Water Intelligence's revenue rises due to US reaquisitions

AIM listed Water Intelligence, a provider of leak detection and remediation services, reported a rise in revenue as it reacquired several past US franchises in the first half of the year.

For the six months ended 30 June, revenue increased by 27% to $5.51m, compared to the same period last year.

This resulted in an 8% rise in pre-tax profit of $980,000, which reflected a mix of revenues from corporate stores versus franchisee royalties, as well as a growth in investments made made in the second half of the 2015 financial year.

During the six months, revenue from royalty income grew 6% to $2.89m, from corporate-owned stores rose 60% to $1.79m and revenue from other streams increased 57% to $880,000.

Sales from the insurance business-to-business part reported revenue for the first time of $270,000.

During the first half of the year the company re-acquired several US franchises through its subsidiary ALD to support its growth strategy, including the South New Jersey franchisee in February, the Cincinnati franchisee, in May and the Northwest Arkansas franchisee in September.

The company also agreed, subject to various conditions, to buy a former franchisee in Sydney, Australia with the deal expected to be finalised in October.

In September, the company also bought NRW Utilities, a UK based-water services business, for £575,173.

The company completed a capital reorganisation to put it in a position to issue dividends, to enact share buybacks and reduce administrative costs.

Executive chairman Dr. Patrick DeSouza said Water Intelligence was pleased with results as it has accelerated organic growth, it built on the corporate store strategy with reacquisitions which are strategically placed to support the franchise network, and that the company bought a growth company in the UK which works with its American leak detection business.

He added that the company now has a “solid Anglo-American platform upon which to scale into a multinational growth company."

Shares in Water Intelligence were up 7.32% to 88p at 1020 BST.