Gentrack lifts annual revenue, profit as buying spree pays off

Wednesday 29th November 2017

Gentrack Group, the utilities software developer, lifted annual revenue and net profit as a slew of recent acquisitions drove growth.

Revenue rose 43 percent to $75.2 million in the year to Sept. 30, while net profit lifted to $11.8 million from $9.6 million a year earlier. Underlying earnings before net finance expense, tax, depreciation and amortisation and costs relating to acquisitions was $23.9 million, in line with the upgraded guidance the company gave in September.

The company is targeting ebitda growth of 15 percent or more in 2018 "as it continues to optimise the value from the recent strategic growth acquisitions, a shift to 'productised' offerings, and the expansion of resource expertise to support larger and more profitable projects," it said. It foresees continued growth in 2018 driven by ongoing energy and water market reforms in Australia, the UK and Singapore, and says it will expand its R&D program to deliver against medium and long-term growth strategy.

Gentrack has been on a buying spree in the latest year, with deals to buy UK billing and customer information systems firm Junifer Systems for $74.6 million and European airport software developers Blip Systems and CA Plus for approximately $20.3 million.

"The results follow an intensive year of strategic acquisitions and business integration effort that will enable us to build on the continuous growth since the IPO, and to deliver an increased performance rate across the global utilities and airports businesses," chief executive Ian Black said. "Both businesses experienced 40 percent plus revenue growth over prior year and recurring revenues from annual fees and support services were up 43 percent."

In 2017, Gentrack added 12 new utility and nine new airport customers, launched its first South East Asian utilities office in Singapore, and entered new airport markets in Greenland, Abu Dhabi, Jersey, and Kenya.

Utilities is its biggest business, delivering $63.5 million in revenue and $20.7 million in ebitda in the latest year, while its airports revenue was $11.7 million and ebitda was $3.2 million. One-third of the company's revenue came from Australia, where energy regulatory reform is driving growth, 23 percent from the UK and Europe, and 12 percent from New Zealand.

The company lifted staff numbers 55 percent in the latest year, to 429, with the bulk of those new hires in Europe. It says its expansion of offices in Melbourne and London will "support ongoing resource growth."

The shares last traded at $6.10, and have gained 75 percent this year.

(BusinessDesk)

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