London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Taser
I agree with you, I recall that the CEO has a large stake hinself and the institutional investors look good, various specialists in small cap stocks & a small cap video puff I saw very recently mentioned them saying that the CEO never bothers to promote the company but may well look to sell as he could be retiring soon, not sure how true that is but the lack of divis doesn't bother me, many US growth stocks pay no divis & prefer to reinvest.
I'm attracted to this because of the sector, WATR's value to the sector and the general lack of competition allowing it to build up strength & coverage.
The fact that they are using profits to buy back areas from franchisees also encourages me as that should mean greater profit sooner rather than later.
Hi,
Thanks for the response but I don’t necessarily agree. If the company wants to use profits to reinvest and grow to meets its potential market I have no concerns. It is the returns on this investment I am looking to see this year. Will the Saleforce integration and funding of a central hub pay off? Hopefully so.
Once fully established and conquered their market place then sure dividends sound like the right place to go but keeping debt down and reinvesting in a growth market is by no means a negative for Watr.
A new investor presentation would bNot go amiss with updated projections post qtr 1
Taser.
If there is no profit distribution through divi, what is the point in owning a share. Divis drive long term sp growth. In a chat, the CEO told me the company has no plans to award divis. One day he will learn. One metric for buying shares is P/E ratio. P/E here is not great. If P/E sees low values, a buy indicator, with no prospect of divis, it's a BOD life style company. Many cos have very low p/e, but sp remains stagnant with no divi policy.
This share really does test my limits!
WATR stated that the benefits of a rather long and costly investment programme would shine through from H2 2023. The integration with Salesforce software was then later stated to be complete 1st qtr 2024. The market need to see tangible returns on the investment as it seems there is some doubt as to its effectiveness.
To me the financials look good and the industry sector pretty much recession proof. Obviously as an investor I see a lot of upside this year but it is hard to ignore the extreme trading patterns - days of falls and rises with little discerning market news.
They seem very quiet on contract news and self promotion and yet the CEO comes across very well. It just seems many old holders jumped ship with trailing stop losses with big gains but the potential is still here to be realised.
Anyone any thoughts?
Underlying Profits increased over 1 million to over 7 million.
" weeks ago, I had an email xchange with DeSouza. He offered a tel. call, I said it was not necessary. He only contacted me by email after I had left 3 messages on the 'contact form', and in the last mail, said I could wait, and raise my questions at the next AGM. PdS replied the same day.
The bones of the exchange, were, IMO, the Co was a BOD lifestyle company, and It should have a defined Dividend policy, which is the prime mover of sp.
His reply was that there is no divi policy and the company is a growth entity, and resources will be used that way.
It was a pleasant enough exchange, but we agreed to disagree. I sold out.
Good luck all.
It is interesting to note this is a 10 month update rather than a Q3 as is typical.
The profitability is there, but as you say the growth rate is not. Marginally ahead of the last Broker forecast so nothing to shock the market either way.
Lets hope they land the new contracts they mention next year.
Not the most inspiring of updates.
It seems the rate of growth is stalling .
Hopefully someone has a clue as to how they are performing, hence the steady buying..
Shhh, don't spook it. It's really picked up nicely since the start of November.
There is usually a Q3 update around now, in the past they have typically hit the previous full years revenues at this point but I cannot see that happening this year. Hopefully they will have still managed steady growth and be focused on profitability now that they should be coming to an end of the major capex they spent on salesforce, a training center and training a lot of new technicians (the later is still ongoing).
I had not realised until this year that they had some dependency on new builds in the US in their revenue stream. Hard to see that this element will have picked up in the last quarter but it should provide an uplift next year.
There has been sustained buying and a decent rise over the last few months.
Next update will be interesting to see if they are still growing.
Will Water Intelligence benefit from the IIJA (Infrastructure Investment & Jobs Act) in the US, which is $1.3trn?
Lots of trades today for a relative minnow.
I wonder what’s up ?
Taser
I think it is the close they gave them which is making it look much worse than it is, yesterday I averaged by buying some at 332.5, today I can only buy them at 325 so that is 7.5p or just over 2% down in reality.
The reported volumes don’t match the drop. It is hard to make sense of the valuation reconciled against the share price but someone wants this down with late crossing trades giving a false close. It is brutal.
