Christopher Adams

The Business Herald’s markets and banking reporter.

Gentrack downgrade queried

Shares in the company, which were issued in the initial public offering at $2.40, plunged 13 per cent. Photo / Thinkstock
Shares in the company, which were issued in the initial public offering at $2.40, plunged 13 per cent. Photo / Thinkstock

The Financial Markets Authority has contacted newly listed software developer Gentrack to "seek an explanation" on the company's shock profit downgrade last week, says a spokesman for the regulator.

Gentrack, which only went public on June 25, revealed on Friday that profit in the 12 months to September 30 would be in the range of $2.5 million to $2.8 million, down from the $3.7 million forecast in its prospectus.

Shares in the company, which were issued in the initial public offering at $2.40, plunged 13 per cent to close at $2.24 following the announcement on Friday and closed at $2.19 yesterday.

"We contacted Gentrack on Friday to seek an explanation on the matters involved in the profit guidance update," the FMA spokesman said.

"We are now considering the responses received from Gentrack and continuing to engage with them. We have emphasised to Gentrack's management and its advisers the importance of keeping the market fully informed."

He said the regulator had not received any complaints on the Gentrack issue.

"It's not appropriate for us to comment further at this stage."

Gentrack has declined to make any additional comment to media following the downgrade.

"We have nothing to add to, or comments to make regarding the notice on Friday," Gentrack's Aaron Baker said on Monday.

Gentrack's IPO raised $36 million of new capital, which was to be used to cover listing costs and pay off debt, while existing shareholders, including chairman John Clifford and chief executive James Docking, sold $63 million of shares and continue to hold a 43 per cent stake in the company.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf03 at 22 Dec 2014 15:57:17 Processing Time: 32ms