REG - Water Intelligence - Q1 Trading Update

Water IntelligenceAnnouncement

16/05/2024 07:00

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RNS Number : 6287O  Water Intelligence PLC  16 May 2024

Q1 Trading Update: Sales and Profit Growth

Water Intelligence plc (AIM: WATR.L) (the "Group" or "Water Intelligence"), a
leading multinational provider of precision, minimally-invasive leak detection
and remediation solutions for both potable and non-potable water is pleased to
provide its unaudited Q1 Trading Update for the quarter ended 31 March 2024.

The Group continued its solid growth trajectory in terms of both revenue and
profits. Margins remained firm despite continued inflationary pressures on
labor and materials.  Subsequent to the quarter, the Group executed
transactions that are expected to provide growth momentum for 1H.

Financial Highlights / KPIs

·    Revenue increased by 6% to $20.5 million (Q1 2023: $19.4 million)

o Franchise royalty remained flat at $1.9 million (Q1 2023: $1.9 million)

o Franchise related sales (franchise sales, equipment sales,
business-to-business channels) declined by 12% to $2.8 million (Q1 2023: $3.2
million)

o US Corporate locations increased by 11% to $13.6 million (Q1 2023: $12.3
million)

o International Corporate locations rose by 5% to $2.1 million (Q1 2023: $2
million)

 

·    Profit Before Tax (Statutory) grew by 14% to $2.0 million (Q1 2023:
$1.75 million)

·    Profit Before Tax Adjusted (before non-cash expenses of amortization
and share-based payments; and non-core costs) increased by 8% to $2.5 million
(Q1 2023: $2.3 million)

 

·    EBITDA rose by 9% to $3.5 million (Q1 2023: $3.2 million)

·    EBITDA Adjusted (before non-cash share-based payments; and non-core
costs) rose by 9% to $3.8 million (Q1 2023: $3.5 million)

 

·    EBITDA margins at 17.0% (Q1 2023: 16.7%) remained firm, slightly
increasing despite persistent inflation in the US

·    EBITDA Adjusted margins at 18.5% (Q1 2023: 18.1%)

 

·    Balance sheet strength at 31 March 2024

o Cash at $12.7 million

o Bank Debt and Deferred Acquisition Payments at $19.9 million with payments
spread through 2027 at a fixed interest rate of approximately 5%

Corporate Development

·    On February 1, the Group announced two new national insurance
contracts: i) a multi-year extension of a current national insurance customer;
and ii) a new national customer that is a leader in the high-end residential
and property management market

·    On February 15, the Group announced the reacquisition of its
Pittsburgh, Pennsylvania franchise that is part of its ALD subsidiary

Subsequent Events

·    On May 9, the Group announced the reacquisition of its Fresno,
California franchise

·    On May 9, the Group announced the sale of a new franchise in Albany
and Saratoga, New York

Commenting on the Group's performance, Executive Chairman, Dr. Patrick DeSouza
remarked:

"We continue to navigate stagflationary pressures in the US with success.  We
are expecting that all of our investments - from new offerings like ALD Water
Management Solutions and Pulse to our Salesforce operating system and video
commerce technology - will start to contribute to new sources of organic
growth as we progress through the next two quarters.  We also believe there
to be attractive opportunities for accretive acquisitions and our balance
sheet and credit facilities will enable us to execute our growth plan fully."

 The information contained within this announcement is deemed to constitute
 inside information as stipulated under the retained EU law version of the
 Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
 law by virtue of the European Union (Withdrawal) Act 2018. The information is
 disclosed in accordance with the Company's obligations under Article 17 of the
 UK MAR. Upon the publication of this announcement, this inside information is
 now considered to be in the public domain.

 Enquiries:

 Water Intelligence plc

 Laura Bass, Director of Strategic
 Finance
 Tel: +1 203 584 8240

 Grant Thornton UK LLP - Nominated Adviser
                    Tel: +44 (0) 20 7383 5100

 Philip Secrett

 Harrison Clarke

 Ciara Donnelly

 RBC Capital Markets - Joint
 Broker
 Tel: +44 (0)20 7653 4000

 Jill Li

 Elizabeth Evans

 Daniel Saveski

 Dowgate Capital Ltd - Joint Broker

 Tel: +44 (0)20 3903 7715

 Stephen Norcross

 

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