I would have to say this company is still a wait and see for me....

I would have to say this company is still a wait and see for me. It looks like they are moving in the right direction, but I suggest they are really in a consolidation period and the decisions they make will have a material impact on their future going forward. They do have cash and a good customer base but the reason I see them stagnated and in a period of consolidation are:

• Revenue has not grown materially and if you drill down into regions the rest of the world has decreased and overall SAAS and licence fees have decreased whilst project services and government grants have increased marginally so overall recurring revenue has decreased (note 2 & 3)
• They have not capitalised any costs in the reporting period. This is a massive issue from a platform point of view and indicates all staff are working on software defects (Note 15)
• They have indicated they have employed 50 devops staff in India which indicates that is where they will replatform. That could mean significant risk as customers will need to upgrade to a much newer platform. The customer base may or may take the opportunity to look at other options and they will be exposed as they have a legacy platform until they replatform
• Two of their customers have entered supplier of last resort processes and another Genesis Energy has not selected Gentrack for renewal. This means their future revenues will be impacted and they will need to replace those accounts with new logos

A lot will depend on their strategy going forward and I note they have said they will present this on June 16 so for me it is a wait and see.

Their strategy going forward is what we really need to understand to see whether this is a good investment.