Envirosuite raises A$10.5 million to accelerate EVS Water

Envirosuite has completed their institutional placement yesterday, which attracted strong demand. See below for details.

Highlights:

• Placement attracted strong demand from both existing and new institutional investors
• Funding will be used to accelerate Envirosuite’s investment into growing sales in the high-margin EVS Water business to support accelerated incremental growth in the next 12 months
• The Placement raised ~ A$10.5 million at an Offer Price of A$0.20 per New Share

Proceeds of the Placement, will fund plans to accelerate Envirosuite’s investment into growing incremental sales in the high-margin EVS Water business to support its growth in the next 12 months. With strong market interest and validation of the EVS Water portfolio, with clients such as Water Corporation, a desalination plant in Asia and the recently announced GHD strategic agreements, the raising will support:

• Investment into further growing the direct sales team focusing on the Optimiser and SeweX products
• Additional product and technical roles to support growth and future development requirements
• Creation of further strategic partnerships to support implementation and success for this portfolio.

EVS.pdf

DISC: Held.

I watched most of the company presentation today. Nothing new of note from what I could see. The company still seems focussed on both the expansion of new customers and increasing the ARR for their existing customers. A lot of talk in regards to figures from last financial year and their contract with NASA. Everything going in the right direction in my opinion.

Presentation was very minimalist and didn't seem like the company had anything they were trying to hide or not address. Looking forward to seeing how H1 FY22 has been for the company and how many new customers have been brought on, what this has done to the ARR and also how they have been able to grow their current customers and clients ARR.

DISC: Held.

Envirosuite will be presenting at Bell Potter EnviroTalks client-exclusive environmental technology conference.

Date: 17 November 2021  

Time: 10:30am – 1:00pm AEDT 

Link to sign up to watch.

DISC: Held

Envirosuite executes MoU for strategic partnership with Aeroqual.

Envirosuite has announced that they have executed a memorandum of understanding for a strategic partnership with Aeroqual. This is great news for shareholders, as it is a partnership that will be of great value in my opinion. With the ongoing push towards a cleaner and safer environment, and the want to be more conscious about these things, the product is one that fits perfectly into this.

Aeroqual is a quality business who already have many large customers across the world. Their global sensor network covers over 100 different countries and their advanced software platform processes more than 6 million data points per day. Their customers include AECOM, Rio Tinto, and U.S Environmental Protection Agency.

Aeroqual’s products offer real-time data and they market themselves as being an easy solution to measure air quality, "without the hassle, cost and risk associated with traditional air monitoring projects" . I thought it was interesting to note that the company also has products that are suitable for situations that Envirosuite don't currently have a product, like indoor air quality monitoring.

I believe this partnership could be worth more in the long run, and provide more value and revenue, than the recent announcement in regards to NASA. It may even open up the possibility of a merger, but even if it doesn't, this is two of the larger companies in the space, getting together to develop world class products and solutions for air quality monitoring.

Looking through the website for Aeroqual, there is a great section with on-demand webinars that talk about their products and technology and how it can be used in practice. Here is the link for that if you are interested.

DISC: Held.

EVS and WA’s Water Corporation enter into SeweX proof of concept.

Envirosuite has been awarded a proof of concept project with Western Australia’s Water Corporation for SeweX. This project will give Envirosuite the opportunity to demonstrate their SaaS product performance for water utilities. The SeweX product is designed to manage and collect data on a range of variables within the sewer network, while allowing the company to mitigate any costly network disruptions.

Water Corporation is state owned and accountable to the Minister for Water. It is a principal supplier of water, wastewater, drainage, and bulk irrigation services in the state, and supplies over 2 million people across WA with clean drinking water and removes 450 million litres of wastewater a day.

This is a great step for Envirosuite because this organisation operates 113 wastewater treatment plants across the state, and if they can prove their worth to the organisation, then this could lead to a large purchase order and a chunk of ongoing ARR for EVS. 

Jason Cooper commented on the announcement: 

“We’re thrilled to partner with an innovative water supplier like Water Corporation who are committed to sustainable growth, upholding the health, safety and environmental requirements of their operations, while taking action on climate change. Our EVS Water solutions help companies to monitor and manage their essential infrastructure and networks, while reducing the emissions impact on the environment and the surrounding communities. Projects such as this one advance the strategic need for digital solutions to help lessen the magnitude of climate change. We believe that every major town in the world is a potential customer for SeweX and this is a step towards that vision.”

DISC: I hold. 

NWR Virtual Investor Conference (Small Cap)

Just had the privilage of watching the investor conference by Jason Cooper from Envirosuite. As someone relatively new to the business these were my main takeaways:

What is Envirosuite?

Envirosuite is focussed on Environmental Intelligence. They use science backed technology to provide information to businesses and communities about various environmental factors that can be measured using their technology, and from this, predictive modelling and artificial intelligence give deeper insights to their customers. They have customers across the world with their main markets being Asia Pacific, The Americas and EMEA. The company as a whole has an ARR of $46.5 million, which is great for their relative market cap. This revenue comes from 4 main products:

1. Omnis: which is an all in one solution that is currently in 207 sites, with most of the customers being in the mining and industries sectors. This part of the business has an ARR of $14.6 million.
2. Aviation: which is a product focussed primarily on the air and sound quality of airports and modelling flight paths to gauge environmental effects. It is in 163 sites and has an ARR of $31.8 million.
3. Water: this is their newest arm of the business and is focussed on water treatment. It is currently in 3 sites and has an ARR of $0.1 million.
4. Instrumentation: which, from what I understood, are devices sold to a business that can record things like smell and vibration, depending on which device you have. Jason mentioned that they have one of these devices in a community in America where they are trying to establish the effects of smell from a waste facility on the surrounding community.

Competitive Advantages (According to Jason Cooper)

• They have the broadest amount of scientifically backed data of any company in this space.
• They have the 'first-mover' advantage.
• Good product market fit.
• A global presence.
• Their switching barriers are high.
• The current importance of ESG and the tailwind of that type of movement.
• A low-churn.

Questions That Came Up for Me While Watching

1. Will they try to harness the business of testing for COVID fragments in waste water since this has been a very large focus of many governments and could see a great opportunity to build the water arm of their business, especially since it seems like the infrastructure is already set up?
2. What is their current plan for growth into developing regions where money can be sparse and technology like theirs may be seen as a luxury and not a necessity?

Overall I think that their management team is doing an excellent job and I am looking forward to reading the next couple of quarterly reports as their expansion into the Americas continues. I will be interested to follow one of their projects that Jason Cooper mentioned, which is a deal with NASA in relation to Supersonic Travel.

DISC: currently hold.