Gentrack Group Limited logo

Annual Results for the Year Ended 30 September 2021

Full Year Results25 November 2021GTKInformation Technology

Gentrack Group Ltd
17 Hargreaves Street, St Marys Bay, Auckland 1011,

PO Box 3288, Auckland 1140, New Zealand

Ph: +64 9 966 6090

Email: info@gentrack.com

www.gentrack.com



Gentrack Group Ltd | ARBN 169 195 751



Results for announcement to the market

Name of issuer Gentrack Group Limited

Reporting Period 12 months to 30 September 2021

Previous Reporting Period 12 months to 30 September 2020

Currency NZD

Amount (000s) Percentage change

Revenue from continuing

operations

$105,723 5.16%

Total Revenue $105,723 5.16%

Net profit/(loss) from

continuing operations

$3,189 N/A

Total net profit/(loss) $3,189 N/A

Interim/Final Dividend

Amount per Quoted Equity

Security

No dividend payable

Imputed amount per

Quoted Equity Security

Not applicable

Record Date Not applicable

Dividend Payment Date Not applicable

Current period Prior comparable period

Net tangible assets per

Quoted Equity Security

$0.099 ($0.019)

A brief explanation of any of

the figures above necessary

to enable the figures to be

understood

For commentary on the results please refer to the market

announcement, financial statements, and investor presentation

attached.

Authority for this announcement

Name of person authorised

to make this announcement

Pip White

Contact person for this

announcement

Pip White

Contact phone number +64 22 0965576

Contact email address philippa.white@gentrack.com

Date of release through

MAP

2

5/11

/2021


Audited financial statements accompany this announcement.

---

Gentrack Group Ltd
17 Hargreaves Street, St Marys Bay Auckland 1011,

PO Box 3288, Auckland 1140, New Zealand

Ph: +64 9 966 6090

Email: info@gentrack.com

www.gentrack.com

Gentrack Group Ltd | ARBN 169 195 751

25

th

November 2021


Market Announcement


Gentrack Group Limited (NZX/ASX: GTK), a leading provider of software solutions for

utilities and airports, today released its results for the full-year to 30 September 2021.


Results Summary


• Revenue: $105.7m – up 5.2% on FY20 and in line with guidance

• EBITDA: slightly ahead of guidance at $12.7m – up 5.0% on FY20

• Statutory NPAT: $3.2m

• Net cash: strong position $26.0m up 54.8% on FY20

• No dividend payable


Revenue growth was driven by an 8.8% increase in the Utilities business to $89.0m

from $81.8m in FY20 with new customer wins and growth from existing customers

offsetting previous years’ losses.


Veovo revenues were down from $18.7m in FY21 to $16.7m due to continued impact

of Covid on the aviation industry, but pleasingly annual recurring revenues (ARR) were

up 7.7% as new customers moved into live operation.


Underlying Group EBITDA of $12.7m is up 5.0% on FY20, slightly ahead of the

guidance issued earlier this year. Costs were up 5.2% vs FY20 driven by increased

investment in personnel, with continued savings in non-personnel costs.


The Group achieved strong net cash generation of $9.2m for the period resulting in

$26.0m net cash at 30 September 2021, up from $16.8m at 30 September 2020.


We continue to deliver against the three strategic growth pillars outlined in our

Strategy Presentation to the market in June – creating a strong customer base, winning

new logos and growing our managed services business.


Our strategic position with our existing customer base continues to strengthen.

Customer status continues to improve with 72% of our customers at a ‘green’ high

performance status.


Over the past 12 months we have won 7 new logos, including 3 new B2B energy

retailers, further strengthening our position as a leading provider of solutions to C&I

retailers.


2

The Managed Services revenues remained generally flat from FY20 to FY21. Since

prioritising Managed Services as a focus area of our strategy, we now have a healthy

pipeline and order book which are setting us up for FY22 and future growth.


Although performing well against our pillars, we continue to experience a drag on

revenue growth, from prior period losses and supplier failures in the UK. The number

of B2C supplier failures in the UK has accelerated in the last 3 months due to the

global energy crisis and Government enforced price cap for the B2C segment – with a

total of 9 customer insolvencies occurring since the beginning of FY21 compared to 6

in total from FY17 through FY20.


This week, Bulb, a Gentrack customer, went into a special form of administration for

larger supplier failures which has not been tested before. We will continue to support

the business as required by the administrator as options for the business are assessed

over the coming months.


We anticipate there may be some further supplier failures in the coming winter months

after which our expectation is that the market will stabilise. We have made allowances

for a reasonable scenario for these additional potential failures.


In general, our revenue is diversified across airports and utilities, with our energy and

water customers active in 6 countries, covering both B2B and B2C.


As a technology first company we continue to accelerate investment in both our

Utilities cleantech capabilities and Veovo, in order to deliver innovation and

profitability for a sustainable era. More customers are turning to Gentrack to deliver

cloud native innovations and understand that Gentrack has the delivery expertise to

roll out these innovations across diverse markets and at scale.


The business’ turnaround continues to progress, and despite the headwinds in the UK

covered above, the organisation is in a strong state, and we are well positioned for

accelerated growth.


Updated guidance


On 30 September 2021, Gentrack Group Limited (NZX/ASX: GTK) (“Gentrack”) advised

that it anticipated an increase in FY22 group revenues vs FY21.


Over the intervening 8 weeks we have seen further turbulence in the UK energy market

including the recent special administration of Bulb, a top 5 Gentrack customer.


In this context, Gentrack is pleased to reconfirm that FY22 group revenues are

expected to be ahead of the FY21 revenues of $105.7m announced today.


Gentrack is not providing earnings guidance for FY22.


Gentrack has confirmed no changes to the FY24 targets provided on 16th June 2021.

---

Gentrack Group Limited
Financial

Statements

For the year ended 30 September 2021


GENTRACK FINANCIAL STATEMENTS / 2






Contents

3 Management Commentary

5 Independent Auditor’s Report

11 Financial Statements

12 Statement of Comprehensive Income

13 Statement of Financial Position

14 Statement of Changes in Equity

15 Statement of Cash Flows

16 Notes to the Financial Statements

47 Corporate Directory

MANAGEMENT COMMENTARY
GENTRACK FINANCIAL STATEMENTS / 3


• Revenue: $105.7m – up 5.2% on FY20 and in line with guidance

• EBITDA: slightly ahead of guidance at $12.7m – up 5.0% on FY20

• Statutory NPAT: $3.2m

• Net cash: strong position $26.0m up 54.8% on FY20

• No dividend payable


Revenue growth was driven by an 8.8%

increase in the Utilities business to $89.0m

from $81.8m in FY20 with new customer

wins and growth from existing customers

offsetting previous years’ losses.


Veovo revenues were down from $18.7m in

FY21 to $16.7m due to continued impact of

Covid on the aviation industry, but

pleasingly annual recurring revenues (ARR)

were up 7.7% as new customers moved into

live operation.


Underlying Group EBITDA of $12.7m is up

5.0% on FY20, slightly ahead of the

guidance issued earlier this year. Costs

were up 5.2% vs FY20 driven by increased

investment in personnel, with continued

savings in non-personnel costs.


The Group achieved strong net cash

generation of $9.2m for the period

resulting in $26.0m net cash at 30

September 2021, up from $16.8m at 30

September 2020.


We continue to deliver against the three

strategic growth pillars outlined in our

Strategy Presentation to the market in June

– creating a strong customer base, winning

new logos and growing our managed

services business.


Our strategic position with our existing

customer base continues to strengthen.

Customer status continues to improve with

72% of our customers at a ‘green’ high

performance status.




Over the past 12 months we have won 7 new

logos, including 3 new B2B energy retailers,

further strengthening our position as a

leading provider of solutions to C&I retailers.


The Managed Services revenues remained

generally flat from FY20 to FY21. Since

prioritising Managed Services as a focus area

of our strategy, we now have a healthy

pipeline and order book which are setting us

up for FY22 and future growth.


Although performing well against our pillars,

we continue to experience a drag on

revenue growth, from prior period losses

and supplier failures in the UK. The number

of B2C supplier failures in the UK has

accelerated in the last 3 months due to the

global energy crisis and Government

enforced price cap for the B2C segment –

with a total of 9 customer insolvencies

occurring since the beginning of FY21

compared to 6 in total from FY17 through

FY20.


This week, Bulb, a Gentrack customer, went

into a special form of administration for

larger supplier failures which has not been

tested before. We will continue to support

the business as required by the administrator

as options for the business are assessed over

the coming months.


We anticipate there may be some further

supplier failures in the coming winter months

after which our expectation is that the market

will stabilise.


GENTRACK FINANCIAL STATEMENTS / 4

AUDITORS REPORT






We have made allowances for a reasonable

scenario for these additional potential

failures.


In general, our revenue is diversified across

airports and utilities, with our energy and

water customers active in 6 countries,

covering both B2B and B2C.


As a technology first company we continue

to accelerate investment in both our

Utilities cleantech capabilities and Veovo, in

order to deliver innovation and profitability

for a sustainable era. More customers are

turning to Gentrack to deliver cloud native

innovations and understand that Gentrack

has the delivery expertise to roll out these

innovations across diverse markets and at

scale.


The business’ turnaround continues to

progress, and despite the headwinds in the

UK covered above, the organisation is in a

strong state, and we are well positioned for

accelerated growth.




GENTRACK FINANCIAL STATEMENTS / 5

AUDITORS REPORT

We have fulfilled

DIRECTORS RESPONSIBILITY STATEMENT
GENTRACK FINANCIAL STATEMENTS / 6

DIRECTORS RESPONSIBILITY STATEMENT
GENTRACK FINANCIAL STATEMENTS / 7

DIRECTORS RESPONSIBILITY STATEMENT
GENTRACK FINANCIAL STATEMENTS / 8

DIRECTORS RESPONSIBILITY STATEMENT
GENTRACK FINANCIAL STATEMENTS / 9

DIRECTORS RESPONSIBILITY STATEMENT
GENTRACK FINANCIAL STATEMENTS / 10


The Directors are required to prepare financial statements for each financial year that present fairly the financial

position of Gentrack Group and its operations and cash flows for that period.

The Directors consider these financial statements have been prepared using accounting policies suitable to Gentrack

Group’s circumstances, which have been consistently applied and supported by reasonable judgements and

estimates, and that all relevant financial reporting and accounting standards have been followed.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy, at any

time, the financial position of Gentrack Group and to enable them to ensure that the financial statements comply with

the Companies Act 1993. They are also responsible for safeguarding the assets of Gentrack Group and hence for

taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Directors of Gentrack Group authorised these financial statements for issue on 25 November 2021.

