Gentrack driven into the red for year by $14.6M impairment

While its CA+ acquisition has not performed for Gentrack, its Evolve analytics buy appears to be paying off

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NZX-listed utilities and airports software vendor Gentrack Group reported a bottom line loss of $3.3 million in 2019 after taking a $14.6 million impairment.

The impairment related to CA+, the airport software specialist Gentrack acquired in 2017.

Revenue for the year ended 30 September was million was $111.7 million, up 7 per cent on 2018 with recurring revenue up 22 per cent to $78.2 million.

Gentrack is in the process of shifting its customer base to a software as a service model. Recurring revenues now account for 70 per cent of total revenues.

EBITDA of $24.8 million was down 20 per cent year-on-year.

Despite challenging market conditions, Gentrack said its UK business achieved 36 per cent revenue growth on with the addition of four new energy customers, a water utility customer and three new Evolve projects.

Evolve is an analytics software company Gentrack bought in mid-2018 for $44.2 million.

“It’s been a challenging year for our energy customers with government intervention in pricing reducing margins for energy suppliers in the UK and Australia," chief executive Ian Black said.

"Despite this, we have seen many customers leverage our solutions to grow their businesses which has contributed to increases in our annual recurring revenue for utilities this year, up 26% per cent on 2018 to $67.9 million.

Veovo, Gentrack's airports business, added Mexico City, Luton and Buenos Aires as new customers in 2019.

The company's largest ever deployment of the airport operations solution at Orlando Airport also went live in 2019, alongside a major project at Newark Liberty Airport.

R&D spend was also up 21 per cent on 2018 to $13.5 million, of which $5.1 million was capitalised.

However, Gentrack warned that continuing uncertainty in its core UK market, meant results were expected to be broadly flat in 2020.