Water Intelligence PLC Trading Update and Acquisition (4582N)
09 August 2017 - 4:00PM
UK Regulatory
TIDMWATR
RNS Number : 4582N
Water Intelligence PLC
09 August 2017
Water Intelligence plc
("Company" or the "Group")
1H Trading Update; Reacquisition of Northern Virginia
franchise
Water Intelligence plc (AIM: WATR.L), a leading provider of
precision, minimally-invasive leak detection and remediation
solutions is pleased to provide a trading update for the period
January to June 2017. The Group's Interim Results for the six
months ending 30 June 2017 are anticipated to be released early in
September. This update reaffirms the guidance provided in April
that the growth of the business is continuing to accelerate.
Trading Update. Through June, sales reached approximately $8.5
million representing 50% growth over the same period during 2016.
This growth path compares favourably with full year 2016 sales
growth of 38% (2015: 23%). Moreover, through June, the key drivers
underlying the Group's sales are also accelerating. Royalty growth
from the American Leak Detection ("ALD") franchise business is
running at approximately 10% reaching $3.2 million. Such royalty
income implies that system-wide sales for the franchise business,
from which royalty income is derived, are passing $80 million
notwithstanding the continued reacquisition of select franchise
territories. The acceleration in growth has been largely a result
of sales through national channels, led by insurance companies, as
well as continued strong local progress. Sales from ALD's corporate
stores are running at 70% growth reaching $3.1 million,
demonstrating our ability to accelerate growth in operating units
following reacquisition and additional investment. Further, UK
sales from NRW's municipal business continue to grow reaching $0.7
million for the first half of 2017. We expect to leverage this
business line through the ALD network, especially Australia, in
future periods. Profits before tax remain in line with
expectations, reflecting the Company's choice to fuel further
growth through reinvestment in both additional staff and marketing
efforts in order to capitalise on the market opportunity in its
geographies: United States, United Kingdom, Canada and
Australia.
New Reacquisition. The Group continues to fuel its corporate
growth strategy by selectively reacquiring franchisees from its
pool of $80 million in franchise sales. In June, the Group
reacquired its Indianapolis franchise and strengthened its growth
path in the Midwest towards launching a Chicago regional location
in 2018. On August 8, 2017 the Group reacquired its franchise
located in Northern Virginia. Revenue and earnings from that
franchise's operations will be added to corporate operations that
were launched in Washington D.C. during May and which have been
immediately profitable. Combined with Northern Virginia, there is a
critical mass of revenue and earnings for establishing a regional
corporate hub that will also support franchise operations located
in the mid-Atlantic states.
The Group continues to have sufficient cash reserves to execute
its growth plan. Cash at the end of June was a little over $1.0
million, which is consistent with year-end 2016 levels.
The 1H results provide the Group confidence that it should
continue with its "multinational growth" plan, a direction
indicated in the Outlook section of the Chairman's Statement for
the 2016 Report. As noted in the 2016 Statement, we continue to
believe that the milestone of $20 million in annual sales for Water
Intelligence is within sight, up from $7.2 million at year-end
2014.
Commenting on the Group's trading performance, Dr. Patrick
DeSouza, Executive Chairman of the Company, stated:
"We are pleased that sales growth continues to accelerate along
all key dimensions and that we are in range of tripling our level
of sales in three years. Importantly, we are maintaining healthy
levels of profitability despite significant investment in pushing
and sustaining our growth path. Because of the size and importance
of the market for water loss solutions, our goal remains to create
a valuable multinational growth company."
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information about this announcement please
contact:
Water Intelligence plc Patrick DeSouza, Executive Chairman Tel:
+1 203 654 5426
finnCap Ltd Adrian Hargrave / Giles Rolls / Alex Price (Corporate Finance)
Stephen Norcross (Corporate Broking) Tel: +44 (0)20 7220 0500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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