Gentrack releases FY19 financial results

Gentrack Group Limited (NZX/ASX: GTK), a market leader in software solutions for utilities and airports, announces its financial results for the year to 30 September 2019.

Highlights (NZ$)

• Revenue $111.7m: up 7% on FY18
• Recurring Revenue $78.2m: up 22% on FY18
• EBITDA[1] $24.8m: down 20% on FY18
• Adjusted NPAT[2] $9.6m: down 31% on FY18
• NPAT ($3.3m): after $14.6m impairment
• Final Dividend 3.0cps: bringing full year dividend to 8.0cps

Revenue for FY19 was up 7% on prior year to $111.7m and EBITDA was down 20% to $24.8m for the same period.  With a continued transition to SaaS on all new utilities business, recurring revenues were up 22% on FY18 and now account for 70% of total revenue, with non-recurring revenue from project services and licences falling 24%.  Despite challenging market conditions, the UK business achieved 36% revenue growth on FY18 with the addition of four new energy customers, a water utility customer and three new Evolve projects.

Debt provisions of $2.4m mainly relating to UK utilities customers, and continued investment in people and product development have contributed to lower EBITDA.

The full year reported net loss after tax of ($3.3m) reflected the full impairment of CA+ intangibles and goodwill of $14.6m at half year. Adjusted Net Profit After Tax of $9.6m is down 31% from $13.9m in FY18.

A final dividend of 3.0cps has been declared taking the full year dividend to 8.0cps. This represents a total pay-out of $7.9m and 82% of Adjusted NPAT².

Ian Black, CEO said, “It’s been a challenging year for our energy customers with government intervention in pricing reducing margins for energy suppliers in the UK and Australia. Despite this, we have seen many customers leverage our solutions to grow their businesses which has contributed to increases in our Annual Recurring Revenue (ARR) for utilities this year, up 26% on FY18 to $67.9m.

“We have a leading position in the UK energy market with 6.3m meters billed using our solutions (12.1% market share), up 21% on FY18. Large energy suppliers E.on, EDF and Npower commenced billing with Gentrack solutions, providing a platform for continued market share growth in this segment. Our Evolve offering has continued to perform well throughout the year with further success in the UK, adding three of our existing utilities as customers.

Veovo, the airports business, added Mexico City, Luton and Buenos Aires as new customer names in FY19. Our largest ever deployment of the airport operations solution at Orlando Airport also went live in FY19, alongside a major project at Newark Liberty Airport, significantly lifting our position in North America.

Investment in product development has continued throughout FY19 with total R&D spend up 21% on last year to $13.5m, of which $5.1m was capitalised.  Our development program has delivered the Gentrack Cloud solutions for energy and water retail markets as well as delivering new camera tracking technologies for passenger management at airports.

With continuing uncertainty in our core UK market, we anticipate results will be broadly flat in FY20.

All figures are presented in NZ$.

ENDS

[1] EBITDA: Earnings before net finance expense, tax, depreciation and amortisation, acquisition related costs and impairment. This provides a measure of the underlying operating profitability of the business.

[2] Adjusted NPAT – Underlying NPAT before non cash charges related to impairment

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