Water Intelligence Share Discussion Threads

[ariane] 10/5/2023 07:44

10 May 2023

Water Intelligence plc

Q1 Trading Update: Strong Growth Across Operating and Financial Measures

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 unaudited Q1 Trading Update for the quarter ended 31 March 2023.

Overview of Growth Strategy

-- Market demand for precision water and wastewater infrastructure solutions continues to grow with the Group's strategic plan centred on capturing a greater share of this increased market demand by driving sales through Corporate, Franchise and Business-to-Business Channels (Key Performance Indicators or "KPIs")

-- The Group continues its implementation of Salesforce.com for its scheduling, delivery and payments system in the U.S. to achieve operating scaleability and efficiencies across corporate and franchise locations

-- The Group continues to selectively reacquire franchises in strategic locations to unlock additional shareholder value from its core American Leak Detection brand ("ALD"), which represents over $100 million in annual franchise gross sales

Operating Performance

-- Water Intelligence achieved a strong revenue and profit performance during the quarter

o The Group delivered growth for each KPI driver: Corporate (US and International), Franchise and Business-to-Business sales

-- Network Sales (corporate direct sales and franchise gross sales from which royalty income is derived) for the quarter grew 10% to $45.5 million (Q1 2022: $41.4 million)

-- The Group executed a strategic franchise reacquisition in Nashville, Tennessee adding operational scale in the Midwest of the United States

-- The balance sheet position remains robust, positioning the Group strongly to continue to execute on its growth plans

Financial Highlights / KPIs

-- Revenue increased by 18% to $19.4 million (Q1 2022: $16.5 million)

o Franchise royalty grew by 5% to $1.9 million (Q1 2022: $1.8 million)

o Franchise related activities (franchise sales, equipment sales, business-to-business channels) increased by 22% to $3.2 million (Q1 2022: $2.6 million)

-- Insurance business-to-business channel grew by 23% to $3.1 million (Q1 2022: $2.5 million)

o US Corporate locations increased by 18% to $12.3 million (Q1 2022: $10.5 million)

o International Corporate locations rose by 26% to $2 million (Q1 2022: $1.6 million)

-- Profit Before Tax (Statutory) grew by 28% to $1.8 million (Q1 2022: $1.4 million)

-- Profit Before Tax Adjusted (before non-cash expenses of amortization and share-based payments; and non-core costs) increased by 12% to $2.3 million (Q1 2022: $2.1 million)

-- EBITDA (Statutory) rose by 23% to $3.2 million (Q1 2022: $2.6 million)

-- EBITDA Adjusted (before non-cash share-based payments; and non-core costs) rose by 11% to $3.5 million (Q1 2022: $3.1 million)

-- Balance sheet strength at 31 March 2023

o Cash at $19.4 million

o Bank Debt and Deferred Acquisition Payments at $29.3 million with payments spread through 2027 at a fixed interest rate of approximately 5%

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

" We are pleased with how we have started in 2023. Our resilient business model and compelling customer value proposition enabled us to deliver a strong performance in Q1, against a difficult market backdrop of high inflation and rising interest rates. We have a high-quality management team and market demand remains strong for our minimally-invasive solutions for aging water and wastewater infrastructure. We remain confident in our long-term growth prospects and our ability to continue delivering value for our stakeholders.

For 2H 2023 and 2024, we are focused on delivering the benefits of investments made in prior years to reinforce our long-run growth trajectory by: commercialising new technology solutions for our customers; hiring and training more technicians to meet market demand; and completing implementation of the leading customer relationship management system to automate operations, support scaleability and enhance data security.

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.

[scepticalinvestor] 10/5/2023 07:42

Pe in the 20s. Will wait until it gets to the 2s

[pugugly] 10/5/2023 07:18

Dull as ditch-water: Trying hard but (imo) not there yet.

[scepticalinvestor] 10/5/2023 07:13

Back to the 3s

[grupo guitarlumber] 23/4/2023 10:40

even if previously posted, thanks PUG

Have a great day and a successful trading week





Support still set at 415p it seems

[pugugly] 23/4/2023 10:08

2 links = May already have been posted. If not well worth a read.

UN warns against 'vampiric' global water use


Flagship UN report extolls win-win water partnerships to avert global crisis

[dudishes] 19/4/2023 17:39

Up the creak here and cannot find the paddle!

[the grumpy old men] 17/4/2023 04:56

Risk of further slips towards 415p this week until water flows back into favour

Perhaps May results will be a positive turning point unless profits watered down

Could do with more analysts covering company giving realistic share price targets

good luck all

[waldron] 11/4/2023 05:44

Understanding water risk essential for almost all businesses: AXA XL

11th April 2023 - Author: Kane Wells

In a recent report outlining how firms can manage key water-related threats, researchers at AXA XL suggested that understanding water risks is essential for almost all businesses, regardless of the sector.

