Gentrack hit, but predicts better times

Gentrack says the coronavirus crisis is starting to bite its airport and utility customers but it still expects a better second half.

The utility-software company yesterday reported a 7 per cent revenue decline to $50.6 million for the six months ended March 31. Gentrack said this was due to losing some UK customers as several energy-utility companies collapsed or consolidated.

The company, which said Covid-19 had little impact on its first-half results, posted a net loss of $12.8m after impairing $10.7m of goodwill in airport software developer Blip and $1.5m of previously capitalised utility software.

Blip, acquired in April 2017, has been hit hard by the global airport shutdown.

Adjusted for the impairments, the underlying net loss was $1m, adjusted operating cashflow was $8.6m and earnings before interest, tax, depreciation and amortisation (Ebitda) were $4.3m, down 78 per cent.

The share price is now down more than 62 per cent for the year to date.

Gentrack had already forecast a weak result because the energy retail industry in the UK is under pressure as a result of price caps introduced by the British Government last year.

The difficult conditions have already cost Gentrack a number of contracts. However, executive chair John Clifford expects improved earnings and continued positive cashflow in the second half of the year.

“Notwithstanding the impact of the economic downturn, Gentrack expects to deliver a second-half Ebitda result ahead of the first half, and to remain cashflow positive,” he said.