dividend.
Ebitda increased by 5% in the first half to $13m.
Net cash increased by 80.1% to $70.7m. Tariffs, green backlash
'Gentrack provides essential services with little direct impact from global tariff uncertainties,' the firm said in a market filing.
'In case of a global downturn, we do not expect the rate of transformation of utility companies to slow. However, passenger travel numbers could slow the rate of airport transformations.'
It added, 'There is some pull back against net-zero targets which could potentially affect change programs for utilities. We do not see this as a current risk in our target utility markets of Europe, the Middle East and Asia.'
In the US, the Trump administration has pushed a policy of what it calls 'energy realism' as it scales down or eliminates clean energy subsidies.
The weakening of the New Zealand and Australian dollars had 'benefited Gentrack due to our global customer base and operating theatres'.
In constant currency terms, Gentrack's net profit was $6.7m or 6.8% lower than the reported $7.2m and revenue 4.2% lower than the reported $112.0m.
Chris Keall is an Auckland-based member of the Herald's business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
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