Modern Water PLC Trading Statement (5569W)

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RNS Number : 5569W

Modern Water PLC

02 August 2018

Modern Water plc ("Modern Water" or "the Company")

Trading Statement

Modern Water is pleased to announce strong progress in the 6 months ended 30 June 2018. Group sales are expected to be up over 20% on the same period last year with gross profit up over 35%. Overhead is flat on last year so that the loss after tax for the period is expected to have been reduced by c. GBP400k compared to H1 of 2017 (GBP1.8m).

Monitoring Division

Revenue is expected to be up almost 30% compared to the same period of 2017 and gross profit increased by 50%. This growth was driven by strong performances in both the USA and China.

The Division is expected to achieve cash-flow breakeven in 2018 despite a significant investment in building its local presence in China and investment in product upgrades, in particular of its best-selling toxicity product, the Microtox LX. The Division remains on track to launch the upgraded Microtox LX in the second half of the year.

Membrane Division

As a world-first, Modern Water's proprietary AMBC brine concentration plant was installed and commissioned at a site in India owned by Bodal Chemicals, the major international chemicals company.

In China, Modern Water announced its joint venture with Hangzhou Shangtuo Environmental Technology Co. Ltd. (trading as "Sunup") with the aim of driving sales of Modern Water's AMBC technology. The first plant for Sunup has been commissioned. Although no new AMBC sales were announced in the first half of 2018, management believes that all the pieces are now in place, including the appointment in the first half of a full-time international sales director, to drive this business forward.

Gibraltar

The Advance Works Contract with HM Government of Gibraltar for the WWTP (Waste Water Treatment plant) continues to progress well and both the Chief Minister and the Environment Minister reiterated their commitment to the project in their recent budget speeches.

Fabian Picardo, the Chief Minister, stated "we can expect to see ground broken during the course of this calendar year".

Equity Investment and Open Offer

As announced in early July, Modern Water's joint venture partner in China, Sunup has agreed to invest ca. GBP550k to buy a 5% stake in Modern Water plc, subscribing 11p per share. Sunup will also be granted a warrant per new share, exercisable within 12 months at 13p per share.

Upon foreign investment approval for the subscription by the local Chinese authorities and receipt of the monies, Modern Water will launch a 1 for 10 open offer of new shares at 11p per share, which is expected to take place following release of the interim results expected by early September.

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For further information:

 
 Modern Water plc                           [phone] 
 Simon Humphrey, Chief Executive Officer 
 
 WH Ireland Limited                         [phone] 
 Chris Fielding (Nominated Adviser) 
 James Sinclair-Ford 
 Tavistock                                  [phone] 
 James Collins 
 

Notes to editors

Modern Water designs and supplies advanced membrane systems using its world-leading membrane process technologies. The company also develops and supplies advanced systems for water monitoring. Its shares trade on the Alternative Investment Market of the London Stock Exchange.

www.modernwater.com

Budget speeches by HM Government of Gibraltar can be found here:

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Topical%20Speeches/Chief%20Minister%20Budget%20Speech%202018.pdf

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/Cortes%20Environment%20Budget%202018.pdf

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August 02, 2018 02:01 ET (06:01 GMT)