(Alliance News) - Modern Water PLC on Monday posted a wider loss for 2019, considered a "difficult year" as revenue declined on continued project delays and the liquidation of two subsidiaries, as part of the company's change in business model.
Shares in Modern Water were 12% higher at 3.12 pence on Monday in London.
For the year, the London-based wastewater firm reported a pretax loss of GBP1.6 million, widened from GBP857,000 the prior year, on revenue that declined by 19% to GBP2.9 million from GBP3.6 million.
Modern Water attributed the weaker performance partly to continued contract delays in Gibraltar, as despite the successful conclusion of the planning application for the Gibraltar wastewater project, the territory's government has not yet awarded the full contract.
As a result of this, two of the group's subsidiaries, Modern Water Services Ltd and Modern Water Monitoring Ltd, were liquidated in August 2019, as part of its drive to focus on UK membrane projects.
However, the business model change and subsidiary liquidations did result in lower overheads and costs. Total operating costs for the year were GBP2.4 million from GBP2.5 million.
Looking ahead, earlier this year, Modern Water conducted a fundamental review of the business model, coming to the conclusion that it had to move to a revenue-sharing collaborative and partnership strategy in order to accelerate growth.
Examples of the new business model was the group joining the EcowaterOS consortium in February, and signing a reagent manufacturing contract with Integumen PLC.
"The company business model in 2020 has moved to a high-volume, high-margin recurring revenue strategy that has been in existence within the Water Monitoring division that was acquired in 2011," said Chair Gerard Brandon.
"The new platform gives us the ability to fully exploit the data the company generates from different water systems across the world. Data analytics with the latest AI systems in collaboration with company partners set Modern Water up for multiple revenue streams from equipment, consumables and predictive services for our existing and new clients coming online to manage their Covid-19 risk," Brandon added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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