Water Intelligence Q1 revenue climbs amid launch of Preventive Maintenance platform
Often during challenging economic periods, the best companies outperform their rivals by executing well and investing in the long term.
This is exactly the case for () , a 'one stop shop' for all things leak detection, repair and preventative maintenance (approx. 2/3rds franchised).
Indeed, it is already the largest operator in the US, and today released an in-line April YTD'25 trading update - posting turnover and adjusted EBITDA up 8% and 10% respectively to $29.1m and $4.1m - representing improved EBITDA margins of 19.5% (18.5% LY) due to economies of scale, and a closing net debt to EBITDA ratio of 1.5x, which is comfortable for a high repeat revenue business.
The impressive growth was not only driven by its best-in-class solutions that save water, minimise sewage spills, cut the cost of insurance bills, and reduce regulatory fines - but also thanks to its recent StreamLabs Water partnership (part of Chubb Insurance) and the launch of a new seamless Preventive Maintenance service, which proactively manages and stops water leaks for residential, commercial, and municipal customers before they occur.
In fact, both of these important initiatives appear to be already coming through in the numbers, where April saw an encouraging 20% jump in sales compared to 4% in Q1'25. Hopefully this trend will continue, underpinned by the secular tailwinds of aging infrastructure and climate change (water conservation and stormwater damage), on top of 's broadening channel distribution and sharp execution.
In terms of the numbers, house broker Dowgate Capital is forecasting FY25 turnover, EBITDA, PBT and EPS to come in at $97.0m, $17.5m, $11.2m and 44.3c - in turn putting the stock on modest EV/EBITDA, PE and PEG ratios of 6.0x, 10.5x and 0.5x, which frankly appears far too cheap for an economically resilient, growth platform. In comparison, Dowgate Capital has an 850p/share target price.
Executive Chairman Patrick DeSouza commenting: "We have launched a defining partnership with Chubb/StreamLabs and now have the capability to execute a true integrated platform with operations across the US and overseas. Preventive Maintenance, rather than Reactive Mitigation, is where the industry is headed, both to conserve water and limit the damage from water leakage".
"[Additionally] we remain focused on continuing to grow revenue and profits, while retaining a strong balance sheet with which to execute our competitive strategy."
Finally, the Board is also considering a separate dual listing in the US, and from this month American investors can purchase shares via Interactive Brokers.
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