Citing the international non-profit CDP, AXA XL states that the cost to businesses of inaction on water risks is 5x higher than the cost of action, yet still, water security remains under-represented in the public debate on climate change.

Suzanne Scatliffe, Global Sustainability Director, AXA XL, said, “Creating a water-secure world requires water resources to be protected and properly managed, which is why it’s more essential than ever that water is at the forefront of corporate climate strategies.”

AXA XL’s report focuses on a range of high-risk sectors within its client base and presents how those sectors may be impacted by three types of water risks.

The first of these the firm highlights are physical risks, such as water scarcity, climate change and threats, poor water quality and pollution of water resources, flooding, and poor management of water resources.


Regulatory risks are the second example and include higher water prices, regulation of effluent quantity and quality, statutory water withdrawal limits, and regulatory uncertainty.

The last type is reputational risk, which encompasses negative media coverage and public scrutiny, changes in consumer loyalty and loss of market share due to litigation and damage to brand.

AXA XL states that using water footprinting and accounting can help organisations see hidden water consumption and assist in managing the impact on water resources.

Further, to build a strong case for investing in water-saving technologies and strategies, the researchers note that companies need to accurately evaluate the full costs of water.

This includes reflecting the true costs of consumption, treatment, abstraction, and supply.

AXA XL explains that there is already significant reporting of water-related risks, though more can be done.

The firm suggests that it is vital that companies consistently monitor progress and communicate risks.

It writes, “Companies can manage business risks by developing a future scenario analysis to consider the impact water risks could have on environmental and socioeconomic changes.

“Businesses can learn from water stewardship procedures by utilising available data and developing best practices.

“AXA XL is committed to helping organisations to improve their understanding of water-related risks and how they impact business operations. This new report aims to support businesses of all sizes to understand different types of sector-specific water risks and catalyse action with a series of recommended solutions and tools.”

[systemsthinker] 10/4/2023 15:32

Smithie6:
My point wasn't philanthropic. When I say I want the WATR board to get some evangelistic enthusiasm, I mean I want them to sound like they believe in their own self stated mission, which is:

"...a leading multinational water infrastructure solutions company whose mission is to safeguard the world’s most precious resource."

It's not enough just to have a glib line like this on a website. Overall, I've heard shoe salesmen with more ambition and sense of purpose.

It's not about how much water there is, it's about where it is, the costs of accessing it, processing it, preserving it and disposing of it. Water is not cheap. Also, 'rubbish about saving the planet' such as unnecessary wastefulness, DOES these days resonate with paying consumers and governments, so can't be ignored.

Potable or non-potable are part of the same System, it's a cycle of Input->Transform->Output, which is a reason why potable and non-potable are not separate subjects. Utility companies deal with both, for a reason, it's pretty standard.

Admittedly, Water Intelligence are at the 'cleaner' end of 'the worlds most precious resource', but it seems if they had real ambition to be a "...company that is transforming aging water infrastructure" they'd be shouting a lot harder about it. It's a service that's badly needed by end customers and utility companies. The utilities are also getting government pressure to get their act together (at last).

Anyway, the consensus on here seems to be hold and, frustratingly, I agree. With a bit more ambition and energy from WATR, I'd personally BUY.

[pugugly] 10/4/2023 10:57

A lot of investment managers apparently (subject to when they initially bought) well under water. Valuation still looks too high - Reading this as a utility company using software in its business so should be rated as a support services/utility co rather than IT (imo)

Waldron: Agreed with your wait and see policy.

[waldron] 10/4/2023 09:18

Shareholders

Name Equities %

Patrick Jude DeSouza 5,026,174 29.0%

Plain Sight Systems, Inc. 2,430,000 14.0%

Canaccord Genuity Wealth Ltd. 2,134,432 12.3%

Joh. Berenberg, Gossler & Co. KG (Investment Management) 1,216,691 7.01%

Amati Global Investors Ltd. 814,660 4.69%

Amati Global Investors Ltd. (Venture Capital) 801,311 4.62%

Terry Tyrell 703,915 4.06%



EDIT NOT MUCH OF A FREE FLOAT IT SEEMS

George Yancopoulos 656,166 3.78%

Herald Investment Management Ltd. 642,000 3.70%

Harwood Capital LLP 604,500 3.48%

[waldron] 10/4/2023 09:11

Certainly a wait and see situation


Calendar

May/17 Earnings Release


FWIW Best to await earnings release, a HOLD in my view

Niether a Buy or Sell at this juncture

What with 1 analyst abstaining from a view, the other 2 if truth be known do not know what to expect

Have a great day

chuckle and cheers

[waldron] 10/4/2023 09:05

Apparently a strong support at 415p

[grupo] 09/4/2023 17:00

welcome ST

Lets await the next pack of news and see where we go from there

In the meantime enjoy the long weekend

Will take a peek here again during the week

keep safe

[systemsthinker] 09/4/2023 16:49

Qualitative Judgement!

