REG - Water Intelligence - Q1 Trading Update: Accelerating Growth Plan

Water IntelligenceAnnouncement

09/05/2022 07:00

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RNS Number : 7031K  Water Intelligence PLC  09 May 2022

Water Intelligence plc

 Q1 Trading Update: Strong Sales and Accelerating Growth Plan

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.

Corporate Overview

Following its Q4 2021 fund raise, the Group has accelerated its strategic
growth plan through new investments geared to capture additional market share
and increase profitable growth in H2 2022 and beyond.  The Group has
accelerated its headcount investment during Q1 ahead of a much busier Q2 and
Q3 summer season.

Q1 2022 has been marked by: (i) hiring and training of more than 60 headcount
(managers and technicians) to meet increasing market demand; (ii) establishing
a new training centre for technicians in Seattle; (iii) implementing the
Group's set of Salesforce and related applications to enable scalability and
efficiency; (iv) opening "greenfield" locations in Texas and New York and (v)
continuing to reacquire its American Leak Detection franchises including Fort
Worth, Texas announced 19 January.

Financial Highlights

·    Water Intelligence sales growth of 44% to $16.5 million (Q1 2021:
$11.4 million)

o 26% organic growth of corporate locations owned prior to Q1 2021 (Q1 2022:
$7.1 million vs. Q1 2021: ($5.6 million)

·    Adjusted EBITDA* grew 26% to $3.0 million (Q1 2021: $2.4 million)

·    EBITDA increased 9% to $2.6 million (Q1 2021: $2.4 million)

·    Adjusted PBT** grew 16% to $2.1 million (Q1 2021: $1.8 million)
despite accelerated investment spending

·    Statutory PBT declined 17% to $1.4 million (Q1 2021: $1.7 million)
reflecting one-time costs footnoted below

·    Balance Sheet is strong with net cash of $10 million and further
liquidity from undrawn debt facilities of $8 million

*Adjusted EBITDA adds back one-time costs of approximately $400,000 from (i)
Salesforce training and implementation and (ii) Australian extreme rain and
flood conditions limiting service delivery ("One-Time Costs")

**Adjusted PBT adds back (1) One-time Costs as per Adjusted EBITDA and (2)
non-cash costs of share-based payments and amortization

 

Corporate Development Highlights

·    $17 million credit expansion with M&T Bank at a fixed rate of
approximately 5.5% with repayment through 2027 to support franchise
reacquisitions

·    Strategic franchise reacquisition of Fort Worth, Texas

·    Launch of "greenfield" corporate locations in Long Island, New York
and Wichita Falls, Texas

·    Training Centre launched in Seattle to train more leak detection
specialists

Release of 2021 Audited Results

The Group expects to announce its audited results for 2021 during late May as
traditionally released.

 

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

"Our strategic plan for the last decade has been and continues to be focused
on creating a world-class growth company that provides solutions to water loss
from deteriorating infrastructure - residential, commercial, municipal. And we
are delivering both organic growth and acquisition-led growth in line with our
plan. With the support of our institutional investors, we are accelerating our
investment in growth by adding more execution personnel and training centres
to expand our current multinational operational footprint.  Moreover, we are
automating our business with the rollout of Salesforce and associated
applications to increase efficiency and scalability as we add more execution
personnel.  Finally, we are continuing to complement organic growth with
acquisition-led growth from our own franchise businesses and third-party
solution providers.

We are confident in these investments given increasing global market demand
for minimally-invasive solutions to aging infrastructure and water scarcity
from changing climate conditions.  Our confidence stems from our strong
foundation: (i) an installed base of approximately $150 million in gross sales
by corporate operations and franchisees under our core American Leak Detection
brand, (ii) more than 150 locations across the US and in the UK, Australia and
Canada and (iii) a matrix of proprietary technology solutions for clean water
and wastewater problems."

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

Enquiries:

Water Intelligence plc
 Patrick DeSouza, Executive Chairman               Tel: +1 203 654 5426
 RBC Capital Markets - Joint Broker                Tel: +44 (0)20 7653 4000
 Jill Li
 WH Ireland Limited - NOMAD & Joint Broker         Tel: +44 (0)20 7220 1666
 Chris Hardie
 Ben Good
                                                                  Tel:  +44 (0)20 3903 7715

 Dowgate Capital Ltd - Joint Broker

Stephen Norcross

 

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