For and on behalf of the Board of Directors:



Andy Green Fiona Oliver

Chairman

Date: 25 November 2021


Director

Date: 25 November 2021





GENTRACK FINANCIAL STATEMENTS / 11

Financial

Statements

30 September

2021

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 12



2021 2020


SECTION NZ$000 NZ$000

Revenue

3.2,3.3

105,723 100,533

Expenditure

3.4

(92,996) (88,440)

Profit before depreciation, amortisation, acquisition related costs,

revaluation of financial liabilities, impairment of goodwill and

intangible assets, financing and tax

12,727 12,093

Depreciation and amortisation

3.5

(10,864) (12,354)

Revaluation of acquisition related financial liability


- 891

Impairment of goodwill and intangible assets

5.3

- (34,511)

Profit/(Loss) before financing and tax 1,863 (33,881)

Net finance income/(expense)

3.6

3,701 (386)

Profit/(Loss) before tax 5,564 (34,267)

Income tax (expense)/benefit

7.1

(2,375) 2,561

Profit/(Loss) attributable to the shareholders of the company 3,189 (31,706)

OTHER COMPREHENSIVE INCOME




Excess income tax benefit on share-based payments


91 -

Translation of international subsidiaries (4,992) (882)

Total comprehensive loss for the period (1,712) (32,588)

EARNINGS PER SHARE / (LOSS) ATTRIBUTABLE TO THE

SHAREHOLDERS OF THE COMPANY

(EXPRESSED IN DOLLARS PER SHARE)




Basic earnings per share

6.4

$0.03 ($0.32)

Diluted earnings per share

6.4

$0.03 ($0.32)

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES ISSUED


Basic

6.4

98,761 98,645

Diluted

6.4

103,128 100,053

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.


STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2021


GENTRACK FINANCIAL STATEMENTS / 13



2021 2020


SECTION

NZ$000 NZ$000

CURRENT ASSETS




Cash and cash equivalents

4.3

25,957 19,321

Trade and other receivables

5.1

21,746 18,951

Income tax receivable


68 151

Inventory

5.8

362 464

Total current assets


48,133 38,887

NON-CURRENT ASSETS




Property, plant and equipment

5.5

2,683 2,763

Lease assets

9.1

8,162 10,338

Goodwill

5.2

106,766 106,599

Intangibles

5.4

37,698 45,428

Deferred tax assets

7.2

5,391 4,649

Total non-current assets


160,700 169,777

Total assets


208,833 208,664

CURRENT LIABILITIES




Bank loans

4.2

- 2,536

Trade payables and accruals

5.6

4,513 3,905

Lease liabilities

9.1

1,376 2,692

Contract liabilities


12,695 12,419

GST payable


1,931 3,206

Employee entitlements

5.7

9,535 5,552

Income tax payable


1,322 -

Total current liabilities


31,372 30,310

NON-CURRENT LIABILITIES




Lease liabilities

9.1

11,176 12,435

Employee entitlements

5.7

539 428

Deferred tax liabilities

7.2

3,305 4,997

Total non-current liabilities


15,020 17,860

Total liabilities


46,392 48,170

Net assets


162,441 160,494

EQUITY




Share capital

6.1

191,699 191,229

Share based payment reserve


3,888 699

Foreign currency translation reserve


1,790 6,782

Retained earnings


(34,936) (38,216)

Total equity


162,441 160,494

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

For and on behalf of the Board who authorised these financial statements for issue on 25 November 2021.


Andy Green Fiona Oliver

Chair Director

Date: 25 November 2021 Date: 25 November 2021

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021


GENTRACK FINANCIAL STATEMENTS / 14


2021


SHARE

CAPITAL

SHARE

BASED

PAYMENT

RESERVE

RETAINED

EARNINGS

TRANSLATION

RESERVE

TOTAL

EQUITY

NZ$000

SECTION

Balance as at 1 October


191,229 699 (38,216) 6,782 160,494

Profit attributable to the

shareholders of the company




- - 3,189 - 3,189

Other comprehensive income/(loss) - - 91 (4,992) (4,901)

Total comprehensive

income/(loss) for the period,

net of tax




- - 3,280 (4,992) (1,712)

TRANSACTION WITH OWNERS



Issue of share capital

6.1, 6.2

470 (413) 57

Share-based payments

6.2

- 3,602 - - 3,602

Balance at 30 September


191,699 3,888 (34,936) 1,790 162,441



2020


SHARE

CAPITAL

SHARE

BASED

PAYMENT

RESERVE

RETAINED

EARNINGS

TRANSLATION

RESERVE

TOTAL

EQUITY

NZ$000

SECTION

Balance as at 1 October


191,229 389 (1,673) 7,664 197,609

Change in accounting policy


- -

(1,833) - (1,833)

Restated total equity at 1

October


191,229 389 (3,506) 7,664 195,776

Loss attributable to the

shareholders of the company




- - (31,706) - (31,706)

Other comprehensive loss


- - - (882) (882)

Total comprehensive income

for the period, net of tax



- - (31,706) (882) (32,588)

TRANSACTION WITH OWNERS


Dividend paid

6.3

- - (3,004) - (3,004)

Share-based payments

6.2

- 310 - - 310

Balance at 30 September


191,229 699 (38,216) 6,782 160,494


The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 15



2021 2020


SECTION

NZ$000 NZ$000

CASH FLOWS FROM OPERATING ACTIVITIES




Receipts from customers


103,251 110,731

Payments to suppliers and employees


(85,957) (83,547)

Lease liability finance charge

9.1

(814) (931)

Income tax paid


(3,535) (4,287)

Net cash inflow from operating activities


12,945 21,966

CASH FLOWS FROM INVESTING ACTIVITIES




Acquisition of property, plant and equipment

5.5

(663) (324)

Purchase of intangible assets

5.4

- (331)

Payment of acquisition related option


- (2,419)

Net cash outflow from investing activities


(663) (3,074)

CASH FLOWS FROM FINANCING ACTIVITIES




Payments for lease liabilities


(2,678) (2,497)

Drawdown of borrowings


- 5,007

Repayment of borrowings


(2,564) (6,871)

Interest paid


(176) (375)

Dividends paid

6.3

- (3,004)

Net cash outflow from financing activities


(5,418) (7,740)

Net increase in cash held


6,864 11,152

Foreign currency translation adjustment


(228) (457)

Cash at beginning of the financial period


19,321 8,626

Closing cash and cash equivalents 25,957 19,321

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 16




GENERAL INFORMATION ACCOUNTING POLICES CRITICAL JUDGEMENTS

GENERAL INFORMATION

The notes are consolidated into nine sections. Each section contains an introduction and general

information which is indicated by the symbol above. The layout of these financial statements has been

streamlined to present them in a way that is more intuitive for readers to follow. This is achieved by laying

out the accounting policies and critical judgements alongside the notes and focusing information in a way

which provides increased clarity and ease of understanding.

The first section details general information about Gentrack Group and guidance on how to navigate through the

financial statements.

ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out

throughout the document where they are applicable. These policies have been consistently applied to

all the years presented, unless otherwise stated. Certain comparatives have been updated to ensure

consistency with current year presentation.

Accounting policies are identified by this symbol above.

CRITICAL JUDGEMENTS

The preparation of the financial statements requires management to make judgements,

estimates and assumptions that affect the reported amounts in the financial statements.

Management continually evaluates its judgements and estimates in relation to assets, liabilities,

contingent liabilities, revenue, and expenses. Management bases its judgements and estimates on historical

experience and on various other factors it believes to be reasonable under the circumstances, the result of

which form the basis of the carrying values for assets and liabilities that are not readily apparent from other

sources. Actual results may differ from these estimates under different assumptions and conditions and may

materially affect financial results or the financial position reported in future periods.

Further details of the nature of these critical judgements and estimates may be found throughout the financial

statements as they are applicable and are identified by this symbol.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 17

1. GENERAL INFORMATION

Gentrack Group Limited is a limited liability company, domiciled and incorporated in New Zealand and registered

under the New Zealand Companies Act 1993. The registered office of the Company is 17 Hargreaves Street, St Marys

Bay, Auckland 1011, New Zealand.

The financial statements presented are for Gentrack Group Limited and its subsidiaries (Gentrack Group) for the year

ended 30 September 2021. Prior year comparatives are for the year ended 30 September 2020.

The financial statements of Gentrack Group for the year ended 30 September 2021 were authorised for issue in

accordance with a resolution of the directors on 25 November 2021.

Gentrack Group’s principal activity is the development, integration, and support of enterprise billing and customer

management software solutions for the utility (energy and water) and airport industries.

COVID-19 PANDEMIC

At 30 September 2021, the financial impact of COVID-19 on Gentrack Group overall has not been material. COVID-19

has not adversely impacted Gentrack Group’s Utility business, however the Airport business has been impacted by

COVID-19 with project cancellations and delays because of the uncertainty caused by COVID-19. Gentrack Group

continues to closely monitor the longer-term financial and economic implications of COVID-19 on its operations.

In preparing these financial statements Gentrack Group has considered the increased level of uncertainty resulting

from COVID-19 in applying its accounting estimates and judgements, details of the significant judgements and

estimates are provided below:

Accounting estimate and judgement area Reference

License and project service revenue - Stage of completion Section 3.2

Recoverability of trade receivables Section 5.1

Impairment testing – Five-year cashflow forecasts Section 5.3


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 18

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

This section outlines the legislation and accounting standards which have been followed in the preparation of

the financial statements along with explaining how the information has been consolidated and presented.

2.1 KEY LEGISLATION AND ACCOUNTING STANDARDS

The financial statements of Gentrack Group have been prepared in accordance with New Zealand Generally

Accepted Accounting Practice (NZ GAAP). They comply with the New Zealand Equivalents to International Financial

Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards as appropriate to profit-oriented

entities. The financial statements comply with International Financial Reporting Standards (IFRS).

Gentrack Group is an FMC entity for the purposes of the Financial Reporting Act 2013 and Financial Markets Conduct

Act 2013 and is listed on the New Zealand Stock Exchange (NZX) and the Australian Securities Exchange (ASX).

The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act

2013, Financial Markets Conduct Act 2013 and the Companies Act 1993.

2.2 BASIS OF CONSOLIDATION

Subsidiaries are entities over which Gentrack Group has control. Gentrack Group controls an entity when it is exposed

to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power

over the entity. In assessing control, potential voting rights that currently are exercisable are considered. Subsidiaries

are fully consolidated from the date that control is transferred to Gentrack Group. They are deconsolidated from the

date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted

by Gentrack Group.

Intra-group balances and any unrealised income and expenses arising from intra-group transactions, are fully

eliminated in preparing the financial statements.

FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the financial statements of each of Gentrack Group’s entities are measured using the currency of the

primary economic environment in which the entity operates (the functional currency). The financial statements are

presented in New Zealand dollars (NZD) which is Gentrack Group’s presentation currency. All financial information

has been presented rounded to the nearest thousand dollars ($000) in the financial statements.

TRANSACTIONS AND BALANCES

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and

from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies

are recognised in the statement of comprehensive income. Foreign exchange gains and losses are presented in the

statement of comprehensive income within net finance expense.

FOREIGN CURRENCY TRANSLATION RESERVE (FCTR)

Gentrack Group translates the results of its foreign operations from their functional currencies to the presentation

currency using the closing exchange rate at balance date for assets and liabilities and the average monthly exchange

rates for income and expenses. The difference arising from the translation of the statement of financial position at the

closing rates and the statement of comprehensive income at the average rates is recorded within the foreign currency

translation reserve within the statement of changes in equity.

2.3 BUSINESS COMBINATIONS

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on

which control is transferred to Gentrack Group. Control is the exposure or right to variable returns from involvement with

the entity and the ability to affect those returns through power over the entity.

