Water Intelligence reports steady sales and profit growth in Q1
() , a provider of water leak detection and related services, issued a trading update for Q1 ended March 31, 2024.
Water Intelligence reported revenues of US$20.5m in Q1, a 6% increase compared to US$19.4m in Q1 2023. Franchise royalty remained flat year-on-year at US$1.9m, though franchise-related sales declined by 12% to US$2.8m.
Profit before tax jumped by 14% to US$2.0m and adjusted pretax profit (before non-cash expenses and non-core costs) increased by 8% to US$2.5m. US Corporate locations increased by 11% to US$13.6m and international corporate locations rose by 5% to US$2.1m, up from US$12.3m and US$2m last year respectively.
EBITDA and adjusted EBITDA (same adjustments as above) both rose by 9% year-on-year to US$3.8m and US$3.5m respectively. EBITDA margins climbed to 17.0% from 16.7% in Q1 2023, and adjusted EBITDA margins rose to 18.5% from 18.1%.
reported cash of US$12.7m on March 31, 2024. Bank debt and deferred acquisition payments stood at US$19.9m with payments spread through 2027 at a fixed c. 5% interest rate.
View from Vox
Water Intelligence continues to report steady growth in both revenue and profits. Margins stayed healthy in Q1, registering minor increases despite inflationary pressures on labour and materials. Recently won contracts should provide further growth momentum in Q2 and the rest of the financial year.
The contract pipeline remains strong, with significant recent deals, including a multi-year extension with a current national insurance customer, and a new UK customer in the high-end residential and property management market. Moreover, in mid-February announced the reacquisition of its Pittsburgh franchise that is now part of its wholly-owned ALD subsidiary.
Overall, continues to grow despite stagflation headwinds in its US markets, indicating strong momentum and further upside once the macro environment improves. Recent investments, including ALD Water Management Solutions, Pulse, its Salesforce operating system and video commerce technology, should bolster growth in H2 as their revenue streams mature. The group's comfortable cash position and credit facilities will enable more investment and M&A in the near term, further improving visibility.
's audited full-year results are expected in early June 2024.
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