De.mem delivers record quarter in its push to become a one-stop shop in water treatment
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Special Report: De.mem’s record quarter has put it in a good position to become a leading one-stop shop player in Australia’s water treatment industry.
The company reported $3.9 million in adjusted March quarter cash receipts, which was an 18 per cent increase compared to the previous corresponding period (pcp).
This represents the eighth consecutive quarter where De.mem was able to beat its previous corresponding periods.
The company also recorded an adjusted $361k in net operating cash outflow, which was a 51 per cent improvement from the pcp.
Underpinning the solid performance was its recurring business segment, which is mainly made up of sales from its Build, Own, and Operate contracts that include sales of consumables like chemicals.
In this segment, the company is continuing to grow its recurring cash receipts, which now makes up 67 per cent of total revenue, from 38 per cent in 2018.
The company’s balance sheet is strong, with cash standing at a record $11 million, which includes the $10.6 million it raised over the last month.
De.mem has also diversified its revenue base during the quarter, signing up clients within the food and beverage, and sustainable agriculture industries.
The acquisition of Capic in WA has also diversified De.mem’s business geographically, and gives it access to Capic’s high growth West Australian mining clients.
Capic has also brought substantial “cross sell” potential to De.mem, allowing the company to become a one-stop shop that offers everything from membrane-based water treatment equipment, pumps and hydraulics, to chemicals and water treatment services.
Given the strong first quarter, De.mem is now expecting significant growth for the rest of CY21.
As of today, $14.5 million in cash receipts are already visible, which is made up of $10 million of recurring income, and $4 million projects-based.
The company has forecast an 18-25 per cent increase in organic growth for the first half, with a strong second quarter ahead.
“With our world-leading, innovative membrane technology, expanded product range which now includes Capic’s speciality chemicals, and our proven capability to operate and maintain water treatment plants, De.mem is uniquely positioned to realise our vision of becoming the Australian ‘international champion’ – providing the complete ‘one-stop shop’ for decentralised industrial water treatment solutions,” says De.mem CEO Andreas Kroell.
De.mem’s flagship is its IP-protected membranes technology that effectively filters and blocks unwanted constituents from water by using nano-sized pores in the membranes’ structures.
Its share price has risen by 65 per cent over the past year.
This article was developed in collaboration with De.mem, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.