Gentrack Group recognises the fair value of all identifiable assets, liabilities, and contingent liabilities of the acquired

business. Goodwill is measured as the excess cost of the acquisition over the recognised assets and liabilities. When

the excess is negative (negative goodwill), the amount is recognised immediately in the statement of comprehensive

income.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 19

2.3 BUSINESS COMBINATIONS (CONTINUED)

Gentrack Group applies the anticipated acquisition method where it has the right and the obligation to purchase any

remaining non-controlling interest (so-called put/call arrangements). Under the anticipated acquisition method, the

interests of the non-controlling shareholder are derecognised when Gentrack Group’s liability relating to the purchase of

its shares is recognised. The recognition of the financial liability implies that the interests subject to the purchase are

deemed to have been acquired already. Therefore, the corresponding interests are presented as already owned by

Gentrack Group even though legally they are still non-controlling interests. The initial measurement of the fair value of the

financial liability recognised by Gentrack Group forms part of the consideration for the acquisition.

Gentrack Group has not made any acquisitions during the year ended 30 September 2021 or 2020. For details of

acquisitions made in prior years refer to the 2018 Annual Report.

2.4 GROUP INFORMATION

The financial statements include the following subsidiaries:

ENTITY PRINCIPAL ACTIVITY

COUNTRY OF

INCORPORATION

SHAREHOLDING

2021

SHAREHOLDING

2020

Gentrack Group Australia Pty

Limited

Holding company Australia 100% 100%

Gentrack Pty Limited

Software sales and

support

Australia 100% 100%

Veovo Holdings (Denmark) ApS Holding company Denmark 100% 100%

Veovo A/S (formally Blip Systems

A/S)

Software development

sales and support

Denmark 100% 100%

CA Plus Limited

Software development

sales and support

Malta 100% 100%

Veovo Group Limited Holding company New Zealand 100% 100%

Gentrack Limited

Software development

sales and support

New Zealand 100% 100%

Gentrack Holdings (UK) Limited Holding company United Kingdom 100% 100%

Gentrack UK Limited

Software development

sales and support

United Kingdom 100% 100%

Junifer Systems Limited Dormant United Kingdom 100% 100%

Evolve Parent Limited Holding company United Kingdom 100% 100%

Evolve Analytics Limited Dormant United Kingdom 100% 100%

Gentrack (Singapore) Pte Limited

Software sales and

support

Singapore 100% 100%

Veovo Inc

Software sales and

support

USA 100% 100%

Veovo NZ Limited

Software sales and

support

New Zealand 100% 100%

Veovo UK Limited

Software sales and

support

United Kingdom 100% 100%

Veovo IP Limited Software Development New Zealand 100% 100%

2.5 IMPACT OF STANDARDS ISSUED BUT NOT YET ADOPTED

The International Accounting Standards Board has issued IFRS 17 Insurance Contracts, as well as amendments to

existing international accounting standards. Gentrack Group will adopt IFRS 17 when mandatory and does not expect

IFRS 17 to have any impact on its financial statements.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 20

3. GROUP PERFORMANCE

This section outlines further details of Gentrack Group’s financial performance by building on the information

presented in the statement of comprehensive income.


3.1 OPERATING SEGMENTS

An operating segment is a component of an entity that engages in business activities from which it may earn revenue

and incur expenses, whose operating results are regularly reviewed by the entity’s Chief Operating Decision Maker to

make decisions about resources to be allocated to the segment and assess its performance, and for which discrete

financial information is available. Operating segments are aggregated for disclosure purposes where they have

similar products and services, production processes, customers, distribution methods and regulatory environments.

Gentrack Group currently operates in two business segments, utility billing software and airport

management software. Consistent with prior years, Gentrack Group’s corporate costs are included in the

Utility segment. These segments have been determined based on the reports reviewed by the Board (Chief

Operating Decision Maker) to make strategic decisions.

The assets and liabilities of Gentrack Group are reported to and reviewed by the Chief Operating Decision Maker in

total and are not allocated by business segment. Therefore, operating segment assets and liabilities are not

disclosed.

2021 UTILITY AIRPORT TOTAL


NZ$000 NZ$000 NZ$000

TIMING OF REVENUE RECOGNITION

Point in time 10,973 1,636 12,609

Over time 77,982 15,132 93,114

Total revenue 88,955 16,768 105,723

Expenditure (79,604) (13,392) (92,996)

Segment contribution (1) 9,351 3,376 12,727


2020 UTILITY AIRPORT TOTAL


NZ$000 NZ$000 NZ$000

TIMING OF REVENUE RECOGNITION


Point in time 7,379 2,018 9,397

Over time 74,397 16,739 91,136

Total revenue 81,776 18,757 100,533

Expenditure (71,565) (16,875) (88,440)

Segment contribution (1) 10,211 1,882 12,093

(1) Segment contribution is defined as Profit before depreciation, amortisation, revaluation of financial liabilities,

impairment of goodwill and intangible assets, financing, and tax.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 21

3.1 OPERATING SEGMENTS (CONTINUED)

A reconciliation of segment contribution to profit attributable to the shareholders of the company is as follows:


2021 2020


NZ$000 NZ$000

Segment contribution (1)


12,727 12,093

Depreciation and amortisation


(10,864) (12,354)

Revaluation of acquisition related financial liabilities


- 891

Impairment of goodwill and intangible assets


- (34,511)

Net finance income/(expense)


3,701 (386)

Income tax (expense)/benefit (2,375) 2,561

Profit/(Loss) attributable to the shareholders of the company 3,189 (31,706)



2021 2020


NZ$000 NZ$000

REVENUE BY DOMICILE OF ENTITY




Australia


25,359 22,659

New Zealand


13,467 16,447

United Kingdom


60,302 55,458

Rest of World 6,595 5,969

Total revenue 105,723 100,533

REVENUE BY DOMICILE OF CUSTOMER




Australia


27,509 25,755

New Zealand


8,696 8,456

United Kingdom


57,382 52,746

Rest of World 12,136 13,576

Total revenue 105,723 100,533

In 2021 and 2020, no single customer including their subsidiaries accounted for 10% or more of Gentrack Group’s

revenue.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 22

3.2 OPERATING REVENUE

Gentrack Group recognises revenue from customers when the performance obligation has been

accomplished. A performance obligation is accomplished when the customer has received all the benefits

promised under the performance obligations and payment is generally due within 30 to 60 days from

invoices being raised. The following sections detail the type of revenue recognised within each category.

Revenue recognition of license and project services is recognised based on the stage of completion which

requires judgement to be applied. This process uses estimations of time required to complete the project

and is based on detailed information on hours worked to date, prior experience, and project scheduling

tools. Gentrack Group employs project managers to provide regular information to management on the

progress of all projects. All estimates are reviewed by management prior to revenue recognition.

ANNUAL FEES

Annual fees include software support and maintenance charged on software licenses, software subscriptions and

managed services. Revenue from annual fees is generally recognised over the period as the benefits are consumed

by the customer.

SUPPORT SERVICES

Support services are post implementation value-add professional services related to ongoing upgrades, minor

software revisions and extended support. Support services revenue is recognised when the service is complete or on

a stage of completion basis.

LICENSES

Revenue from license fees is recognised when the customer can benefit from the licensed software. License fees that

are highly interrelated with project services are recognised based on a stage of completion of the project.

PROJECT SERVICES

Revenue from project services is recognised based on the stage of completion of the project. This is typically in

accordance with the achievement of contract milestones and/or hours expended and forecast hours to complete the

project.

OTHER

Other revenue is primarily revenue from hardware and the recharge of ad-hoc costs that are recharged to customers.

Revenue from hardware sales is recognised when the hardware has been delivered to the customer.


2021 2020


SECTION NZ$000 NZ$000

OPERATING REVENUE:




Annual fees


57,787 60,394

Support services


20,977 20,636

Project services


18,727 13,286

Licenses


2,758 2,177

Other 4,771 2,070

Total operating revenue 105,020 98,563

OTHER INCOME:




Government grants

3.3

703 1,970

Total revenue 105,723 100,533


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 23

3.3 OTHER INCOME

GOVERNMENT GRANTS

Government grants are recognised at their fair value where there is a reasonable assurance that the grant

will be received, and Gentrack Group will comply with all attached conditions. When a grant relates to an

expense item, it is recognised as income over the period necessary to match the grant on a systematic

basis to the costs that it is intended to compensate.

During 2021, Gentrack Group recognised a total of $0.7m (2020: $2.0m) of grants from Callaghan Innovation in

New Zealand. This government grant provided a percentage return for eligible Research and Development

conducted by Gentrack Group. At balance date, there are no amounts outstanding in relation to the Callaghan

Grant. Effective from 1 April 2021 for Gentrack Group the Callaghan Grant has been replaced by the Research and

Development Tax Incentive (RDTI) where a tax incentive is provided for eligible Research and Development

conducted by Gentrack Group.

The RDTI and the Research and Development Expenditure Credit (RDEC) in the UK are tax incentives and the

benefit of these tax incentives are applied to Gentrack Group’s income tax payable when the income tax returns for

30 September 2021 are filed.

3.4. EXPENDITURE

The table below provides a detailed breakdown of the total expenditure presented in the statement of

comprehensive income.


2021 2020


NZ$000 NZ$000

PROFIT / (LOSS) BEFORE TAX INCLUDES THE FOLLOWING SPECIFIC

EXPENSES:


Employee entitlements


70,296 65,780

Administrative costs


3,862 6,721

Third party customer-related costs


5,438 6,450

Advertising and marketing


1,191 898

Consulting and subcontracting


9,353 5,754

Other operating expenses 2,856 2,837

Total expenditure 92,996 88,440

Included in the total expenditure above, Gentrack Group has expensed $12.7m in Research and Development

expenditure (2020: $15.7m). This Research and Development expenditure includes payroll costs, employee benefits

and other employee related costs, direct overheads, and other directly attributable costs related to performing

Research and Development activities.

.


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 24

3.5 DEPRECIATION AND AMORTISATION

Depreciation on assets is calculated using the straight-line method to allocate the difference between their

original costs and their residual values over their estimated useful lives.

Except for goodwill and brands, intangible assets are amortised on a straight-line basis in the statement of

comprehensive income over their estimated useful lives, from the date that they are available for use.


2021 2020


NZ$000 NZ$000

Depreciation


3,084 3,289

Amortisation 7,780 9,065

Total depreciation and amortisation 10,864 12,354


3.6. NET FINANCE EXPENSES

Finance income comprises interest income and foreign currency gains that are recognised in the statement of

comprehensive income. Interest income is recognised as it accrues, using the effective interest method.

Finance expense comprises interest expense on borrowings, lease liability finance charges, foreign

currency losses and impairment losses recognised on the financial assets (except for trade receivables) that are

recognised in the statement of comprehensive income. All borrowing costs are recognised in the statement of

comprehensive income using the effective interest method.


2021 2020


SECTION NZ$000 NZ$000

FINANCE INCOME

Interest income 26 7


26 7

FINANCE EXPENSE




Interest expense


(203) (383)

Lease liability finance charges

9.1

(814) (931)

Interest paid - NPV discount


- (7)

Foreign exchange gains 4,692 928


3,675 (393)


Net finance income/(expense) 3,701 (386)


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 25

4. CASH, BORROWINGS AND CASH FLOWS

This section outlines further from the statement of cashflows and provides details on the cash and cash

equivalents held in the statement of financial position.

