Gentrack issues profit warning six weeks after listing

Utility and airport management software developer tells the NZ Stock Exchange a contract dispute is likely to go to arbitration.

New Zealand-based Gentrack Group is likely to post lower financial results than forecast in its June prospectus, it told the NZX today.

Gentrack, which listed  on both the NZX and the Australian Securities Exchange on June 25, says a delayed go-live on a major project is partly to blame. A dispute has recently arisen with the customer over payment for extra effort to complete the project. Gentrack says it expects this to be subject to mediation. 

There has also been a delay in signing a substantial upgrade contract. This is still expected to be inked by the financial year end.

Gentrack says revenue will be NZ$2.1m (5.2%) to NZ$2.5m (6.2%) lower than forecast at NZ$38.5m to NZ$38.1m. Pro forma EBITDA will be NZ$1.5m (10.7%) to NZ$1.9m (13.6%) lower at NZ$12.5m to $12.1m.

Statutory net profit after tax will be NZ$0.9m to NZ$1.2m lower at NZ$2.8m to NZ$2.5m.  

The directors say they do not envisage any change to either the forecast dividend of NZ$2.6m to be paid in December 2014 or the outlook for 2015.

Auckland-based Gentrack develops billing and CRM software called Velocity for energy utilities and water companies and Airport 20/20 for airport clients. It employs 200 in offices in Auckland, Melbourne, Brisbane and London and services more than 150 utility and airport sites in 17 countries.