TIDMWATR
RNS Number : 8602A
Water Intelligence PLC
07 February 2022
Water Intelligence plc
2021 Full Year Trading Results and Operational Highlights
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 trading update and operational highlights for full year
2021.
The Group performed strongly and exceeded expectations for 2021
across revenue, profit before tax, EBITDA and EPS indicators.
The strong performance was despite operational challenges
presented by Covid-19. Market demand for the Group's solutions
continues to grow rapidly, fed by the increasing price of water and
strong government infrastructure spending around the world
(particularly bipartisan infrastructure legislation in the US).
During 2021, the Group advanced the scale of its multinational
distribution platform through nine acquisitions in the US and UK to
enhance its capabilities for delivery of a growing range of
products and services across more than 150 locations.
The Group has started 2022 strongly, with transactions accretive
to shareholder equity as noted in Subsequent Events below.
Audited results for 2021 are expected during mid-May as
traditionally released.
Highlights
Group Consolidated Financials
-- Revenue grew strongly by 44% to reach $54.5 million (2020: $37.9 million)
o 19% organic growth of corporate locations owned prior to 1
January 2020 (2021: $21.3 million; 2020: $17.9 million)
-- Increasing consumer demand from (i) the rising price of
water; (ii) climate change-related drought and extreme weather
conditions; and (iii) upsales of new offerings including pipe
repair
o Total gross sales to customers reached approximately $150
million (implied gross sales from which franchise royalty is
derived plus direct sales from corporate locations)
-- Statutory profit before tax grew by 35% to $5.7 million (2020: $4.2 million)
-- Profits before tax adjusted for non-core costs*, non-cash
amortisation expense and share-based payments grew 36% to $6.9
million (2020: $5.1 million)
-- EBITDA grew strongly by 44% to $9.5 million (2020: $6.6 million)
o EBITDA margin was constant despite significant increase in
headcount not directly tied to current revenue reflecting
investment in senior managers, Salesforce implementation and
training for new technicians
-- Basic adjusted EPS grew 29% to 30.2 cents (2020: 23.5 cents)
o Fully diluted adjusted EPS grew 24% to 27.9 cents (2020: 22.6
cents)
-- Balance Sheet strong at 31 December 2021
o Cash: $23.8 million
o Statutory Net Cash: $15.3 million
o Debt and Deferred Consideration: $22.2 million with
amortization spread through 2025 (Bank Debt of $8.5 million;
Deferred Consideration from Acquisitions $13.7 million)
o Net Cash (after deducting all debt and deferred consideration
through 2025): $1.6 million
* Non-core costs include one-time items such as legal expenses
on transactions
Operating Unit Financials : American Leak Detection (ALD); Water
Intelligence Int'l (WII)
o ALD revenue grew by 44% to $48.4 million (2020: $33.6
million)
-- Strong franchise system-wide growth: Royalty income grew in
absolute terms by 2% to $6.8 million (2020: $6.7 million),
indicating system-wide growth despite significant number of
franchise reacquisitions, reducing the pool of royalty income
-- Key insurance business-to-business channel grew 5% to $8.9
million (2020: $8.5 million)
-- Corporate-operated sales grew 83% year over year to $31.9
million (2020: $17.4 million)
o WII revenue grew 42% to $6.1 million (2020: $4.3 million)
Transactions
-- 2021 Corporate Transactions
o Bank Debt: Expansion of credit facilities by $3.2 million in
February
o Equity: $26.3 million raised during 2021 through two
oversubscribed placings
-- July: $9.5 million
-- October: $16.8 million
-- 2021 Acquisitions
o Franchise Reacquisitions
-- Reno, Nevada (May)
-- Central Florida (May)
-- Las Vegas, Nevada (July)
-- Phoenix, Arizona (July)
-- Jacksonville / Daytona Florida (July)
-- Southern Oregon (December)
o Bolt-on Acquisitions
-- IntelliDitch (February) (Open channel lining technology
expanding offerings)
-- PlumbRight (May) (Expanded Midwest US solutions)
-- Wat-er-Save Services Limited (November) (Expanded UK
Operations)
-- Technology Reinvestment to Scale Platform and Grow Offerings
o Salesforce CRM to create automated service delivery platform;
on-boarding 150+ locations through 2Q 2022
o Launch of e-commerce and video display technology via
exclusive license from SEEEN plc for water sector (see
www.waterintelligence.co.uk)
o Commercialization of proprietary sewer diagnostic product in
UK during 2021; Introduction in US January 2022
o Acquisition of IP for open-channel liner in 1H 2021 and
commercialization at World Agriculture Expo in Tulare, California,
February 2022
Subsequent Events
January 2022 Transactions
-- Reacquisition of Fort Worth, Texas franchise with 2021
performance of $3.6 million in sales and $1.2 million in
profits
-- Sale of franchise territory in North Carolina to existing fast-growing Franchise for $90,000
Executive Chairman, Dr. Patrick DeSouza provided the following
Outlook for 2022:
"2021 was another extraordinary year for all of our stakeholders
and we are just getting started on our ambitious journey to create
a world-class company. We exceeded expectations of growth, both
financially and operationally. We have accelerated our efforts to
build a scalable multinational distribution platform for
minimally-invasive water infrastructure products and services.
For 2022, we are expanding our installed base of 150+ locations
across the US and in the UK, Canada and Australia and are excited
about the prospect of integrating operations through the rollout of
our Salesforce Initiative. We will be able to automate operations
from sales lead generation to scheduling and delivery to payments
and also achieve the highest degree of data security. Coupled with
an exciting video technology afforded by our SEEEN investment, we
will be able to offer end-to-end solutions: video e-commerce for
our insurance, retail and property management partners and
efficient delivery of products and services (both ours and 3(rd)
parties) for our residential, business and municipal customers.
Global market demand for our solutions is strong and we aim to
provide private-sector leadership for the Green Economy with our
brand. We appreciate the continued support from our institutional
and individual investors during our financing rounds in 2021 and we
are excited to have added new institutional partners for the
journey ahead. Importantly we also appreciate the support of our
banking relationship that has provided complementary financing,
improving the returns for our shareholders. We look forward to
executing and accelerating our growth plan.
January has started off strongly and 2022 looks to be even more
exciting for our stakeholders."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014
Enquiries:
Water Intelligence plc
Patrick DeSouza, Executive Tel: +1 203 654
Chairman 5426
RBC Capital Markets - Tel: +44 (0)20 7653 4000
Joint Broker
Jill Li
Elizabeth Evans
WH Ireland Limited - NOMAD Tel: +44 (0)207
& Broker 220 1666
Adrian Hadden
Ben Good
Dowgate Capital - Joint Tel: +44 (0)20 3903
Broker 7721
Stephen Norcross
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END
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