Cash comprises cash at bank and on hand.

4.1 RECONCILIATION OF NET SURPLUS TO CASH FLOWS


2021 2020


SECTION NZ$000 NZ$000

RECONCILIATION OF OPERATING CASH FLOWS WITH NET PROFIT/(LOSS) AFTER

TAX:



Profit/(Loss) after tax


3,189 (31,706)




ADJUSTMENTS FOR NON-CASH ITEMS




Deferred tax

7.2

(2,590) (4,237)

Impairment provision - Trade receivables


4 1,939

Gain on foreign exchange transactions


(4,692) (928)

Share based payments


3,566 310

Net interest expense

3.6

176 375

Revaluation and interest on financial liability


- (884)

Other non-cash items


- (3)

Depreciation and amortisation

3.5

10,864 12,354

Impairment of goodwill and other intangibles


- 34,511

Non-cash items


10,517 11,731




ADD/(DEDUCT) MOVEMENTS IN OTHER WORKING CAPITAL ITEMS:


(Increase) / Decrease in trade and other receivables


(3,167) 10,850

Increase/(Decrease) in tax payable


1,430 (2,611)

(Decrease)/Increase in GST payable


(1,284) 1,215

Increase in contract liabilities


413 196

Increase in employee entitlements


4,177 965

Increase/(Decrease) in trade payables and accruals


859 (380)

Net working capital movements 2,428 10,235



Net cash inflow from operating activities 12,945 21,966

4.2 BANK FACILITIES AND BORROWINGS

Gentrack Group has a NZ$20m multi-currency facility with ASB Bank Limited to provide additional funding as

required for acquisitions and general corporate purposes. This facility expires on 28 March 2022, during 2021 the

facility balance was fully repaid leaving $Nil drawn under the facility agreement at 30 September 2021 (2020: $2.5m).

The facility is secured by a general security agreement under which ASB has a security interest in Gentrack Group

assets. Covenants are in place and compliance is reported quarterly.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 26

4.3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, deposits held at call with banks, other short-term and

highly liquid investments with original maturities of three months or less.


2021 2020


NZ$000 NZ$000

Bank balances


25,957 19,320

Cash on hand - 1

Total cash and cash equivalents 25,957 19,321


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 27

5. ASSETS AND LIABILITIES

This section outlines further details of Gentrack Group’s financial position by building on information

presented in the statement of financial position.

5.1. TRADE AND OTHER RECEIVABLES

Gentrack Group recognises trade and other receivables initially at fair value and subsequently measured at

amortised cost using the effective interest method, less provision for impairment. An impairment provision

for trade receivables consists of the expected credit loss in accordance with NZ IFRS 9 and a specific

provision.

A specific provision is established when there is objective evidence that Gentrack Group will not be able to

collect all amounts due according to the original terms of the receivables. The carrying amount of an asset

is reduced using provision accounts, and the amount of the loss is recognised in the statement of

comprehensive income. When a receivable is uncollectible, it is written off against the specific impairment

provision account. Subsequent recoveries of amounts previously written off are credited against the statement of

comprehensive income.


2021 2020


NZ$000 NZ$000

Trade receivables


18,422 15,084

Impairment provision - Expected credit loss


(334) (390)

Impairment provision - Specific provision


(2,945) (3,460)

Provision for volume discounts


(104) (131)

Contract assets


4,865 5,683

Sundry receivables and prepayments 1,842 2,165

Total trade and other receivables 21,746 18,951

MOVEMENT IN TRADE RECEIVABLES IMPAIRMENT PROVISION


2021 2020


NZ$000 NZ$000

Opening balance


3,850 2,868

Increase in impairment provision


1,563 2,618

Write back in impairment provision


(2,089) (566)

Effect of movement in foreign exchange


(21) 13

Bad debt written off (24) (1,083)

Total trade receivables impairment provision 3,279 3,850

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 28

5.1 TRADE AND OTHER RECEIVABLES (CONTINUED)

The expected credit loss provision for trade receivables has been measured using the same techniques as the prior

year, determined as follows.

2021 CURRENT

1-60 DAYS

PAST DUE

61-120

DAYS PAST

DUE

121-180

DAYS PAST

DUE

OVER 180

DAYS PAST

DUE

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

Gross carrying amount 13,318 2,260 591 327 1,926 18,422

Baseline 34 17 9 8 96 164

Aging and Customer

duration

1 - 6 10 97 114

Country, Customer and

Market

26 6 3 2 19 56

Total expected credit loss

rate

0.45% 1.02% 3.02% 6.25% 11.05% 1.81%

Expected credit loss

allowance

60 23 18 20 213 334


2020 CURRENT

1-60 DAYS

PAST DUE

61-120

DAYS PAST

DUE

121-180

DAYS PAST

DUE

OVER 180

DAYS PAST

DUE

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

Gross carrying amount 8,513 3,214 356 806 2,195 15,084

Baseline 21 21 5 20 106 173

Aging and Customer

duration

1 6 3 39 112 161

Country, Customer and

Market

16 8 2 6 24 56

Total expected credit loss

rate

0.45% 1.09% 2.84% 8.08% 11.03% 2.59%

Expected credit loss

allowance

38 35 10 65 242 390

5.2 GOODWILL

Goodwill represents the difference between the cost of acquisition and the fair value of the net identifiable

assets acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to

cash-generating units (CGU) and is not amortised but is tested annually for impairment.


2021 2020


NZ$000 NZ$000

Opening balance


106,599 134,434

Goodwill impairment


- (28,040)

Exchange rate differences 167 205

Net book value 106,766 106,599

Goodwill allocated to Utilities


103,866 103,699

Goodwill allocated to Veovo 2,900 2,900

Net book value 106,766 106,599

During the year due to the further alignment of the Airport 20/20 and Blip Systems CGU, these CGU’s have been

combined to form the Veovo CGU. With further alignment, it is no longer possible to meaningfully separate the

cashflows of these CGU’s and therefore are now reported as a single CGU.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 29

5.3 IMPAIRMENT TESTING

IMPAIRMENT TESTING OF GOODWILL AND OTHER ASSETS

At each reporting date, Gentrack Group assesses whether there is any indication that an asset may be

impaired. Where an indicator of impairment exists, Gentrack Group makes a formal estimate of the

recoverable amount. Where the carrying value of an asset exceeds its recoverable amount, the asset is

considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of

fair value less costs to sell or the asset’s value in use. For the purposes of assessing impairment, assets are grouped at

the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets

other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each

reporting date.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

discount rate that reflects the current market assessments and the time value of money and the risks specific to the

asset. Value in use is determined by discounting the future cash flows generated by each CGU. Cash flows were

projected based on five-year business plans. The Weighted Average Cost of Capital (WACC) is based on CAPM

methodology using market specific inputs. The WACC for each CGU is reviewed at least annually. The key

assumptions are detailed in the table below.

Gentrack Group tests annually whether goodwill has suffered any impairment or more often as required, in

accordance with the accounting policy stated above. The recoverable amounts of cash-generating units have

been determined based on value in use calculations. Preparing five-year forecasts in a COVID-19

environment has been a challenging task due to the uncertainty of the future. In preparing the five-year

forecasts, management has reviewed the assumptions and weighed up the information available at the time to ensure

the forecasts are appropriate given the CGU’s position and the prevailing market conditions.

These calculations require the use of assumptions, the details of these assumptions are presented below and for both

CGU’s a Terminal Growth Rate of 1.85% has been applied.

CASH GENERATING UNIT

2021 REVENUE

GROWTH

2022 - 2026

WACC

2021

2020 REVENUE

GROWTH

2021 - 2025

WACC

2020

Utilities 5.1% CAGR 9.6% 4% CAGR 9.8%

Veovo 10.6% CAGR 10.7% 5% CAGR 10.1%

IMPAIRMENT TESTING RESULTS

The calculations confirmed there was no impairment of goodwill during the year for the Utilities or Veovo CGU’s.

Management believes that any reasonable possible change in the key assumptions for either CGU would not cause

the carrying amount to exceed the recoverable amount.

Changes in key assumptions were considered as sensitivities. These are summarised in the table below.

CASH GENERATING UNIT

RECOVERABLE

AMOUNT

EBITDA

+5%

EBITDA

-5%

WACC

+1%

WACC

-1%

Utilities 199,784 206,873 189,310 176,189 228,849

Veovo 9,724 11,058 9,218 8,641 12,037

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 30

5.4 INTANGIBLE ASSETS

CAPITALISED DEVELOPMENT

Costs that are directly associated with the development of software are recognised as intangible assets

where the following criteria are met:

• it is technically feasible to complete the software product so that it will be available for use.

• management intends to complete the software product and use or sell it.

• there is an ability to use or sell the software product.

• it can be demonstrated how the software product will generate probable future economic benefits.

• adequate technical, financial, and other resources to complete the development and to use or sell the software

product are available; and

• the expenditure attributable to the software product during its development can be reliably measured.

Software development costs that meet the above criteria are capitalised. Other development expenditure that does not

meet the above criteria is recognised as an expense as incurred. Development costs previously recognised as expenses

are not recognised as assets in a subsequent period. Software development costs recognised as assets are amortised

over their estimated useful lives.

BRANDS

Brands are considered to have an indefinite useful life and are held at cost and are not amortised but are subject to an

annual impairment test consistent with the methodology outlined for goodwill above.

OTHER INTANGIBLE ASSETS

Other intangible assets consist of internal use software, acquired source code, trade-marks, and customer relationships.

They have finite useful lives and are measured at cost less accumulated amortisation and accumulated impairment

losses.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 31

5.4 INTANGIBLE ASSETS (CONTINUED)

AMORTISATION

Except for goodwill and brands, intangible assets are amortised on a straight-line basis in the statement of

comprehensive income over their estimated useful lives, from the date that they are available for use.

The estimated useful lives for the current and comparative periods are as follows:

• Acquired source code 10 years

• Internal use software 3 years

• Customer relationships 10 years

• Trademarks 4 years

• Capitalised development 5 years

Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if

appropriate.


2021

SOFTWARE

CUSTOMER

RELATIONSHIPS

BRAND

NAMES

TRADEMARKS

CAPITALISED

DEVELOPMENT

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

Opening balance 25,046 12,888 5,024 454 2,016 45,428

Amortisation (4,666) (2,405) - (165) (544) (7,780)

Movement in foreign

exchange

33 18 - - (1) 50

Closing net book

value

20,413 10,501 5,024 289 1,471 37,698

Cost 45,025 24,169 5,024 841 2,729 77,788

Accumulated

amortisation

(24,612) (13,668) - (552) (1,258) (40,090)

Net book value 20,413 10,501 5,024 289 1,471 37,698



2020

SOFTWARE

CUSTOMER

RELATIONSHIPS

BRAND

NAMES

TRADEMARKS

CAPITALISED

DEVELOPMENT

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

Opening balance 31,413 15,718 5,024 621 7,706 60,482

Additions - - - - 331 331

Amortisation (4,861) (2,473) - (169) (1,562) (9,065)

Impairment (1,616) (390) - - (4,464) (6,470)

Movement in foreign

exchange

110 33 - 2 5 150

Closing net book

value

25,046 12,888 5,024 454 2,016 45,428

Cost 44,945 24,128 5,024 839 2,726 77,662

Accumulated

amortisation

(19,899) (11,240) - (385) (710) (32,234)

Net book value 25,046 12,888 5,024 454 2,016 45,428


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 32

5.5 PROPERTY PLANT AND EQUIPMENT

In the statement of financial position property, plant and equipment is stated at historical cost less

depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation on assets is calculated using the straight-line method to allocate the difference between their

original costs and their residual values over their estimated useful lives, as follows:

• Furniture & equipment 7 years

• Computer equipment 3 to 7 years

• Leasehold improvements Term of lease

The assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is

greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in

the statement of comprehensive income.

