REG - Water Intelligence - Trading Update

Water IntelligenceAnnouncement

05/12/2023 07:15

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RNS Number : 6417V  Water Intelligence PLC  05 December 2023

 

Water Intelligence plc

 Trading Update: On-Track During the First Ten Months

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 Trading update for the ten month period ended 31 October 2023.

Update on Growth Strategy

·    Market demand for precision water and wastewater infrastructure
solutions continues to grow globally. During Q3, the Group renewed multi-year
municipal contracts in Australia and executed new municipal contracts in the
EU to grow the Group's presence internationally

·    In terms of execution, the Group will be completing in the US, during
Q1 2024, its implementation of Salesforce and related applications for its
scheduling, delivery and payments system to achieve operating scaleability and
efficiencies across corporate and franchise locations. Such enhanced execution
functionalities are expected to lead to gaining additional national insurance
contracts during Q4 for execution during 2024

·    Both EBITDA and PBT margins have improved despite higher inflation
and higher interest rates

·    In terms of investments to support growth, in October the Group
launched a new training, product assembly and R&D facility in Connecticut
to supply more trained technicians and specialized equipment to meet market
demand for solutions; the facility will also be a showcase to support the sale
of new American Leak Detection franchises for which there is current demand.

Financial Highlights for the ten month period ended 31 October 2023

·    Revenue increased by 6% to $64.4 million (2022: $60.9 million)

o Franchise royalty flat $5.8 million (2022: $5.8 million)

o Franchise-related activities (franchise sales, equipment sales,
business-to-business channels) increased by 9% to $9.7 million (2022: $8.9
million)

§ Insurance business-to-business channel grew by 9% to $9.1 million (2022:
$8.4 million)

o US Corporate sales increased by 5% to $42.6 million (2022: $40.4 million)

o International Corporate sales rose by 10% to $6.4 million (2022: $5.8
million)

·    Statutory PBT grew by 11% to $6.8 million (2022: $6.1 million)

·    Adjusted PBT (before non-cash expenses of amortization and
share-based payments; and non-core costs) increased by 14% to $8.7 million
(2022: $7.7 million)

·    Statutory EBITDA rose by 6% to $11.3 million (2022: $10.7 million)

·    Adjusted EBITDA (before non-cash share-based payments; and non-core
costs) rose by 9% to $12.6 million (2022: $11.6 million)

·    Adjusted PBT and Adjusted EBITDA Margins improve

o Adjusted PBT margins improve to 14% (2022: 13%)

o Adjusted EBITDA margins improve to 20% (2022: 19%)

·    Balance sheet strong at 31 October 2023

o Cash and equivalents at $17.2 million

o Bank Debt of $15.3 million and Deferred Acquisition Payments of $8.6 million
(combined $23.9 million) with payments spread through 2027 at a fixed interest
rate of approximately 5%

o Net Debt (including bank debt and deferred consideration) to Statutory
EBITDA TTM ratio: 0.58 (low degree of leverage affording significant financial
capacity for acquisitions)

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

"From an operational perspective, the Group has adjusted well during 2023 to
inflationary and higher interest rate headwinds. We are achieving profit
growth and increasing margins, as well as making investments for accelerating
sales growth in 2024 and beyond.  Moreover, we will be completing our
Salesforce implementation during Q1 2024 which will enable us to accelerate
the growth of our national sales channels.  To meet increased market demand,
we are launching an advanced training centre in Connecticut.  Importantly, we
have maintained a strong balance sheet and have additional financial capacity
to invest in organic growth and to execute accretive acquisitions to fuel
added revenue and profits.

We remain confident in our long-term growth prospects and our ability to
continue delivering value for both our franchise and corporate stakeholders.
In delivering on our growth plan, we appreciate the on-going support of our
shareholders."

 

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
 Rupert Walford

 Elizabeth Evans

 Daniel Saveski

 WH Ireland Limited - NOMAD & Joint Broker         Tel: +44 (0)20 7220 1666
 Hugh Morgan

 James Bavister
 Dowgate Capital Ltd - Joint Broker                                Tel:  +44 (0)20 3903 7715

Stephen Norcross

 

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