Gentrack posts good result
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Utility software maker Gentrack has released a pleasing result for the year to 30 September. Revenue increased 9% on the prior year to NZ$42.1m, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 11% to $14.5m.
The company's net profit came in at NZ$9.4m, beating management's forecast for NZ$9.3m, as outlined in the prospectus. That's a particularly impressive – and surprising – result given revenue was $2.6m, or 6%, below the prospectus forecast due to delays signing two large contracts.
A final dividend of NZ 7.2 cents was declared (25% franked, ex date 8 Dec). Non-NZ shareholders will receive an additional NZ 1.27 cents per share in lieu of imputation credits for a current yield of 5.5%.
Management expects revenue to increase 10% in 2016 and will give further guidance at the annual meeting in February. The share price is up 11% since we upgraded the stock in Gentrack cleared for takeoff from 11 Aug 15 (Buy – $1.80) and trades on a price-earnings ratio of 16.
We'll review the company in detail next week and we continue to recommend you BUY.
Note: With several large shareholders, Gentrack's stock is highly illiquid with a wide spread between the bid and offer prices. To ensure you aren't caught overpaying, it's important your purchase orders have a limit price and are not made 'At Market'.
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