2021


FURNITURE &

EQUIPMENT

COMPUTER

EQUIPMENT

LEASEHOLD

IMPROVEMENTS

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000

Opening balance 788 522 1,453 2,763

Additions


28 631 4 663

Depreciation


(170) (396) (171) (737)

Movement in foreign

exchange

(4) (2) - (6)

Net book value 642 755 1,286 2,683

Cost


2,086 4,371 2,088 8,545

Accumulated depreciation (1,444) (3,616) (802) (5,862)

Net book value 642 755 1,286 2,683


2020


FURNITURE &

EQUIPMENT

COMPUTER

EQUIPMENT

LEASEHOLD

IMPROVEMENTS

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000

Opening balance


969 849 1,635 3,453

Additions


22 300 2 324

Depreciation


(197) (556) (185) (938)

Disposals


- (16) - (16)

Movement in foreign

exchange

(6) (55) 1 (60)

Net book value 788 522 1,453 2,763

Cost


2,097 3,918 2,088 8,103

Accumulated depreciation (1,309) (3,396) (635) (5,340)

Net book value 788 522 1,453 2,763


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 33

5.6 TRADE PAYABLES AND ACCRUALS

Gentrack Group recognises trade and other payables initially at fair value and subsequently measured at

amortised cost using the effective interest method. They represent liabilities for goods and services

provided prior to the end of the financial year that are unpaid. The amounts are unsecured, non-interest

bearing and are usually paid within 45 days of recognition.


2021 2020


NZ$000 NZ$000

Trade creditors


1,929 1,803

Sundry accruals 2,584 2,102

Total trade payables and accruals 4,513 3,905

5.7 EMPLOYEE ENTITLEMENTS

Liabilities for salaries and wages, including non-monetary benefits, long service leave, and annual leave are

recognised in employee benefits in respect of employees’ services up to the reporting date. They are

measured at the amounts expected to be paid when the liabilities are settled. Cost for non-accumulating

sick leave is recognised when the leave is taken and measured at the rates paid or payable.


2021 2020


NZ$000 NZ$000

CURRENT

Long service leave


448 611

Other short-term employee benefits 9,087 4,941


9,535 5,552

NON-CURRENT




Long service leave


539 428

Total employee entitlements 10,074 5,980

5.8 INVENTORY

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using a weighted average

method and includes expenditure incurred to purchase the inventory and transport it to its current location. Net

realisable value is the estimated selling price of the inventory in the ordinary course of business less costs

necessary to make the sale. The cost of inventories consumed during the year are recognised as an

expense and included in expenditure in the statement of comprehensive income.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 34

6. CAPITAL STRUCTURE

This section outlines Gentrack Group’s capital structure and details of share-based employee

incentives which have an impact on Gentrack Group’s equity.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares

and share options are recognised as a deduction from equity, net of any tax effects. Where any Gentrack

Group company purchases the Company’s equity share capital (treasury shares), the consideration paid is

deducted from equity attributable to the Company’s equity holders until the shares are cancelled or

transferred outside Gentrack Group.

Ordinary shares are fully paid and have no par value. The holders of ordinary shares are entitled to receive dividends as

declared from time to time and are entitled to one vote per share at meetings of the Company and rank equally with

regard to the Company’s residual assets.

6.1 CAPITAL MANAGEMENT

The capital structure of Gentrack Group consists of equity raised by the issue of ordinary shares in the parent

company.

Gentrack Group manages its capital to ensure that companies in the Group can continue as going concerns. Gentrack

Group is not subject to any externally imposed capital requirements.


SHARES ISSUED SHARE CAPITAL


2021 2020 2021 2020


000 000 NZ$000 NZ$000

Ordinary Shares 98,645 98,645 191,229 191,229

Issue of new ordinary shares 302 - 470 -

98,947 98,645 191,699 191,229

During 2021 Performance Rights of 274,105 in relation to Long Term Incentive Schemes vested, resulting in the same

number of new shares being issued. Also 28,389 shares were issued as part payment of Gentrack Group Directors

fees.

6.2 SHARE BASED PAYMENTS

Gentrack Group operates equity settled, share-based payments schemes under which it receives services

from employees, as consideration for equity instruments of Gentrack Group. A valuation is completed for

each scheme at the grant date to estimate the fair value of the performance rights granted. Management

also makes estimates about the number of performance rights that are expected to vest which determines

the expense recorded in the statement of comprehensive income.

The fair value of the performance rights is determined at the grant date using the Black Scholes valuation method, the

key input into the valuation model is the grant date share price. The fair value of the performance rights is

recorded as an expense in the statement of comprehensive income over the vesting period, based on

Gentrack Group’s estimate of the number of performance rights that will vest, with a corresponding entry to

the share-based payment reserve within equity. During the year ended 30 September 2021, $3.6m has been

recognised in the statement of comprehensive income (2020: $0.3m).

During the year ended 30 September 2021, two new equity settled share-based payment schemes were introduced

and additional participants were granted performance rights under the existing scheme. The existing scheme has

been renamed as the Senior Leadership Long Term Incentive. The two new equity settled share-based payment

schemes introduced during the year are the Gentrack Long Term Incentive Scheme and the CEO Long Term

Incentive Scheme.

SENIOR LEADERSHIP LONG TERM INCENTIVE SCHEME

During the year the Gentrack Group Board approved the sixth annual grant of performance rights in the Senior

Leadership Long Term Incentive Scheme, this scheme was first introduced in 2016 for selected key personnel. The

scheme is intended to attract and reward key personnel to focus on long-term performance. The number of

performance rights allocated is based on a percentage of salary or other such percentage and are calculated with

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 35

6.2 SHARE BASED PAYMENTS (CONTINUED)

reference to the 10-trading day volume weighted average price (VWAP) of shares traded on the NZX based on dates

indicated in the issue documentation.

The number of performance rights subject to the Earnings Per Share (EPS) hurdle that will vest after three years

depends on achievement of the EPS performance hurdle. The performance hurdle is that 50% of the EPS

Performance Rights will vest if EPS Compounding Annual Growth Rate (CAGR) of Gentrack Group over the three

financial years is 7%, with the number of performance rights that vest increasing on a linear basis to 100% if EPS

CAGR of 12% is achieved.

During 2021, 24,105 Performance Rights in the Senior Leadership Long Term Incentive vested with a weighted

average vesting date share price of $2.10 per share. Below are the

details of the outstanding performance rights in the Senior Leadership Long Term Incentive Scheme:


GRANT DATE EXPIRY DATE

TOTAL VALUE

OF GRANTED

PERFORMANCE

RIGHTS

PERFORMANCE

RIGHTS

GRANTED

2021

NZ$000 000

EPS SCHEMES 2018-2021

1 October 2018 30 November 2021 310 65

1 October 2019 30 November 2022 351 160

1 April 2020 1 April 2023 1,023 769

1 October 2020 1 April 2022 973 666

1 October 2020 30 November 2023 996 682

Total Senior Leadership LTI Schemes 3,653 2,342

GRANT DATE EXPIRY DATE

TOTAL VALUE

OF GRANTED

PERFORMANCE

RIGHTS

PERFORMANCE

RIGHTS

GRANTED

2020

NZ$000 000

EPS SCHEMES 2017-2020


1 October 2017 30 November 2020 318 55

1 October 2018 30 November 2021 411 86

1 October 2019 30 November 2022 1,055 217

1 April 2020 1 April 2023 1,364 1,026

1 August 2020 1 August 2021 28 24

Total Senior Leadership LTI Schemes 3,176 1,408

GENTRACK LONG TERM INCENTIVE SCHEME

On 24 December 2020 Gentrack Group announced the establishment of a new Long Term Incentive Scheme

(Gentrack Long Term Incentive Scheme). The Gentrack Long Term Incentive Scheme has been introduced to:

- Assist with the retention of eligible employees

- Significantly increase the number of Gentrack Group employees that have a stake in Gentrack Group

- Give eligible employees a share in Gentrack Group’s future performance

The participants of the Gentrack Long Term Incentive Scheme are offered Performance Rights for nil consideration,

which on vesting will entitle them to receive one ordinary share in Gentrack Group. These Performance Rights will

vest subject to the participants continuing to be employed by Gentrack Group at the end of the vesting period which

commences 1 October 2022.

Gentrack Group issued 592,352 Performance Rights to employees under the Gentrack Long Term Incentive Scheme

during 2021. 535,819 Performance Rights are outstanding at 30 September 2021 with a grant date fair value of $0.8m

and an expiry date of 1 October 2022.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 36

6.2 SHARE BASED PAYMENTS (CONTINUED)

CEO LONG TERM INCENTIVE SCHEME

Gary Miles was appointed to the role of Managing Director and Chief Executive Officer (CEO) from 1 October 2020

and included in the remuneration package are Performance Rights granted for nil consideration.

During 2021, a total of 1,248,604 Performance Rights were issued under the CEO Long Term Incentive Scheme,

which 500,000 were an initial grant with 250,000 of these vesting immediately and the remaining 250,000 to vest on

the one-year anniversary of starting employment with Gentrack Group. There are no vesting conditions or

performance hurdles in regard to the initial grant. The remaining 748,604 Performance Rights granted are an initial

annual grant and will vest at the end of a 13-month performance period, vesting subject to performance hurdles set

by the Board of Directors and is aligned with initial business transformation and the financial performance during

2021.

During 2021 a total of 250,000 Performance Rights have vested with a weighted average share price on the vesting

date of $1.57 per share. 998,604 Performance Rights remain outstanding at 30 September 2021, with a total grant

date fair value of $1.54m and an expiry date of 31 October 2021.

PERFORMANCE RIGHTS MOVEMENTS

Below is a summary of all performance rights, granted, exercised and forfeited across all the equity settled share-

based payments schemes operated by Gentrack Group during 2021:


2021 2020

GRANT DATE

AVERAGE

EXERCISE PRICE

PER

PERFORMANCE

RIGHT

NUMBER OF

PERFORMANCE

RIGHTS

AVERAGE

EXERCISE PRICE

PER

PERFORMANCE

RIGHT

NUMBER OF

PERFORMANCE

RIGHTS


000 000

As at 1 October $2.25 1,408 $4.49 268

Granted during the year $1.49 3,253 $1.93 1,267

Exercised during the year $1.51 (274) - -

Forfeited during the year $2.08 (511) $3.78 (127)

As at 30 September $1.54 3,876 $2.25 1,408



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 37

6.3 DIVIDENDS

Details of the dividends paid during the year ended 30 September 2021 are provided below:


CENTS PER SHARE DIVIDENDS PAID

2021 2020 2021 2020


NZ$000 NZ$000

Final dividend paid - 3.0c - 3,004

Interim dividend paid - - -

- 3.0c - 3,004

6.4 EARNINGS PER SHARE

Gentrack Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS

is calculated by dividing the net profit attributable to ordinary shareholders of the Company by the weighted

average number of ordinary shares on issue during the year, excluding shares purchased and held as

treasury shares.