I’m 50-50 as to whether investing in Water Intelligence PLC was a mistake (Feb 23).

On one hand, water is the world’s most valuable commodity after air, in the UK the utility industry is facing much stricter regulations and bigger fines for wasted water and there is general public uproar about endless leaks of sewage into rivers and seas.

So! A leak fixing business currently seems like a great investment and, what’s more, it’s a force for environmental and social good – an earner *and* a cause you can get passionate about!

Sadly though, on the other hand, the company itself feels very undynamic and uncommitted to the cause. On the functional and dated-looking website, there’s a token mission statement about ‘safeguarding the worlds most precious resource’ but then it’s just routine corporate stuff.

It concerns me that most of the leadership team apparently don’t have a background in what’s purportedly their Primary Activity. I.e. only one of the 13 strong Leadership Team even mentions the word ‘water’ in their online resume. Surely I’m not the only one who thinks this is weird?!? The word ‘environment’ isn’t even mentioned at all…

It’s no wonder they’re not evangelizing for the cause. There’s a world of difference between blandly ‘fixing leaks’ and being ‘A Leader at Saving the Planet’s Most Precious Resource’. Shouldn’t Water Intelligence PLC have ambitions to be absolutely *synonymous* with the latter???

Anyway, now I’ve got them I’ll hold the shares for a couple of years before next review. In the meantime, hopefully they’ll either get bought out by someone more lively OR get someone onto the Leadership Team with some evangelistic, contagious enthusiasm for their actual 'purpose' that will spread to the rest of management, employees, shareholders and end customers…

[grupo] 09/4/2023 15:43

Welcome ST

WE already have a WATR Thread





cheers fella

[systemsthinker] 09/4/2023 14:43

!FOLLOWFEED
I’m 50-50 as to whether investing in Water Intelligence PLC was a mistake (Feb 23).

On one hand, water is the world’s most valuable commodity after air, in the UK the utility industry is facing much stricter regulations and bigger fines for wasted water and there is general public uproar about endless leaks of sewage into rivers and seas.

So! A leak fixing business currently seems like a great investment and, what’s more, it’s a force for environmental and social good – an earner *and* a cause you can get passionate about!

Sadly though, on the other hand, the company itself feels very undynamic and uncommitted to the cause. On the functional and dated-looking website, there’s a token mission statement about ‘safeguarding the worlds most precious resource’ but then it’s just routine corporate stuff.

It concerns me that most of the leadership team apparently don’t have a background in what’s purportedly their Primary Activity. I.e. only one of the 13 strong Leadership Team even mentions the word ‘water’ in their online resume. Surely I’m not the only one who thinks this is weird?!? The word ‘environment’ isn’t even mentioned at all…

It’s no wonder they’re not evangelizing for the cause. There’s a world of difference between blandly ‘fixing leaks’ and being ‘A Leader at Saving the Planet’s Most Precious Resource’. Shouldn’t Water Intelligence PLC have ambitions to be absolutely *synonymous* with the latter???

Anyway, now I’ve got them I’ll hold the shares for a couple of years before next review. In the meantime, hopefully they’ll either get bought out by someone more lively OR get someone onto the Leadership Team with some evangelistic, contagious enthusiasm for their actual 'purpose' that will spread to the rest of management, employees, shareholders and end customers…

[dudishes] 30/3/2023 09:38

Tks W,

Wins elsewhere mean that I can stick with it for now.

cheers

[waldron] 30/3/2023 09:12

Support apparently set at 415p

The 3 analysts believe the share price substantially undervalued, LOST ONE ,THEN THERE WAS 2

Nice move up this morning but no real news per se

Noticed that perhaps sector back in vogue as Veolia has moved up also

Reporting on the WORLD WATER CONFERANCE MAY HAVE INFLUENCED PEOPLES INTEREST AND THEREBY THE SP

[walterbadger] 28/3/2023 16:32

The steep and long fall in the share price is surely overdone and not justified. There must come a time soon when the downward trend will be reversed.

[epo4eva] 28/3/2023 11:51

Looks like the fund seller my have gone. 40plus new technicians trained and ready to go from our training facility. Onwards and upwards from here.

[pugugly] 24/3/2023 13:46

Company wrongly classified (imo) More like SUPPORT SERVICES Co that uses software in its business of checking for water leaks etc - So a forweard pe of possibly 8-10 might be in the right area,