Modern Water clamps down on costs in first half

(ShareCast News) - Modern Water, an AIM listed provider for water and wastewater treatment and the monitoring of water quality, improved on its performance during the first half by cutting down on costs.Re-organisation and cost control during the first half saved the company £0.6m, with cash burn halved from £2.2m in the first half of 2015 to £1.1m for the period ending 30 June 2016 as overheads fell by 18% to £2.18m.This resulted in group operating losses improving by 17% to £1.84m.Gross margins improved in the firm's monitoring division at 51% compared to 43% in the previous period. This however did not fully mitigate a reduction in revenues in the division by 27% to £1.14m. The firm attributes this to weakness in the Chinese market, which it expects to reverse in the second half.The group received its first order for its AquaPak containerised desalination plant from Oman. It expects further orders for the product before the end of the year.In terms of product development the firm have launched a new Quickcheck atrazine strip test and SmartReader photometer during the period.Chairman Alan Wilson said: "Modern Water has continued to adhere to its clearly defined strategy and I am pleased to report to shareholders that it is beginning to deliver demonstrable benefits, as highlighted by our first order for an AquaPak in the Middle East. I am also encouraged by the progress we have made in restructuring and refocusing our Monitoring Division, which is showing signs of returning better profit margins."The share price fell 15.20% to 5.30p at 1042 BST on Wednesday.