Diluted EPS is determined by adjusting the net profit attributable to ordinary shareholders and the weighted average

number of ordinary shares on issue for the effects of the dilutive impact of potential ordinary shares, which comprise

performance share rights granted to employees.

Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease

EPS or increase the profit per share.


2021 2020


Profit/(Loss) attributable to the shareholders of the company


3,189 (31,706)

Profit/(Loss) attributable to the shareholders of the company

adjusted for the effect of dilution


3,189 (31,706)

Basic weighted average number of ordinary shares issued


98,761 98,645

Shares deemed to be issued for no consideration in respect

of share-based payments


3,876 1,408

Weighted average number of shares used in diluted earnings

per share


102,637 100,053

Basic earnings per share


$0.03 ($0.32)

Diluted earnings per share


$0.03 ($0.32)


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 38

7. TAX

7.1 INCOME TAX EXPENSE

In the statement of comprehensive income, the income tax expense comprises current and deferred tax.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or

substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Current tax payable also includes any tax liability arising from the declaration of dividends.


2021 2020


NZ$000 NZ$000

INCOME TAX EXPENSE COMPRISES:




Current tax expense


4,965 1,676

Deferred tax expense (2,590) (4,237)

Tax expense/(benefit) 2,375 (2,561)

RECONCILIATION OF INCOME TAX EXPENSE

The relationship between the expected income tax expense based on the domestic effective tax rate of Gentrack

Group at 28% (2020: 28%) and the reported tax expense in the statement of comprehensive income can be

reconciled as follows:


2021 2020


NZ$000 NZ$000

Profit/(Loss) before tax 5,564 (34,267)

Taxable income


5,564 (34,267)

Domestic tax rate for Gentrack Group 28% 28%

Expected tax expense/(benefit) 1,558 (9,595)

Non-deductible expense


1,345 8,350

Foreign subsidiary company tax


(40) 1,009

Prior period adjustments (488) (2,325)

Actual tax expense/(benefit) 2,375 (2,561)

As at 30 September 2021 Gentrack Group has $9.4m (2020: $8.7m) of imputation credits available for use in

subsequent reporting periods.

7.2 DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax is recognised, using the liability method, on temporary differences arising between the tax bases of

assets and liabilities and their carrying amounts in the financial statements.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially

enacted by the reporting date and are expected to apply when the related deferred income tax asset is

realised, or the deferred income tax liability is settled.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except for deferred

income tax liabilities where the timing of the reversal of the temporary difference is controlled by Gentrack Group

and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax

assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income tax levied

by the same taxation authority on either the same taxable entity or different entities where there is an intention to

settle the balance on a net basis.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 39

7.2 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)

Additional income tax expenses that arise from the distribution of cash dividends are recognised while the liability to

pay the related dividend is recognised. Gentrack Group does not distribute non-cash assets as dividends to its

shareholders.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable

that the related benefits will be realised.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available

against which temporary differences can be utilised. Management applies judgement when reviewing

current business plans and forecasts to ascertain the likelihood of future taxable profits.

The movement in temporary differences has been recognised in the statement of comprehensive income. Deferred tax

has been recognised at a rate at which they are expected to be realised: 28% for New Zealand entities, 30% for Australian

entities, 19% for UK entities, 22% for Denmark entities and 35% for Malta entities.

Movement in temporary timing differences during the year:

2021

OPENING

BALANCE

TEMPORARY

MOVEMENT

RECOGNISED

CURRENCY

TRANSLATION

CLOSING

BALANCE


NZ$000 NZ$000 NZ$000 NZ$000

Trade and other receivables (84) 66 4 (14)

Intangible assets (4,913) 1,631 (9) (3,291)

Contract liabilities 871 140 (28) 983

Provisions 1,738 973 (35) 2,676

Losses carried forward 2,016 (203) (86) 1,727

Other 24 (17) (2) 5

Net deferred tax (348) 2,590 (156) 2,086


2020

OPENING

BALANCE

TEMPORARY

MOVEMENT

RECOGNISED

CURRENCY

TRANSLATION

CLOSING

BALANCE


NZ$000 NZ$000 NZ$000 NZ$000

Trade and other receivables (68) (15) (1) (84)

Intangible assets (7,196) 2,303 (20) (4,913)

Contract liabilities 661 202 8 871

Provisions 1,056 673 9 1,738

Losses carried forward 1,076 944 (4) 2,016

Other (97) 130 (9) 24

Net deferred tax (4,568) 4,237 (17) (348)



NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 40

8. FINANCIAL RISK MANAGEMENT

Gentrack Group is exposed to credit risk, liquidity risk and market risks which include foreign currency risk,

commodity price risk and interest risk. This section details of each of these financial risks and how they are

managed by Gentrack Group.

The Board of Directors has overall responsibility for the establishment and oversight of Gentrack Group’s

risk management framework. Gentrack Group’s risk management policies are established to identify and

analyse (amongst other risks) the financial risks faced by Gentrack Group, to set appropriate risk limits and

controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed

regularly to reflect changes in market conditions and Gentrack Group’s activities.

8.1 CREDIT RISK

Credit risk is the risk of financial loss to Gentrack Group if a customer or counter party to a financial instrument fails to

meet its contractual obligations, and it arises principally from Gentrack Group’s trade receivables from customers in the

normal course of business.

Gentrack Group’s exposure to credit risk is influenced mainly by the individual characteristics of each

customer. The credit worthiness of a customer or counter party is determined by several qualitative and

quantitative factors. Qualitative factors include external credit ratings (where available), payment history and

strategic importance of customer or counter party. Quantitative factors include transaction size, net assets of

customer or counter party, and ratio analysis on liquidity, cash flow and profitability.

In relation to trade receivables, it is Gentrack Group’s policy that all customers who wish to trade on terms are subject to

credit verification on an ongoing basis with the intention of minimising bad debts. The nature of Gentrack Group’s trade

receivables is represented by regular turnover of product and billing of customers based on the contractual payment

terms.

Gentrack Group has an impairment provision that represents its estimate of future incurred losses in respect of trade and

other receivables. The impairment provision consists of the expected credit loss provision in accordance with NZ IFRS

9 and a specific doubtful debt provision used where there is objective evidence that indicates a trade receivable is

impaired.

The carrying amount of Gentrack Group’s financial assets represents the maximum credit exposure as summarised in

the table below:


2021 2020


GROSS

IMPAIRMENT

PROVISION

GROSS

IMPAIRMENT

PROVISION


NZ$000 NZ$000 NZ$000 NZ$000

Current 13,318 (348) 8,513 (38)

Past due 1-60 days 2,260 (454) 3,214 (918)

Past due 61-120 days 591 (261) 356 (178)

Past due 121-180 days 327 (315) 806 (600)

Past due over 180 days 1,926 (1,901) 2,195 (2,116)

18,422 (3,279) 15,084 (3,850)

Gentrack Group’s trade receivables are not exposed to any significant credit exposure to any single counterparty or

group of counterparties having similar characteristics. Trade receivables consist of several customers in various

geographical areas. Based on historic information about customer default rates, management considers the credit

quality of trade receivables that are not past due or impaired to be good.

As at 30 September 2021 there are no significant concentrations of credit risk for financial assets designated as at

amortised cost or at fair value. The carrying amount reflects Gentrack Group’s maximum exposure to credit risk for

these financial assets.

Judgement has been applied to the recovery of all trade receivables, with management confirming that all carrying

amounts are deemed to be recoverable and not impaired.

The credit risk for cash and cash equivalents is considered negligible since the counterparties are highly reputable

financial intuitions with high quality external credit ratings.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 41

8.2 MARKET RISK

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect

Gentrack Group’s income or the value of its holdings of financial instruments. The objective of market risk

management is to manage and control market risk exposures within acceptable parameters, while optimising the

return on risk.

FOREIGN CURRENCY RISK

Gentrack Group is exposed to currency risk on transactions that are denominated in a currency other than the

functional currency of Gentrack Group (NZD), primarily the following currencies Australian Dollar (AUD), Pound

Sterling (GBP), EURO (EUR), US Dollar (USD), and Danish Kroner (DKK).

Gentrack Group’s exposure to foreign currency risk at the reporting date was as follows (all amounts are

denominated in New Zealand Dollars):


AUD GBP EUR USD DKK

2021

NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

Cash and cash equivalents 10,756 8,002 496 855 183

Trade and other receivables 4,503 10,074 1,493 874 1,915

Trade and other payables (132) (2,608) (72) (354) (562)

Bank loans - - - - -

Net exposure 15,127 15,468 1,917 1,375 1,536


2020


Cash and cash equivalents 5,634 10,675 70 1,029 96

Trade and other receivables 4,790 8,874 1,056 1,369 1,521

Trade and other payables (218) (1,479) (507) (1,768) (103)

Bank loans - (2,536) - - -

Net exposure 10,206 15,534 619 630 1,514

The following table summarises the sensitivity of profit or loss and equity with regards to Gentrack Group’s financial

assets and financial liabilities affected by AUD/NZD exchange rate, the GBP/NZD exchange rate, the EUR/NZD

exchange rate, the USD/NZD exchange rate, and the DKK/NZD exchange rate with all other aspects being equal. It

assumes a +/-10% change in the NZD to the currency exchange rate for the year ended 30 September 2021 (2020:

10%). These +/-10% sensitivities have been determined based on the average market volatility in exchange rates in

the preceding 12 months.


PROFIT/EQUITY


AUD GBP EUR USD DKK


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

2021


10% strengthening in NZD (1,375) (1,406) (174) (125) (140)

10% weakening in NZD 1,681 1,719 213 153 171


2020


10% strengthening in NZD (928) (1,412) (56) (57) (138)

10% weakening in NZD 1,134 1,726 69 70 168

Gentrack Group’s exposure to foreign exchange rates varies during the year depending on the volume of foreign

currency transactions. Even so, the analysis above is representative of Gentrack Group’s exposure to market risk.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 42

8.3 LIQUIDITY RISK

Liquidity risk is the risk that Gentrack Group will not be able to meet its financial obligations as and when they become due

and payable. Gentrack Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have

sufficient liquidity to meet its liabilities when they become due and payable, under both normal and stressed conditions,

without incurring unacceptable losses or risking damage to Gentrack Group’s reputation.

Gentrack Group has sufficient cash to meet its requirements in the foreseeable future.

