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GTK - GENTRACK HOLDINGS LIMITED


nipper
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Gentrack Group Limited (GTK) has been listed since 2014. From $2, it ran to $6+ in 2018 before retreating. By Covid times, it was under $1.

 

The company is involved in design, development, implementation and support of specialist software solutions for energy utilities, water companies and airports mainly in Australia and New Zealand. Gentrack offers two principal products being Gentrack Velocity and Airport 20/20.

About Gentrack

The global pace of change is accelerating, and utilities need to rebuild for a more sustainable future. Gentrack provides leading utilities across the world with innovative cleantech solutions.

Working with some of the world's biggest energy and water companies, as well as innovative challenger brands, we are helping companies reshape what it means to be a utilities business.

After suspending guidance in 2020, there has been a rebuilding of management and focus. Now $1.88

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  • 5 months later...

and by the end of 2021, up from earlier retacement . Closed at $2.03 near highs for the year.

The AGM update in Nov was generally upbeat:

  • EBITDA of $12.7m, up 5.0% from $12.1m in FY20.
  • Net cash up $9.2m to $26.0m at 30th Sept 2021.
  • Utilities Revenue up 8.8%:
  • Strong NRR growth (up 68% to $18.3m) on successful project deliveries, providing future ARR growth
  • Utilities ARR down 0.3% after absorbing ~$4m customer revenue losses from prior periods
  • Veovo (Airport Business) remains profitable despite industry downturn:
  • ARR is up by 7.7%
  • Operating costs up 5.2% FY21 vs FY20 with investment in people
  • Nil capitalisation of R&D costs.

Outlook: On 30 September 2021 Gentrack Group advised that it anticipated an increase in FY22 group revenues vs FY21. Over the intervening 8 weeks we have seen further turbulence in the UK energy market including the recent special administration of Bulb, a top 5 Gentrack customer. In this context, Gentrack is pleased to reconfirm that FY22 group revenues are expected to be ahead of the FY21 revenues of $105.7m announced today. Gentrack is not providing earnings guidance for FY22. Gentrack has confirmed no changes to the FY24 targets provided on 16th June 2021.

Airports must be holding back on new spend, as well?

 

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  • ShareCafe Admin changed the title to GTK - GENTRACK HOLDINGS LIMITED
  • 2 weeks later...

Naos has a significant position in GTK. Mid December their review, following the numbers that came out, read like this:

Without a doubt the most notable event for the month came from one of our more recent portfolio additions, Gentrack Group, as they released their FY21 results. In our view we believe the result was a significant positive step in reaching, and potentially exceeding, their FY24 targets. In our view, there were three key highlights to the result.

  • Firstly, the number of new business wins in both the utility and airports divisions arguably exceeded management’s expectations and has led to stronger revenue growth in the short term. This is also clear vindication that the GTK software and service offering is highly competitive and has improved significantly in a short period of time under the stewardship of a new management team.
  • Secondly, the working capital management was excellent with few if any bad debts, which has resulted in GTK sitting on a very healthy net cash balance sheet.
  • Finally, disclosure has also improved which has allowed current and potential investors to make more objective and rational decisions about the businesses outlook.

Even though GTK was able to upgrade guidance just a month ago and deliver a result that arguably surpassed this upgraded guidance, the stock price remains at the same level as it was in May 2021, so sentiment remains negative towards the business. We appreciate there remains significant risks associated with an investment in GTK such as the current issues within the UK energy market and associated potential client losses, as well as the headwinds from a tight labour market particularly in technology related roles.

However, we believe these risks are offset by two key points. Firstly, the growth potential that exists in the business which could come from new Tier 1 customer wins, traction in their managed service offering, geographic expansion, M&A or further traction in adjacent industries such as water utilities. These points were not spoken about at length in the FY21 results presentation, yet in our view one or two of them are significant near term opportunities for GTK.

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