Gentrack mum on contract dispute
Gentrack’s chairman and chief executive are refusing to say when the company became aware a dispute was arising with a customer that prompted its profit downgrade on Friday.
The newly listed software firm had been regarded as one of the safer bets among a stream of technology companies listing on the NZX because of its strong dividends, long track-record and its good visibility of its sales pipeline.
However, Gentrack’s shares dropped 13 per cent on Friday after it announced that its profit for the year to September 30 was expected to come in at $2.5 million to $2.8m, $900,000 to $1.2m lower than it forecast in its May 26 prospectus.
Gentrack attributed the lower forecast in part to a delay on “a major project”. It said it was in dispute with a customer over who should pay to complete the project and it expected the dispute to go to mediation.
Spokesman Aaron Baker would not say whether the project was originally due be completed before or after Gentrack’s share-offer closed on June 20. Gentrack floated on the NZX on June 25.
Chairman John Clifford and chief executive James Docking would not be making further comment, Baker said. All the relevant information was contained in Gentrack’s Friday warning and it was “business as usual now”, he said.
NZX spokeswoman Kate McLaughlin said the exchange’s regulatory arm, NZX Regulation, would consider Gentrack’s Friday announcement “in accordance with its usual process” and did not intend to make further comment.
Gentrack shares opened up 6 cents at $2.30 on the NZX this morning.