Water Intelligence boosted by ageing water infrastructure
In 2022, adjusted revenues increased by 31% to $71.3 million and adjusted EBITDA rose by 20% to $12.4 million. Market capture also remained strong, with network sales reaching approximately $165 million, reflecting an 11% growth compared to the previous year.
The American Leak Detection subsidiary saw a slight decline of 1% in franchise royalty to $6.7 million, primarily due to franchise acquisitions in 2021 that reduced the overall pool. However, without these acquisitions, franchise royalty would have grown by 8%. The Water Intelligence International subsidiary experienced a 9% increase in international corporate locations, reaching $6.7 million.
As of May 31, the company maintains a strong balance sheet with $19.4 million in cash and a net cash position of $8.4 million.
Commenting on the Group's performance, Executive Chairman, Dr. Patrick DeSouza remarked: "We are pleased to deliver on our growth plan for our stakeholders. During 2022 our team successfully navigated various execution challenges posed by short-run inflationary shocks and subsequent spikes in interest rates now raising concerns over a coming recession. Despite it all, our core business remains strong and market demand for water infrastructure solutions is only growing as both private and public sectors recognize the adverse effects of aging water and waste water infrastructure.”
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An overall impressive set of results from Water Intelligence, with strong market demand positioning it well for continued revenue growth.
Market demand for Water Intelligence’s services is underpinned most obviously by population growth and climate change, though inefficient water management and overexploitation are also putting stress on water and wastewater industries.
Both the US and EU are committed to spending tens of billions annually to address problems of aging water and wastewater infrastructure. In the US, the Infrastructure Investment and Jobs Act, signed in November 2022, approves $55 billion for water initiatives over the next five years.
Meanwhile, the European Union is projected to require an estimated €290 billion in additional spending within the next decade to meet water and sanitation requirements outlined in Directives for Drinking Water and Urban Waste Water Treatment, according to the OECD.
Against this backdrop, Water Intelligence’s water leak detection and services should continue to see accelerated growth. More specifically, by addressing two critical infrastructure problems - water loss from leakage and wastewater overflow - the group will continue to benefit from significant market opportunity.
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