The following table details Gentrack Group’s contractual maturities of financial liabilities, as at the reporting date:


ON

DEMAND

LESS THAN

3 MONTHS

3 TO 12

MONTHS

1 TO 5

YEARS

>5 YEARS TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

2021


Bank loan - - - - - -

Trade payables - 1,929 - - - 1,929

Financial liabilities - - - - - -

- 1,929 - - - 1,929


2020


Bank loan - - 2,536 - - 2,536

Trade payables - 1,803 - - - 1,803

Financial liabilities - - - - - -

- 1,803 2,536 - - 4,339

8.4 INTEREST RATE RISK

Gentrack Group’s interest rate risk primarily arises from short term bank borrowing, cash, and advances from related

parties. Borrowings and deposits at variable interest rates expose Gentrack Group to cash flow interest rate risk.

Borrowings and deposits at fixed rates expose Gentrack Group to fair value interest rate risk.

The following tables detail the interest rate repricing profile and current interest rate of the interest-bearing financial

assets and liabilities.


EFFECTIVE

INTEREST

RATE

FLOATING

FIXED UP

TO 3

MONTHS

FIXED UP

TO 6

MONTHS

FIXED UP

TO 5 YEARS

TOTAL


NZ$000 NZ$000 NZ$000 NZ$000 NZ$000 NZ$000

ASSETS



Bank balances - 25,957 - - - 25,957

Total exposure 25,957 - - - 25,957



EFFECTIVE

INTEREST

RATE +1%

EFFECTIVE

INTEREST

RATE -1%


NZ$000 NZ$000

Bank balances


262 (262)

Total exposure 262 (262)


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 43

8.5 FINANCIAL INSTRUMENTS

Gentrack Group’s financial assets are measured at amortised cost. Gentrack Group’s financial assets are

held within a business model whose objective is to hold the financial asset to collect contractual cash flows

and the financial asset gives rise to contractual cash flows on specified dates that are payments of principal

and interest on the principal outstanding.

Gentrack Group’s financial liabilities are measured at amortised cost except for contingent consideration which is

required to be measured at fair value through profit and loss.

Gentrack Group’s financial assets and liabilities by category are summarised as follows:

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise of cash at bank and on hand and the carrying amount is equivalent to fair value.

TRADE RECEIVABLES

These assets are short term in nature and are reviewed for impairment; the carrying value approximates their fair

value.

TRADE PAYABLES

These liabilities are mainly short term in nature with the carrying value approximating the fair value.

LOANS AND BORROWINGS

Loans and borrowings have a floating interest rate. Fair value is estimated using the discounted cash flow model

based on current market interest rate for a similar product; the carrying value approximates their fair value.

FAIR VALUES

Gentrack Group’s financial instruments that are measured after initial recognition at fair values are grouped into levels

based on the degree to which their fair value is observable:

• Level 1 – fair value measurements derived from quoted prices in active markets for identical assets.

• Level 2 – fair value measurements derived from inputs other than quoted prices included within level 1 that are

observable for the asset or liability, either directly or indirectly.

• Level 3 – fair value measurements derived from valuation techniques that include inputs for the asset or liability

which are not based on observable market data.

There have been no transfers between levels or changes in the valuation methods used to determine the fair value of

Gentrack Group’s financial instruments during the period. As at 30 September 2021 Gentrack Group has no of level 3

financial instruments (2020: $Nil).

FINANCIAL INSTRUMENTS BY CATEGORY


2021 2020


NZ$000 NZ$000

FINANCIAL ASSETS MEASURED AT AMORTISED COST




Cash and cash equivalents


25,957 19,321

Trade and other receivables 21,746 18,951


47,703 38,272

FINANCIAL LIABILITIES MEASURED AT AMORTISED COST




Loans and borrowings


- (2,536)

Trade payables


(1,929) (1,803)

FINANCIAL LIABILITIES MEASURED AT FAIR VALUE




Financial Liabilities - -


(1,929) (4,339)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 44

9. OTHER INFORMATION

9.1 LEASE ASSETS AND LEASE LIABILITIES

RECOGNITION AND MEASUREMENT OF GENTRACK GROUP LEASING ACTIVITIES

Gentrack Group predominantly leases property for fixed periods of 1-12 years and may have extension

options. These extension options are usually at the discretion of Gentrack Group and are included in the

measurement of the lease asset if management intends to exercise the extension. Lease terms are

negotiated on an individual basis and contain a variety of terms and conditions. However, these lease

agreements do not impose any covenants.

Leases are recognised as a right of use asset (lease asset) and a corresponding lease liability at the date at which the

leased asset is available for use. Each lease payment is allocated between the liability and finance cost. The finance

cost is charged to profit or loss over the lease period. The lease asset is depreciated over the shorter of the asset’s

useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the

net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable

• variable lease payments that are based on an index or a rate

• amounts expected to be payable by the lessee under residual value guarantees

• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the lessee’s incremental borrowing rate, being the rate that the lessee

would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic

environment with similar terms and conditions.

Lease assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability

• any lease payments made at or before the commencement date less any lease incentives received

• any initial direct costs, and

• restoration costs.

Key movements related to the lease assets and lease liabilities are presented below:

LEASE ASSETS


2021 2020


NZ$000 NZ$000




Balance at 1 October


10,338 12,671

Lease amendments


185 -

Depreciation charges


(2,347) (2,350)

Exchange differences (14) 17

Lease assets at 30 September 8,162 10,338




Property


8,156 10,302

Office equipment


6 36

Lease assets at 30 September 8,162 10,338

Office equipment includes Coffee Machines and Printer/Copiers.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 45

9.1 LEASE ASSETS AND LEASE LIABILITIES (CONTINUED)

LEASE LIABILITIES


2021 2020


NZ$000 NZ$000

Balance at 1 October


15,127 17,620

Lease amendments


185 -

Principal repayments


(2,748) (2,457)

Exchange differences (12) (36)

Lease liabilities at 30 September 12,552 15,127




Less than one year


1,376 2,692

One to five years


5,486 5,229

More than five years 5,690 7,206

Lease liabilities at 30 September 12,552 15,127

LEASE EXPENSES


2021 2020


NZ$000 NZ$000




Depreciation charges


2,347 2,351

Finance charges 814 931

Lease expenses 3,161 3,282

9.2 AUDITORS REMUNERATION

The table below outlines the amounts paid to auditors during the year ended 30 September 2021. Gentrack Group’s

current Group auditor is EY after switching from KPMG at the beginning of the year.


2021 2020


NZ$000 NZ$000

KPMG - audit fees


86 517

KPMG - review fees


- 116

KPMG - taxation services


301 221

EY - audit fees


400 -




Entrust - audit fees 6 6

Total fees paid to auditor(s) 793 860


NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2021

GENTRACK FINANCIAL STATEMENTS / 46

9.3 KEY MANAGEMENT AND RELATED PARTIES

Key management personnel are defined as those persons having authority and responsibility for planning,

directing, and controlling the activities of Gentrack Group, directly or indirectly, and include the Directors,

the Chief Executive, their direct reports. The following table summarises remuneration paid to key

management personnel.


2021 2020


NZ$000 NZ$000

Salaries, bonus and other benefits


4,526 4,157

Share-based payments


465 -

Directors' fees 606 386

Remuneration paid to Key Management Personnel 5,597 4,543

Gentrack Group’s Directors are also directors of other companies. During the year ended 30 September 2021 no

transactions have occurred between Gentrack Group and any of these companies.

Some of the Directors and key management personnel are shareholders in Gentrack Group Limited. Gentrack Group

does not transact with the Directors or key management personnel, and their related parties, other than in their

capacity as Directors, consultants, and employees. Refer to note 2.4 for more information on other related parties.

9.4 OTHER DISCLOSURES

CAPITAL COMMITMENTS

There are no capital commitments at 30 September 2021 (2020: $Nil).

CONTINGENCIES

ASB New Zealand has provided guarantees of $1.1m (2020: $0.9m) on behalf of the Gentrack Group, these guarantees

are in place for software implementation projects, property leases and credit card programs.

EVENTS AFTER BALANCE DATE

There were no material events after balance date.

On 24 November 2021, the Gentrack Group Board determined that no final dividend will be paid out for the 2021

financial year (2020: nil).


CORPORATE DIRECTORY
GENTRACK FULL YEAR FINANCIAL STATEMENTS / 47

REGISTERED OFFICE

Gentrack Group Limited

17 Hargreaves Street, St Marys Bay, Auckland 1011,

New Zealand

Phone: +64 9 966 6090

Facsimile: +64 9 376 7223

Level 9, 390 St Kilda Road, Melbourne, VIC 3004

Australia

Phone: +61 3 9867 9100

Facsimile: +61 9867 9140

POSTAL ADDRESS

PO Box 3288, Shortland Street, Auckland 1140 New

Zealand

NEW ZEALAND INCORPORATION NUMBER

3768390

AUSTRALIAN REGISTERED BODY NUMBER (ARBN)

169 195 751

DIRECTORS

Andy Green, Chair

Nicholas Luckock

Fiona Oliver

Stewart Sherriff

Darc Rasmussen

Gary Miles

COMPANY SECRETARY

Pip White

AUDITOR

EY

EY Building, 2 Takutai Square, Britomart

Auckland 1010

Phone: +64 9 377 4790

LEGAL ADVISERS

BELL GULLY

BANKERS

ASB BANK LIMITED

ANZ LIMITED

HSBC PLC

NORDEA DENMARK A/S

BANK OF VALLETTA PLC

TRUIST FINANCIAL CORPORATION

SHARE REGISTRAR

NEW ZEALAND

LINK MARKET SERVICES LIMITED

Level 11, Deloitte Centre, 80 Queen Street, Auckland

1010

PO Box 91 976, Auckland 1142

Phone: +64 9 375 5998

Facsimile: +64 9 375 5990

Email: enquiries@linkmarketservices.com

AUSTRALIA

LINK MARKET SERVICES LIMITED

Level 12, 680 George Street, Sydney, NSW 2000

Locked Bag A14, Sydney South, NSW 1235

Phone: +61 1300 554 474

Facsimile: +2 9287 0303

Email: enquiries@linkmarketservices.com


CORPORATE DIRECTORY
GENTRACK FULL YEAR FINANCIAL STATEMENTS / 48

---

© Gentrack 2021. All rights reserved.
GentrackGroup

FY21

Full Year Update

25 November 2021

2
© Gentrack 2021. All rights reserved.

Disclaimer

This presentation may contain forward-looking statements.

Forward-looking statements often include words such as

‘anticipate’, ‘expect’, ‘plan’ or similar words in connection with

discussions of future operating or financial performance.

The forward-looking statements are based on management’s and

directors’ current expectations and assumptions regarding

Gentrack’s business and performance, the economy and other

future conditions, circumstances and results. As with any projection

or forecast, forward-looking statements are inherently susceptible

to uncertainty and changes in circumstances. Gentrack’s actual

results may vary materially from those expressed or implied in its

forward-looking statements.

All figures are shown in NZ$M.

2

© Gentrack 2021. All rights reserved.
CEO Commentary

Gary Miles

Chief Executive Officer

4
© Gentrack 2021. All rights reserved.

FY21 Financial Headlines

105.7

FY20FY21

FY20FY21

12.1

12.7

FY20FY21

81.3

81.9

FY20FY21

81.8

89.0

16.8

26.0

up

5.2%

up

5.0%

up

0.7%

•EBITDA of $12.7m, up 5.0% from $12.1m in FY20.

•Net cash up $9.2m to $26.0m at 30th Sept 2021.

