Water Intelligence drips lower after UK disappointment

18th Jun 2014 14:45

Water Intelligence (WI), the water leaks specialist, disappointed the market with a poor performance from the UK that cast a pall over a strong underlying result from the US business.WI, which confirmed it had newly refinanced its existing term loan agreement with Liberty Bank by $1m to $2.75m, said it was disappointed at the slow pace of testing of its Domestic Reporter product among UK utilities and by a lack of sales of its Leakfrog product. Sales dropped from $941,764 to $757,990 year-on-year and led to a strategic "revamp" of its sales approach in the UK to rely more on strategic relationships with resellers and cutting internal costs.The core American Leak Detection business provided "a clearer picture of [WI's] underlying strength", with revenue growing 9% year-on-year to $6.8m and royalty income, a measure of the health of the franchise system, growing 6% to a record high of $4.61m.Group profit before tax rose 15% to $0.6m, with earnings up 53% to 4.3 cents per share and net debt cut 52% to $1.18m.Executive Chairman Patrick DeSouza said: "We are pleased with the growth of the business, in particular our continued strong organic growth in earnings. We are excited about the future and look forward to capturing a greater share of customer demand in this growing worldwide market for products and services that address water loss issues."Shares in Water Intelligence were down 4.7% to 40.5p at 15:20 on Wednesday.OH