Source: Radio New Zealand
Utilities and airport software firm Gentrack’s first half net profit is down 29 percent (file photo). www.123rf.com
Utilities and airport software firm Gentrack’s first half net profit is down 29 percent, though growth in recurring revenue was expected to continue to grow.
The net profit for the six months to March was $5.1 million, with revenue down 1.7 percent to $110.1m, with two unexpected delays in sales of utilities services contributing to the drop.
However, Gentrack chief executive Gary Miles said recurring revenue rose nearly 17 percent to $85.3m, which was expected to continue to grow as AI changed the dynamics of software integration.
“This is definitely a transition that we’re trying to make in a very positive way that’ll affect the dynamics of our revenue,” he said.
“The other thing that’s happening with AI is when you have an out-of-the-box-stack and then you can start to run interoperability with tangential systems, the cost to deploy these systems also goes down.
“So that’s just part of the journey that the industry is on that we think will make a lot of sense for both the industry and for us.”
He said the drop in revenue and bottom line profit was unexpected, with an unforeseen delay in settling two deals.
“The long sales cycles, and two unexpected new client delays, have had an impact on our results this first half, but does not change our confidence in our medium-term growth targets of more than 15 percent compound annual growth.”
However, he said sales of airports software Veovo had been “exceptional” over the first half.
Miles said the company would be investing more in AI, which would drive software development and sales.
Acquisitions
Gentrack also announced it had an agreement to buy New Zealand-based software as a service firm Prospero Energy (trading as Factor) serving the energy retail sector, as part of its utilities division transition to an increasingly distributed energy system.
The latest deal followed last month’s agreement to buy Dubai-based airport technology and services provider Dubai Technology Partners as part of Gentrack’s expanding airport business.
Gentrack also reaffirmed its full year guidance issued on 5 May, but Miles it was too early to provide guidance for FY27.
While the board decided not to pay an Interim dividend, it still intended to undertake a share buyback up to $20m, depending on market conditions.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand