Gentrack 'deeply regrets' downgrade so soon after listing, 'remains profitable'
By Jonathan Underhill
Aug. 6 (BusinessDesk) - Gentrack Group, whose shares are trading 12 percent below their June initial public offering
price, says it "deeply regrets" cutting its guidance so soon after going public, which resulted from a project delay and
a payment dispute at two large utility customers.
The airport and utility software company's stock surged on their debut on the NZX on June 25 after an IPO in which
shareholders including chairman John Clifford and chief executive James Docking sold $63 million of existing shares
along with $36 million of new capital used to repay debt and IPO costs. The stock held above the issue price until the
company said on Aug. 1 that it would meet prospectus forecasts for sales and profit. The shares traded today at $2.11,
down from an IPO price of $2.40.
While the company immediately briefed analysts, executives avoided public comment until today's statement.
"The Gentrack board deeply regrets the fact that it has to revise its FY14 forecast downwards so soon after listing on
the NZX and ASX," Clifford said in the statement. "Gentrack remains a highly profitable business with excellent software
solutions and a wide utility and airport customer base."
Institutional investors had expressed concern that Gentrack had to amend its guidance so soon after issuing a
prospectus. The company said today that the setbacks only became clear "shortly before the release to the market on 1
August."
In the case of the disputed payment, Gentrack "continues to work with the customer towards a successful system
implementation and fully expects to have an ongoing long-term productive relationship with the customer."
Gentrack is still working on the delayed project with the second customer "in a limited capacity under an existing
contract while the final legal details of a new contract (to reflect the enhanced level of work to be undertaken ) are
being agreed," it said. In both cases the details were commercial sensitive and confidential.
The company doesn't expect to have to drop its forecast dividend of $2.6 million to be paid in December or lower
guidance for 2015 from its prospectus forecast.
(BusinessDesk)