Water Intelligence (LON:WATR), a leading multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water has today provided its Interim Results for the six months ended 30 June 2019.
Results are ahead of market expectations for annual revenue and comfortably in-line with expectations for profit before tax. The Company continues to perform strongly on its growth plan based on key performance indicators identified in more detail in the Strategic Report to the Annual Accounts with 1H KPI results discussed herein.
Financial Highlights
- Total revenue for the period increased 34% to $15.87 million (1H 2018: $11.80 million)
- Three-year 1H CAGR (compounded annual sales growth) of 42% (1H 2016: $5.57 million)
- Major revenue streams growing strongly and consistently with over $50 million in sales in 1H to third parties (direct sales from corporate operations and gross sales to customers from which franchise royalty income is derived)
· Profit before tax comfortably in-line with analyst expectations
- Statutory profit before tax up 20% to $1.51 million (1H 2018: $1.26 million)
- Profit before tax adjusted for non-core and share-based payments up 29% to $2.02 million (1H 2018: $1.57 million)
- Continued investment in hiring and technology R&D
· EPS Growth
- Adjusted 1H EPS up 17% to 10.6 cents (1H 2018: 9 cents)
- Statutory 1H EPS up 8% to 7.9 cents (1H 2018: 7.3 cents)
· Balance sheet strong
- Cash and equivalents remain strong at $6.03 million (1H 2018: $6.15 million)
- Net Cash at $2.17 million (cash minus borrowings) Corporate Developments
Strategic Highlights
· £3.2 million oversubscribed placing ato facilitate growth plan
· Business-to-Business Channel grows across United States:
- Addition of another leading national insurance customer
- Addition of a leading national home services customer
· UK-based Water Intelligence International accelerates municipal work in the United States
· Laura Hills promoted to Vice Chairman
· Technology Advances (Subsequent Events during Q3)
- First commercial use of proprietary Orca product at UK utility for sewer and wastewater diagnostics; roll-out expected during Q4 in the United States
- Strategic relationship with Entertainment AI (EAI), through an equity investment, as well as an agreement for Water Intelligence to benefit from a royalty-free license to use EAI’s technology, which accelerates WI’s capabilities for on-line sale of water diagnostic products that insurance companies and home services customers promote complementing WI’s leak detection services business; see www.waterintelligence.co.uk for illustration.
Franchise Reacquisitions – enabling the Group to add scale financially and operationally:
· On 5 February 2019, the Group announced the reacquisition of its Ontario (Niagara) franchise
· On 7 March 2019, the Group announced the reacquisition of its South Atlanta and Southern Georgia franchise
· On 28 March 2019, the Group announced the reacquisition of its Orlando Florida franchise
· On 13 June 2019, the Group announced the reacquisition of its Tucson Arizona franchise
Dr. Patrick DeSouza, Executive Chairman of Water Intelligence, commented:
“We are pleased, once again, with our consistency of delivery. We had strong results in the first half with strong organic growth, a healthy balance sheet and continued multinational expansion of operations. Q3 has also started well. The Group has delivered strong EPS growth while still making investments to sustain our growth trajectory over the next three to five years.
Given the strong global market demand for water and infrastructure services, we remain confident about the future and our ambition to transform the water infrastructure services sector and deliver real value to our shareholders.”
