Gentrack affirms 2015 profit guidance, looking at acquisitions
Gentrack Group, which develops utilities and airports software, affirmed its annual profit guidance and said it is looking at potential acquisitions in its core markets.
Chairman John Clifford told shareholders at their annual meeting in Auckland there was no change in the software developer's strategy or its prospectus guidance for net profit of $9.3 million on revenue of $44.7 million in the year ending Sept. 30. The company will update the forecast when it reports first-half earnings in May. Gentrack is looking at acquisitions to drive "organic growth and deliver shareholder value" and would be open to taking on debt to fund a purchase, he said.
"We are exploring potential attractive acquisition opportunities in our core markets," Clifford said in speech notes published on the NZX. "Gentrack will consider funding such as acquisition with debt of approximately one times Ebitda (earnings before interest, tax, depreciation and amortisation) to enhance shareholder returns."
The company had to downgrade its earnings forecast just five weeks after its initial public offering last year because of slower than expected negotiations over a major contract.
Clifford today said the company has learned from the issue, and has since signed the deal with implementation of the project underway for delivery this financial year and into 2016. Still, "the nature of our business is that we will remain vulnerable to the timing and success of major projects impacting our results from period to period."
Gentrack's board anticipates paying an interim dividend of 4 cents per share as forecast in its prospectus, he said.
The shares rose 2.2 percent to $2.30, and have gained 4.7 percent this year. That's still lower than its $2.40 offer price, which it has traded below since the August profit warning.