Water and wastewater treatment company De.mem (ASX: DEM) has achieved its revenue target for 2018, with the company marking a record year-on-year sales growth of 262%.
Based on the preliminary unaudited accounts, the group’s 2018 accounting revenues are at $10.5 million which is within its previous stated guidance of $10-$12 million.
This compares to the $2.9 million it booked in revenues for 2017.
During the December 2018 quarter, the company’s cash receipts totalled about $1.9 million, down from $3.3 million in the September quarter.
The company attributed the reduced customer receipts to the phasing of the final payments on two major contracts.
The company said a higher operating cash flow of $740,000 for the December quarter was mainly due to variations in working capital and in particular, an excess of at least $250,000 in customer payments yet to be received.
De.mem’s cash balance stood at $1.7 million at the end of December, and with an additional $400,000 received from investors this month, the company said it was sufficiently funded to meet near-term growth objectives.
New contracts secured
On the operational front, the company performed well in the quarter having secured new contracts to the tune of $350,000.
The projects include the delivery of a chlorination system to the Maranoa Regional Council, Queensland, and the sale of a membrane-based water treatment system to South32 Cannington.
The company also demonstrated its in-house research and development capabilities over the period, releasing its first in-house-developed hollow fibre Ultrafiltration membrane for commercial sales while also opening sales offices in Adelaide and Melbourne.
De.mem chief executive officer Andreas Kroell said 2018 was a great year for the company, having met is financial forecasts and boosting revenue.
“The company built an extensive project pipeline in the second half of CY2018 and we expect this to translate to new revenue generating contracts in CY2019,” he said.
“Significant project awards are expected in the coming months which will reflect this. We are strongly focused on becoming cash flow positive in the near term.”
Growth objectives top of mind
Looking forward, the company is projecting considerable scope for growth in the water and wastewater treatment market with a lot of opportunity present in municipal, food & beverage and agricultural sectors.
In addition to these markets, De.mem’s other area of expansion is centred around its technology portfolio, with three proprietary technology opportunities primed for continued commercialisation.
The company is also expanding outside of Australia and Asia, having announced the acquisition of a German technology company that already supplies services and solutions for industrial wastewater treatment across Germany.