Water Intelligence PLC Q3 Trading Update (4046S)
December 21 2016 - 2:00AM
UK Regulatory
TIDMWATR
RNS Number : 4046S
Water Intelligence PLC
21 December 2016
Water Intelligence plc
("Water Intelligence", the "Group" or the "Company")
Q3 Trading Update
Water Intelligence plc (AIM:WATR.L) is a leading provider of
precision, minimally-invasive leak detection and remediation
solutions. The Group's strategy is to leverage its franchise sales
footprint across the U.S. and Commonwealth countries to be a
"one-stop" platform for residential, commercial and municipal
customers.
Water Intelligence is pleased to provide an update on trading
through the end of Q3. Our financial results continue as strongly
as we set forth in our interim results for the first half of 2016.
Revenue exceeded market expectations and through Q3 has actually
reached the same level as achieved for all of 2015. Profits before
tax have also grown and are in-line with market expectations,
despite significant investment to drive future profitability. We
will continue to invest in operations today to fuel even faster
2017 revenue growth so that we may exploit strong US market demand
for water and infrastructure solutions. Please see, on our web
site, the link to the Water Infrastructure Improvements for the
Nation Act signed by President Obama on December 16, 2016. Our 2016
transactions described below, particularly regarding our UK sewer
and wastewater company, put us in a better position to harvest such
market opportunity. Profit margins should also grow during 2017 as
a significant amount of 2016 expenses are one-time
transactions-related expenses.
Overall, 2016 has been a busy year with a three-pronged
corporate growth strategy. First, the franchise system has
continued to grow organically through the development of national
sales channels. We are executing in line with our interim results
for franchise royalty growth and we now exceed $75 million in
annualised system-wide sales to end-users. We have completed four
reacquisitions of franchisees in this period - South New Jersey,
Cincinnati, Northwest Arkansas and Sydney - deepening our approach
to developing a regional corporate presence from which to grow the
existing franchise system. Such reacquisitions also directly add
critical mass to revenue and earnings as our corporate stores
continue to execute strongly in line with our interim results.
Arkansas and Sydney were closed in Q4 and their results are not
included in this trading update. Even without their inclusion,
sales from corporate-run operations through Q3 have exceeded sales
from corporate stores for all of 2015. Finally, we acquired a fast
growing UK municipal sewer and wastewater company that will be able
to layer its solutions onto our franchise system across the US,
Australia and Canada and provide water infrastructure solutions.
This transaction closed in September and only an initial, strong
month was included in the Q3 results.
Since the end of Q3, the Company has completed both a round of
equity financing at a price that represented a premium to market
and a new, broader bank financing putting the Company in position,
as noted above, to accelerate its growth strategy in 2017.
Commenting on the Group's trading performance, Dr. Patrick
DeSouza, Executive Chairman of the Company, stated:
"We are encouraged by the above results as we accelerate our
efforts to build a multinational growth company that provides
solutions to meet the strong demand for water and infrastructure
solutions. Through Q3 we have exceeded our turnover targets twice
and expanded our organization to support such growth whilst
continuing to be "in-line" with market expectations on profits
before tax. We appreciate the confidence shown by new investors and
a new more robust banking relationship."
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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