Water Intelligence gushes as re-investment strategy reaps rewards

14th Sep 2015 11:35

(ShareCast News) - Shares in Water Intelligence gushed higher after the leak-detection company's strong interim results showed encouraging sales and profits growth.Turnover for the full year is now expected to exceed current analyst forecasts, though adjusted operating profits will remain in-line with expectations due to increased spending for growth in the second half.On revenue up 25% to $4.4m in the six months to 30 June, pre-tax profits swelled 49% to $0.91m thanks mainly to the growth in corporate-owned stores.Management looked to balance its profit objective with its investment plans, with the period including the re-acquisition of major former franchise stores in New York and Miami and a significant growth opportunity in Detroit.During the first half, costs increased 20% to $2.9m due to hirings that are part of the corporate store growth plan.Executive chairman Patrick DeSouza said: "We are pleased that the strategic choices we have made to grow our brand - national sales channels and reinvigorated corporate presence via selective franchise re-acquisition - are bearing fruit. Our entire franchise system is unified behind our direction and reinvesting for future growth."House broker WH Ireland said the significant underlying growth opportunity was the size of the circa-$70m in systemwide sales - ten times the size of the company's current reported external revenues."The size of the YoY increases suggests that strong growth drivers are at work; however, at this stage, we leave our forecasts unchanged."Shares in Water Intelligence were up 18% to 55p by midday on Monday.