The Gentrack share price is rocketing higher, up 14% in morning trade. We look at the what’s driving ASX investor appetite.
The post Here’s why the Gentrack (ASX:GTK) share price is rocketing 14% higher appeared first on The Motley Fool Australia. –
The Gentrack Group Ltd (ASX: GTK) share price is rocketing higher in morning trade, up 14%.
Below we look at the half year results (through 31 March) for the company, which provides software solutions for utilities and airports across the globe.
What results did Gentrack report?
Gentrack’s share price is surging higher after reporting a 0.7% lift in revenue compared to the first half of the 2020 financial year. Revenue for H1 FY21 came in at $51.0 million.
The company said revenues from its utilities segment rose 6% over the corresponding half year while revenue from its airport segment fell by $22.1 million, impacted by continuing pandemic travel restrictions. Annual recurring revenues increased 5.8%, which Gentrack said reflects “the critical role of our product in our customers’ operations”.
Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) gained 63.2% over the previous corresponding period, to $7 million.
Statutory net profit before taxes (NPAT) showed a loss of $1.1 million.
That means investors won’t see a dividend payment this half. Gentrack said, “In light of the NPAT loss, the Board has decided not to pay an interim dividend and will review the position at the year end.”
The company also noted that, “We continue to have headwinds from prior year customer attrition and supplier failures in the UK. We have however, moved the business back to growth despite this revenue drag.”
Following $5.6 million of net cash generation during the half, Gentrack’s net cash was $22.4 million as of 31 March. That’s up 33.5% from H1 FY20. Gentrack said its year-end cash position “provides scope for additional investment in technology”.
The Gentrack share price also looks to be getting some tailwinds for the companies new guidance.
Looking ahead, Gentrack upgraded its guidance for the full 2021 financial year. In February it estimated full year EBITDA would come in around $5 million with revenues of $100.5 million, in line with FY20.
The updated guidance forecasts that revenue will be “slightly ahead” of its $100.5 million estimate. While EBITDA for FY21 is now expected in the range of $10 million “on the basis that research and development (R&D) costs are expensed”.
Gentrack share price snapshot
Over the past 12 months, Gentrack’s shares have gained 28%. That edges out the 25% gains posted by the All Ordinaries Index (ASX: XAO).
Year-to-date, the Gentrack share price is up 19%, currently trading at $1.75 per share.
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