The Gentrack Group Ltd (ASX: GTK) share price has soared 26% today after its HY23 result.
Gentrack is an ASX software share that provides technology for airports and utility companies.
FY23 half-year result
Gentrack revealed an impressive set of numbers for the first six months of FY23 to 31 March 2023, reporting:
- Revenue rose 47.7% to $84.3 million
- EBITDA (EBITDA explained) rose $14.8 million to $16 million
- Statutory net profit after tax (NPAT) improved $13.7 million to $7.9 million
- Cash on the balance sheet improved $14.5 million to $41.9 million
Highlights
The software provider revealed that there was a 51.2% increase of the revenue for the utilities business to $73.9 million for the half, though this included $19.7 million from Bulb and other insolvent customers.
Excluding insolvent customers, utilities underlying revenue growth was 38.7% year on year. That’s promising for the Gentrack share price.
The Veovo airports business saw 26.7% revenue growth to $10.4 million. There was 15% growth of recurring revenue and 57% growth of non-recurring revenue.
Gentrack was pleased that EBITDA and profit improved so much even though it has been investing in sales and marketing to support international expansion, as well as the investment in research and development.
The business decided not to pay an interim dividend because the board believes that the best use of the cash is to keep investing for growth, with both segments having “strong growth potential”.
One of the new energy customers during the half was EnergyAustralia. Gentrack is also winning over water customers.
The outlook for the Gentrack share price is strong
The ASX software share is expanding its international footprint beyond the core markets of the UK, Australia and New Zeland. This year it has opened an office in Singapore.
It’s also actively pursuing opportunities across Europe and the Middle East.
The company is confident about airport growth as airports “globally look to undertake digital transformations.” Pent-up demand is being ‘unleashed’ in modernisation programs.
FY23 revenue is expected to be in the range of between $157 million and $160 million, while EBITDA is predicted to be around $22 million.
FY24 revenue is expected to be in line with FY23, despite the loss of ‘one off’ revenue of around $25 million from insolvent UK customers. The FY24 EBITDA margin target is between 12% to 17%.
I think Gentrack has a very promising future and it’s one of the ASX growth shares I’d want in a growth-focused portfolio, though buying shares last week would have been cheaper.
