The Gentrack Group Ltd (ASX: GTK) share price is in focus after reporting its FY25 half-year result.
Gentrack provides software for both airports and utility companies.
Gentrack FY25 half-year result
Here are some of the highlights from the six months to 31 March 2025:
- Revenue grew by 9.8% to $112 million
- Recurring revenue increased 16.7% to $76.4 million
- EBITDA went up 5.1% to $13 million
- Statutory net profit jumped 34.7% to $7.2 million
What drove the growth?
In the utilities business, total revenue grew by 7.2% to $92.8 million and recurring revenue grew by 17% thanks to wins in previous reporting periods as well as upgrades by clients. This was partially offset by lower non-recurring revenue (down 12%). In the UK, it contracted with Utility Warehouse, which supplies energy and telecom products to nearly two million meter points, to combine Gentrack’s billing software with the multi-service delivery platform. They are one of the fastest-growing retailers in the UK. This is the key division for the Gentrack share price
Veovo (Airport) revenue grew 24% to $19.2 million thanks to customer wins last year in the UK and the Middle East, as well as upgrades in the Asia Pacific region. Recurring revenue increased 14% year on year and non-recurring revenue rose 34%. It achieved major go-lives in Edinburgh with its airport operational suite, the operational launch of its first Saudi Arabian airport and the completion of the first phase of its contract with Manchester Airports Group. Gentrack also won London Gatwick’s Integrated Airport Control project.
Profit commentary
Its EBITDA grew slower than revenue because it’s invested more into its software (which is expensed straightaway), including its first deployment of g2.0 in Genesis Energy. It also increased its spending on sales-related spending to support the “high levels of activity” it’s seeing in its current pipeline.
The increase in the net profit included a $1.1 million share of the losses of Amber Energy. Gentrack owns 10% of Amber Energy. It also benefited from $2.1 million of foreign exchange gains due to a rise of some currencies, particularly Sterling (GBP).
Gentrack also noted its income tax rate was lower mainly due to tax relief received from the vesting of share-based payments in the half-year.
Outlook for the Gentrack share price
For the full-year result, Gentrack is expecting EBITDA to grow faster than revenue. FY25 revenue is expected to be at least $230 million and the EBITDA margin is expected to be above 12%. Gentrack called FY25 as a year of transition as it expands into Asia, the Middle East and Europe.
It’s still confident on its mid-term guidance of growing revenue at a compound annual growth rate (CAGR) of 15% and an EBITDA margin of between 15% to 20% after expensing all development costs.
With the Gentrack share price currently 4% lower than it was yesterday, this could be a good useful time to invest with the business expecting further strong growth.
