DeepVerge production orders up 39% worth £5m for Modern Water equipment in Q1
Additional installations and extension to wastewater COVID detection trial
Multi-year serviced install and monitoring to increase equipment only sales income by 140%
DeepVerge (LSE:DVRG) environmental division, Modern Water, announces production orders up 39% in Q1, worth c£5m (Q1:2021 £3.6m RNS[i]: 17th Feb 2021)) for a range of drinking water testing, contamination and detection of SARS-CoV-2 equipment. This is the biggest Q1 production order ever in Modern Water history and the equipment is expected to be delivered during the current financial year.
This equipment is across the range and earmarked for sites including the UK, the EU, China, India and the Middle East. The range of equipment includes Microtox®PD, for real-time detection of SARS-CoV-2 in wastewater treatment plants adding to existing data sampling units installed last year (RNS[ii]: 28th October 2021), extending the trials to April this year.
New multi-year installation, monitoring and maintenance recurring revenue model is designed to increase revenue of the existing install-only equipment sales model by 140%. There are 27 Microtox® CTM to be installed in the Middle East and this is the first move away from capital expenditure sales only to multi-year install, monitor and maintain with consumables (“Serviced Lease”), generating recurring revenues of $2.4m (£1.83m)* over a 5 year period in place of a $1m (£0.76m) capital equipment sale. As we transition to the monitoring, we still deliver units, such as those for a Chinese State government department and multiple units on the Yangtze River project which are capital equipment sales.
Gerry Brandon CEO DeepVerge plc commented:
“Our Modern Water division continues to grow with the biggest Q1 production order to date, increasing by 39% over Q1, 2021, for existing Microtox® (LX, FX and CTM), Microtrace (trace metal) units and new pathogen detection units, which will go into mass production in the next few months. This is due to the positive test results with Microtox®PD wastewater detection just beginning to realise their full potential with proven market demand having already contributed to part of last year’s revenues.
The multi-year lease, monitoring and maintenance recurring revenue business model overcomes the seasonal financial cashflow problems experienced by Modern Water when it was a capital equipment sales business. Support and maintenance costs are built into the annual operating expenditure of the client. It offers additional sales opportunities with an established installed base around the world where the Company can offer upgrades and upsell higher value equipment without capital spend by the client, increasing revenues from the value-added real-time monitoring service”
*Serviced Lease explanation: Of the £5m production orders, 27 Microtox CTM units with a sales value of $1.08m are to be installed on a 60 month serviced lease with monitoring and consumables at $40,000 per month. This is $480,000 over the first 12 months from installation date resulting in $2.4m over 5-years.
For further information please contact:
Gerard Brandon, CEO
+44 (0) 7340 055 648
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