Water Intelligence PLC Q4 Trading Update and Year-End Corporate Items (3856W)
February 09 2017 - 1:00AM
UK Regulatory
TIDMWATR
RNS Number : 3856W
Water Intelligence PLC
09 February 2017
Water Intelligence plc
("Water Intelligence", the "Company" or the "Group")
Q4 Trading Update and Year-End Corporate Items
Water Intelligence plc (AIM:WATR.L), a leading provider of
precision, minimally-invasive leak detection and remediation
solutions is pleased to provide a trading statement for the year
ended 31 December 2016. The Company expects to announce its final
results for the year ended 31 December 2016, on or around 9 May
2017.
Trading Update
The Company's strong financial performance referred to in the Q3
Trading Update on 21 December 2016, continued for the remainder of
2016. Revenue growth exceeded market expectations within all sales
channels, including newly acquired UK-based NRW Utilities, with
total revenues for the year of $12.2m (2015: $8.8m) with adjusted
profit before tax in-line with market expectations. During the
period, the Company incurred upfront investment costs that will
drive future profitability, as well as significant one-time costs
such as legal fees incurred with the various corporate activities
undertaken in 2016, including share capital reorganisation, four
franchise reacquisitions and the acquisition of NRW Utilities.
Profit margins are expected to grow during 2017 with a full year of
trading from the 2016 acquisitions, together with continued organic
growth.
Sales for our services - whether delivered by a franchise
location or by a corporate location - grew strongly and exceeded
$75 million. Each segment, franchise and corporate, worked
synergistically. First, the evolution of our business to business
insurance channel fed additional jobs to the entire franchise
system. As announced recently, we will be more formally tracking
our business-to-business channels. Franchise royalties continued to
grow at recent historical rates of approximately 6% despite a
reduction in the number of franchisees resulting from the Company's
reacquisition programme. Second, corporate stores sales - both
current stores and newly acquired stores - grew strongly passing
the $4 million level. Such growth was achieved, to a greater degree
organically, from locations acquired during 2015 rather than from
contributions from 2016 reacquisitions. Finally, parts and
equipment sales once again grew in double digits representing
reinvestment confidence in our plan by our franchisees.
Importantly, the Company is now growing on both sides of the
Atlantic. UK-based NRW had a strong Q4 providing sewer and
wastewater services to Thames Water while building a base of leak
detection services in the UK.
As noted above, the Company made investments in people and
physical locations during the second half of 2016 to support
continued strong growth in 2017 and beyond. The addressable market
for water and infrastructure services is expected to grow around
the world but particularly in the U.S. The Company's current cash
position is strong with approximately $1 million and net debt at
the period end of $0.8 million. As a result of this and the new
banking facility executed in December, the Company has the
financial resources to continue its focus on growth and the capture
of increasing market demand.
Corporate Items
Following the appointment of John Weigold to the board, the
Company has awarded him options for 60,000 ordinary shares
125p.
In addition, given NRW has exceeded revenue and profits
expectations during Q4, the Company has agreed to make an advance
payment of GBP110,000 of the remaining GBP300,000 in deferred
acquisition payments due to the founders of NRW Utilities over the
next two anniversary dates of last September's transaction.
The Company also corrects an error in the amount of shares
repurchased by the Company from certain minority shareholders
announced on 9 January 2017. The Company acquired 97,456
Consideration Shares, instead of the 99,936 Consideration Shares
originally announced and as such holds 71,120 ordinary shares of 1
penny each in treasury. The Company's total issued share capital
remains unchanged at 12,073,833 Ordinary Shares and the total
number of voting rights in the Company, excluding Treasury shares,
is 12,002,713.
Commenting on the Group's trading performance, Dr. Patrick
DeSouza, Executive Chairman of the Company, stated:
"We achieved a lot during 2016 that point to a strong 2017:
Sales growth was fed both organically through the development of
business to business channels and through buying back selected
franchises. Unlike typical acquisitions, we already knew our
candidates - franchisees in strategic regions of the U.S. and
Australia and a growing water infrastructure services company in
the UK with whom we had sub-contracted leak detection work
historically. 2015 franchisee reacquisitions performed well. Early
indications are that our 2016 decisions will reinforce our
capabilities to sustain strong growth and build a multinational
company that takes advantage of market tailwinds for this
sector."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 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 (Corporate Finance)
Stephen Norcross (Corporate Broking) Tel: +44 020 7220 0500
1. Details of the PDMR / person closely
associated
--- ---------------------------------------------------------
a) Name John Weigold
--- ------------------------------ -------------------------
2. Reason for the notification
--- ---------------------------------------------------------
a) Position / status PDMR
--- ------------------------------ -------------------------
b) Initial notification Initial notification
/ amendment
--- ------------------------------ -------------------------
3. Details of the issuer, emission allowance
market participant, auction platform,
auctioneer or auction monitor
--- ---------------------------------------------------------
a) Name Water Intelligence
plc
--- ------------------------------ -------------------------
b) LEI N/A
--- ------------------------------ -------------------------
4. Details of the transaction(s): section
to be repeated for (i) each type
of instrument; (ii) each type of
transaction; (iii) each date; and
(iv) each place where transactions
have been conducted
--- ---------------------------------------------------------
a) Description Options over ordinary
of the financial shares of GBP0.01 each
instrument, in Water Intelligence
type of instrument plc
Identification GB00BZ973D04
code
--- ------------------------------ -------------------------
b) Nature of the Issue of Options
transaction
--- ------------------------------ -------------------------
c) Price(s) and 60,000 options with
volume(s) an exercise price of
125 pence
--- ------------------------------ -------------------------
d) Aggregated information N/A (Single transaction)
* Aggregated volume
* Price
--- ------------------------------ -------------------------
e) Date of the 7 February 2017
transaction
--- ------------------------------ -------------------------
f) Place of the London Stock Exchange
transaction (XLON)
--- ------------------------------ -------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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