Envirosuite achieves record quarter with major jump in new sales
Boosted by a stream of new contract wins Envirosuite (ASX: EVS) has hit new levels in quarterly sales with a return of $6.8 million in Q4 FY23.
Backed up by a 13% jump in Personal Contract Purchases (PCP) the company achieved a new accounting rate of return (ARR) record of $3.1 million and project sales of $3.7 million.
Chief executive officer Jason Cooper said the company has benefitted from the addition of new clients and expanded services across existing airports, mines and industrial sites.
He said the record sales result in Q4, has reaffirmed the company’s solid Q3 results as the company enters FY24 with a strong pipeline of opportunities across all of its three product suites.
Industrial work remains as major contributor
Envirosuite reported that its EVS Industrial division was once again the major contributor to its growth, representing 55% of new ARR in Q4.
Mr Cooper said that growth is being propelled by changing legislation requirements in the US where the “Environmental Justice” Act is advancing and and is creating significant change in the way companies monitor and mitigate their impact on communities.
“EVS Industrial has also benefited from the company’s ‘land, expand and scale’ strategy as demonstrated by the growing relationship with the BHP Group, where we have added new mine sites in Chile and expanded our solutions at two sites in Western Australia.”
Strong performance from all product areas
Mr Cooper said the record quarterly sales result saw strong contributions from each of the company’s product suite and each region it operates in.
“Our global leadership in environmental intelligence for aviation has led to an engagement with Egyptian Airports Company for a 10-year deal covering five airports with a Total Contract Value of $9.8 million.”
The quarter saw Envirosuite significantly expand its aviation representation in the Middle East and Africa with the award of the Egyptian airport contracts and two new airports signed with Abu Dhabi Airports Company.
Mr Cooper said the company has also noted increasing market interest in its new carbon emissions modelling product, which he said has already attracted some of the largest air services providers in North America and Europe.
NEOM water studies
Another significant recent development was the selection of Envirosuite’s EVS Water software by the NEOM major city development proponents.
NEOM is a new urban area planned by the Kingdom of Saudi Arabia and the EVS Water process simulation software for water treatment plant modelling, concept design or predictive compliance was selected following an extensive review of potential solutions to optimise the city’s water infrastructure and water operations.
Mr Cooper said the contract will add a globally significant reference site to Envirosuite’s increasing portfolio of desalination plants, a market that is experiencing fast growth due to increasing water scarcity and the demand for fresh water from the global population.
Project sales growth a positive
Envirosuite recorded strong project sales growth in Q4, with a 28% in new sales adding $3.7 million to the bank balance.
The sales growth was driven by strong demand in particular from EVS Aviation customers, with several new sites requiring new instrumentation and existing EVS Aviation customers upgrading their instrumentation fleets to the latest technology.
“Project sales are a lead indicator and component of long-term recurring revenue as customers invest in designing and deploying monitoring instrumentation to set up the requisite data feeds for the software applications to run on multi-year projects,” Mr Cooper said.
“The company ends the year with another record sales quarter and enters FY24 with a strong pipeline, upward momentum across the product portfolios and regions, and rapidly growing interest from major corporate and industry participants.”