Franchise businesses normally reward their shareholders with a dividend. This not only provides an option to re-invest, but also opens the door to a wider set of investment funds. WI is well into its growth strategy, there is nothing significant on the horizon, so perhaps the BOD should consider such an option. The CEO then will be able to limit his additional costs for securities, since he will then be gaining dividend income.
The capital spent on training could be partially wasted if the employees turnover is high. I imagine staff retention may be a considerable cost not to lose the upskilled technicians. I will buy in if the share price falls under 300p. I noticed that US companies listed in the UK do not receive much grace from investors. Why Water Int. did not list on an US exchange?
Taser
I think you hit the nail on the head re illiquidity in the shares, irrespective of whether a company is doing well or not, funds which specialise in small/micro cap stocks need cash to fund redemptions.
You can bet there have been plenty of redemptions since the aim market peaked and there is little choice in what you can sell if WATR, say, is 350p compared to so many other "fallen angels" languishing at just a few pence per share.
The fund manager probably does not want to sell them but has to in order to keep cash liqidity at a reasonable level.
Closed end funds don't have this problem, of course, as the discount to NAV can take the strain.
I have been adding this week down here, as to me it is a tuckaway stock which has a niche market.
Always a chance of a bid too...
Climate change should represent an opportunity for WATR. In N Africa we have almost adjacent countries suffering worst droughts in decades, and others worst floods in history. Similarly with countries in Eu, States in USA. The long term problem is not lack of water, but water management. A major problem for all of us, is disinformation. Sunak has now drawn back on 'green' policies. GOP stateside is a GW denier, only because it is well funded by Big Oil. Forget the Planet, how big a swimming pool do I need. It's sickening.
Totally agree although the down trend in ESG has been noted many months before and rate of decline steadied over the last few months but WATR after a more than acceptable set of results are getting hammered.
Of course it is relatively illiquid and prone to large moves up and down but my concern is the continued momentum from frothy highs to a fair base which I perceive to be around the £6 mark.
The only thing I didn’t like was a reference to increase in expenses due to training which should, according to WATR, be viewed as investment. Fair point but there was a lot of noise about H2 being the point at which prior investments would contribute to growth. We have been patient with this strategy at a cost to shareholders, where is the pay back?
The CEO already owns about 25% of the company , there are also plenty of share based payments for the directors so I doubt that you will see any purchases, they have not noticeably done so in the past.
The problem is that, looking forward, it has gone from a >25%CAGR to somewhere well below 10% . Compounding this, the boom in esg themed investment has back tracked over the past year.
I had it in my 'safe', recession resistant pot with an eye longer term to climate change but It has not held up as well as I would have liked.....
It is a well run, profitable company, but unless they can inject some extra growth from either their new products or expanding their customer base I don't see the share price rocketing off any time soon.
We are entering a El Nino weather pattern now which has typically resulted in droughts in their market regions, with this comes more pressure to conserve water, so maybe this will help provide a catalyst for a step up?
It would be nice to see some director buys here that is for sure.
It has just been a constant drip down for so long. Purely on the numbers unwarranted but when investors start to feel the need for cash it hits hard. Hoping rather than expecting the momentum to shift
The market sees this company as a source of financial well being for its BOD. Before there can be any meaningful increase in sp, and a revaluation of PE, the company needs to start paying divis. The market sees this a someway off. AIMHO
Water Intelligence Plc posted its Interims for the 6 months ended 30th June 2023 this morning. Results were in-line with market expectations with strong profit growth as the Group continues to execute on its long-run growth plan. Revenue increased by 9% to $38.7 million, statutory profit before tax increased by 21% to $4.2 million with basic EPS up 18% to 16.4c. The balance sheet remains strong, net cash was $1.75 million. Valuation is average with forward PE ratio at 13.5x mid third for the Machinery, Equipment & Components sector. The share price lacks positive momentum and is into its 3rd year of correction. WATR is a share to monitor for the time being. ...
...from WealthOracle
wealthoracle.co.uk/detailed-result-full/WATR/801
I think although this was all about the first half figures a paragraph on H2 was really what was needed. It has been consistently conveyed that in H2 we would start to see our investment over prior periods shine through and I strongly believe any hint that that was the case would of seen a blue day.
Still a competent company in a growth market with strong supportive balance sheet and growing PBT. THE PE is now way to low but it’s not what I think that counts but the market and at the moment we ar3 no5 best friends!