•Utilities Revenue up 8.8%:

•Strong NRR growth (up 68% to $18.3m) on

successful project deliveries, providing future

ARR growth

•Utilities ARR down 0.3% after absorbing ~$4m

customer revenue losses from prior periods

•Veovo (Airport Business) remains profitable

despite industry downturn:

•ARRis up by 7.7%

•Operating costs up 5.2% FY21 vs FY20 with

investmentinpeople

•Nil capitalisationof R&D costs.

100.5

up

8.8%

FY20FY21

up

54.8%

5
© Gentrack 2021. All rights reserved.

Strategic Growth Pillar 1

Strong Base

Customers in Green high

performance status

72%

Canstar5 Star ranked

11 years in a row

customer satisfaction rating

Revenue per

delivery FTE

is up

Very good delivery execution -

projects on time and on budget

Strong DSO and unbilled revenue

management

Customer strategic alignment for

innovation and upsell

7%

Cost per

delivery FTE

is down

3%

Delivery quality, efficiency and throughput

will continue to improve further

increased

revenue per

customer

6
© Gentrack 2021. All rights reserved.

Strategic and profitable customer relationships

Growth through continuous delivery of new

innovations

New LogosManaged Service

CHART

5

New engagements

secured

New engagements and

pipeline will enable FY22

growth

New customers

7

$5.6m

Generally flat FY20 to

FY21 revenue position

new B2B billing retailer

3

new water billing retailer

1

new profit & risk customers

(managed services) à

2

Strategic Growth Pillars 2 and 3

Strengthened B2B leadership by winning and integrating E.ON and Npower, now the

largest UK C&I supplier -one of the most significant transformation programmes globally

new B2C billing retailer

1

$

7
© Gentrack 2021. All rights reserved.

Progress on cloud, clean technology

delivering innovation and profitability for a sustainable era

Customers turning to

Gentrack to partner in order

to drive cloud native,

cleantech innovations.

Smart meter data

management

Customer

volume risk

management

Renewable

generation

products

Point of Sale

forecasting

Upgrades to Cloud

solution

Gentrack Cloud for Utilities

Time based

pricing & billing

Bill anything, multiplay,

green(e.g. EV’s)

Billing, revenue &

debt management

Faster

switching

eryof new innovations

“....together with

Gentrack, we can

deliver complex

business change at

pace. and now we have the

foundation in place for the next

phase of our retail journey.“

Matt van Deventer, GM of

technology and delivery

8
© Gentrack 2021. All rights reserved.

Veovo

Signs of aviation industry recovery starting to show with passenger numbers up 220% vs 2020 and back to only 50% down

on 2019.

4

New customers

9

Major Projects delivered

17

Customers on SaaS Cloud

üLondon Gatwick

ü3 North American customers

üExtended support in Europe

and APAC

üPerth

üLondon Luton

üCincinnati

üAll major Passenger Flow

customers migrated to cloud

SaaS

üFirst customer adoption of

new CI/CD

•Increasing investment in technology in FY22 as we believe in the segment

•Proven our technology in all airport tiers –sales focus will be on major aviation hubs going forward

“Veovo helps us manage performance with data-driven certainty...”

-

Eric van ́tVeer, Project Manager at Schiphol Group

üNew York

üAsia Pacific

üMexico

9
© Gentrack 2021. All rights reserved.

The UK Market

•B2C supplier failures in the UK has accelerated due to the global energy crisis and Government enforced price cap.

•This week, Bulb went into a special form of administration for larger supplier failures which has not been tested before.

•We will continue to support the business as required by the administrator as options for the business are assessed

over the coming months.

•We anticipate there may be some further supplier failures in the coming winter months after which our expectation is

that the market will stabilise.

•We have made allowances for a reasonable scenario for these additional potential failures.

•Gentrack revenue is diversified across airports and utilities, with our energy and water customers active in 6 countries,

covering both B2B and B2C.

9

Customer insolvencies

since beginning of

FY21

6

Customer insolvencies

From beginning of

FY17 to end of FY20

10
© Gentrack 2021. All rights reserved.

Future opportunity remains strong

Great technology

Delivery excellence

“By 2025, at least 25% of CIS contracts

will be awarded to new entrants that

will disrupt incumbent vendors

offerings”

Gartner

1.5b+ meters

incumbent market today

© Gentrack 2021. All rights reserved.
Financial Results

James Spence

Chief Financial Officer

For the Full Year ending

30 September 2021

12
© Gentrack 2021. All rights reserved.

TopCustomer Reporting.xlsx

Group Profit and Loss

Revenue up 5.2% vs FY20:growth in Utilities

business driven by new customers and increases

from existing customers offsetting revenue

reductions in Veovo due to market conditions

Costs up 5.2% vs FY20: driven by increased

investment in personnel,with continued savings in

non-personnel costs

EBITDA up 5.0% vs FY20.

Net Finance (expense)/income: one-time, mainly

due to simplificationof internal funding structure

Nil R&Dcapitalisationin FY21

1 Underlying EBITDA being earnings before depreciation, amortisation, impairments and non-operating expenses related to acquisitions. EBITDA is a non-GAAP measure

Utilities

Veovo

Group

13
© Gentrack 2021. All rights reserved.

Utilities Revenue Analysis

•NRR up 68% to $18.3m driven by project

deliveries in UK and Australia. Customers

converting to recurring revenues in

FY21/FY22

•ARR growth negatively impacted by ~$4m

of previous years' customer losses.

•Growth from new and existing Utilities

customers (Australia/UK) offset revenue

loss

•TRR growth rate in FY21 negatively

impacted by incremental regulatory work

in FY20

Utilities Revenue FY20 v FY21

$81.8m

$89.0m

Total Revenue

Up 8.8% on FY20

Annual

Recurring

Revenue

$70.7m

Down 0.3% on FY20

-79.4% of total

utilities revenue

Committed Monthly

Recurring Revenues

(CMRR)

Non-contracted

Recurring Revenues

(TRR)

Non-recurring

Revenues (NRR)

14
© Gentrack 2021. All rights reserved.

Utilities -Breakdown of customers

Geographical FY21 Revenue

Client Concentration Top 10

by Revenue ($89.0m)

UK Market Segment FY21 Revenue

($54.6m)

•Bulb, in special administration in

UK, is a top 5 customer

•No other top 5 customers in SOLR

or on exit path

15
© Gentrack 2021. All rights reserved.

•ARR up 7.7% Driven by new customers moving into operation.

•NRR reduction due to Covid impact on the aviation industry.

Veovo Revenue Analysis

Veovo Revenue FY20 VS FY21

Veovo Revenue by Geography FY21 VS FY20

1

Committed Monthly

Recurring Revenues

(CMRR)

Non-contracted

Recurring Revenues

(TRR)

Non-recurring

Revenues (NRR)

Total Revenue

Down –10.7% on FY20

Annual

Recurring

Revenue

$11.2m

Up 7.7% on FY20 -

67.1% of total

Veovorevenue

$18.7m

$16.7m

Europe

Americas

APAC

Rest of

the world

1. Veovo geographies aligned with operating countries and continents and

therefore not aligned with Financial Statement.

16
© Gentrack 2021. All rights reserved.

Expenditure Analysis

•Personnel costs have increased due to

growth in headcount as we invest in

growth across the Utilities business

•Incentive payments including short term

cash incentives and longer-term share

schemes also a driver ofincreased

personnel costs.

•Driving a performance-based

organisation, using both a fixed and

variable reward structure forms a basis of

Gentrack’s remuneration strategy.

•The change in other costs is driven by

reduction in bad debt and other expenses

•No R&Dcapitalisationin FY'21 –

conservative approach. Included in group

expenditure of $12.7m.

Group Costs FY20 v FY21 (NZ$m)

NZ$m

17
© Gentrack 2021. All rights reserved.

Cashflow/Balance Sheet

•Cash generation of $9.2m further strengthening balance sheet

•Further improvements in working capital performance

•Nilutilisationof $20m debt facility, refinancing in advanced stages

EBITDA to Net Cashflow FY21 ($m)

01

October

2020

30

September

2021

Cash$19.3m$26.0m

Debt$2.5mNil

Net Cash$16.8m$26.0m

18
© Gentrack 2021. All rights reserved.

External Metrics –from Investor Day

NZ$MFY21

16 June

FY21

Actuals

FY24 *

Ta r g e t

ARR (=CRR+TRR)

~$80m$81.9m

>10% CAGR vs FY21

Total Revenue

>$100.5m$105.7m+~30% vs FY21

Strategic R & D Spend

~10%$12.7m**~15% x Total Revenue

Cash EBITDA

~10%12.0%

15-20% x Total Revenue

* FY24 target should be compared to FY21 guidance provided on 16 June 2021

** Total R & D spend of $12.7m in FY21

Notes/definitions:

1.CMRR –covers all contracted revenue both fixed (e.g. subscription, annual support) and variable (e.g. BMP variable revenue, Managed Service)

2.TRR –covers BAU service revenues which are contracted on an account by account basis on a collective degree of regularity.

3.ARR = CMRR+TRR

4.Strategic R&D definition (non-GAAP measure) –development of new strategic technology + enhancement of existing core

5.Cash EBITDA –EBITDA inclnon-cash share scheme costs, inclall R&D spend, excllease costs of property (corresponds to FY21 EBITDA of $12.7m)

•FY21 Actuals in line with or

above guidance provided at

16 June 2021. R&D spend

accelerating in FY22.

•FY24 targets remain as at 16

June 2021: upsides in some

areas of medium-term

revenue forecasts +

uncertainties in other areas,

further update at ASM

19
© Gentrack 2021. All rights reserved.

Outlook update

On 30 September 2021 Gentrack Group Limited (NZX/ASX: GTK) (“Gentrack”) advised that

itanticipated an increase in FY22 group revenues vs FY21.

Over the intervening 8 weeks we have seen further turbulence in the UK energy market

including the recent special administration of Bulb, a top 5 Gentrack customer.

In this context, Gentrack is pleased to reconfirm that FY22 group revenues are expected to

be ahead of the FY21 revenues of $105.7m announced today.

Gentrack is not providing earnings guidance for FY22.

Gentrack has confirmed no changes to the FY24 targets provided on 16th June 2021.

20
© Gentrack 2021. All rights reserved.

Q & A

21
© Gentrack 2021. All rights reserved.

GAAP to Non-GAAP Profit Reconciliation

NZ$m

Full Year

30 Sept 20

Audited

Full Year

30 Sept 21

Audited

Reported net (loss)/profit for the period (GAAP)

(31.7)3.2

Add:Net finance Expense

0.4(3.7)

Add:Income Tax expense

(2.6)2.4

Add: Depreciation and amortisation

12.410.8

Add: Revaluation of acquisition related financial liabilities

(0.9)0.0

Add: Impairment of goodwill and intangible assets

34.50.0

EBITDA

12.112.7

22
© Gentrack 2021. All rights reserved.

FY 21 on a Constant Currency Basis

NZ$mFY'20FY'21

FY'21

Constant

Currency

Difference vs

FY'20

Revenue

100.5105.7107.6

7.1

7.1%

Operating Costs

88.493.095.06.67.5%

EBITDA

12.112.712.60.5

4.1%

Statutory NPAT

(31.7)3.22.834.5

N/A

%

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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