Good morning, it's Paul here.

My apologies that yesterday's article, a car dealerships special, was anything but special - actually it blew its head gasket immediately after leaving the showroom. Sorry about that, I got writer's block & there was nothing forthcoming unfortunately. So some time today has been allocated for me to go back & finish it.

Firstly I'll rattle through the handful of trading updates today from small caps.

Water Intelligence (LON:WATR)

Share price: 200p (up 11.4% at 08:10)
No. shares: 12.07m
Market cap: £24.1m

Q4 trading update & corporate development

Water Intelligence plc (AIM: WATR.L), a leading multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water is pleased to provide a trading statement for the year ended 31 December 2017.

We are also including an update on our corporate development as we expand our offerings to become a "one-stop" platform with a variety of cross-selling opportunities....

My first job is to look up "potable" in the dictionary! For anyone else who hasn't heard that term before, it means drinkable.

Key points;

  • Strong revenue growth - up 45% to $17.7m (note that this is a mainly USA business - 88% of H1 revenues came from USA)
  • Growth mainly came from corporate (i.e. own-operated), rather than franchisees.
  • Insurance channel looks an interesting growth area - revenues rising from $0.66m in 2016, to $2.5m in 2017;
Insurance channel momentum: first national account implemented; second account signed and in process of implementation; pipeline developing

  • Adjusted PBT rose 21% to $1.7m
  • Tax cuts - in USA should increase PAT in 2018 & beyond
  • Water loss is an increasingly important issue, globally (e.g. forest fires, Cape Town apparently close to running out of water)
  • Net debt $1.2m

Outlook - rather long-winded, but this is the key bit;

Global market demand for our solutions is increasing given climate issues and natural resource constraints. The wind is at our back, and we hope to make a difference. We believe that 2018 will bring significant additional revenue growth, both organically and through selected re-acquisition of our franchises.

Profits should also be further enhanced by recent tax legislation in the US, which is expected to materially reduce the Company's tax rate during 2018 and beyond.

Broker update - these days (post the…

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