Tech: Investors warmed to Envirosuite’s sunny outlook in its latest trading update
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Amid yet another stock selloff this morning, clean-tech company Envirosuite (ASX:EVS) provided a bright spot for investors.
The company delivered a preliminary sales update following a recent acquisition, along with an overview of operations across its global client base.
In January this year, Envirosuite announced a share placement to finance the purchase of EMS Bruel & Kjaer Holdings, a Melbourne-based noise solutions company, for $70m.
That transaction added to Envirosuite’s existing data management programs, which allow companies to take more accurate measurements of air quality, odour, dust and water.
Envirosuite nows says it’s “strongly positioned” to beat its medium-term growth target of $100m in revenue, with “increasing profit margins as the group continues to scale in a global market”.
Investors approved, sending the stock over 10 per cent higher in morning trade to 16.5c. But Envirosuite shares are yet to recapture their momentum after surging above 30c last September.
The company said it had identified “a number of opportunities for cross-selling” in the wake of its EMS Bruel acquisition.
“Furthermore, the number of renewals since 1 January 2020 amounts to $7m of recurring revenues and a 99 per cent renewal rate,” Envirosuite said.
As part of its trading update, the company provided details of operations across its global client base.
Envirosuite’s clients include a waste treatment project for the City of Montreal, air quality management at a steel plant in Spain and noise-monitoring solutions across airports, mining and construction.
The company also provided an update on the impact of the coronavirus, given the expected sharp decline in global air travel.
However, the resulting fall in activity is “expected to have a negligible impact” on revenues, which are “predominantly comprised of fixed price multi-year contracts”.
“The travel restrictions imposed by various countries have contributed to the timeline for certain contract tenders in Asia being extended, however the restrictions have not removed the requirements for environmental monitoring or the company’s ability to deliver on these tenders,” Envirosuite said.
The company said its Beijing team returned to work in February, and that operations were more-or-less business as usual although some team members continued to work from home.