Amiad Water Systems climbs as American operations return to growth

Amiad Water Systems' shares climbed on Thursday as annual revenues moved higher following a strong performance in the Americas and the Asia Pacific region (APAC).

The water treatment and filtration solutions provider recorded revenue of $113.9m for 2018, an increase of 1.4% compared to the year before, after returning to growth in the Americas, as sales from the region jumped by 22.6% to $30.9m and revenue in APAC increased by 5.0% to $28.1m, reflecting irrigation unit growth in both cases.

Conversely, in the Europe, Middle East and Africa region revenue dropped to $34.2m from $36.9m as activity returned to normalised levels following an "exceptional" year in 2017.

Meanwhile, profit before tax dropped by 4.8% to $4.8m as selling and marketing costs climbed by 5.6% to $27.3m due to the launch of new Irrigation products, a general increase in sales and marketing activities and some exceptional expenses related to the reorganisation of Amiad Europe.

Dori Ivzori, chief executive of Amiad, said: "This is a pleasing set of results with progress in most of our markets, including a return to growth in our key geography of the US. Our new Sigma series of irrigation products and the TEQUATIC PLUS Filter acquisition are performing well and receiving increasing demand. We continued to enhance our operational efficiency and benefitted from, among other measures, the contribution from our new in-house metal fabrication facility."

The AIM traded company had cash and cash equivalents of $13.5m at the end of the year, down from $14.6m at the same point the year before.

"Amiad entered 2019 in a stronger position than at the same point of the prior year with increased sales momentum and enhanced foundations. We are receiving strong demand for the new products, which are expected to make an important contribution to growth in their respective markets. This is supported by a solid backlog of projects to be delivered in 2019 in the Irrigation and Industry units. We also expect significant growth in the US," said Ivzori.

A statement from the company said it anticipates good revenue growth in 2019, with increased sales in both the Irrigation and Industry business units in line with market expectations, and is targeting an improvement in gross and operating margins as it benefits from additional operational efficiencies.

Amiad Water Systems' shares were up 6.25% at 170.00p at 1023 GMT.