14 March 2023

Eneraqua Technologies plc

("Eneraqua Technologies", the "Company" or the "Group")

Year End Trading Update

Eneraqua Technologies plc, a provider of specialist energy and water efficiency solutions, announces an update on trading for the year ended 31 January 2023 (FYJan23).

The Company has continued to deliver on its growth strategy, with both revenue and profit well ahead of FYJan22 and expects to report revenues of approximately £55.0m, which are 54% up on FYJan22. Gross margin is anticipated to be ahead of expectations¹ and EBITDA² within the range of market expectations.

Full year revenues are lower than previously targeted which reflect changes, near the end of the period, to project commencements due to inflationary and cost pressures on the capital budgets of certain clients. No contracts have been cancelled, with delivery moving into future years.

The improved gross margin is due to a change in the mix of projects, with higher margin projects coming into the latter part of the period. In addition, it reflects tight control of direct costs and the pass through of costs to customers.

Net debt at the end of January was approximately £4.7m, reflecting investment in working capital, which is expected to unwind in the current financial year.

Decarbonisation, net zero targets, energy efficiency and water efficiency regulation continue to have a positive impact on the Group's target markets both in the UK and internationally. This is illustrated by the ongoing work with new and existing clients across both the UK public and private sectors.

The Order Book³ has grown and is now at a record level, with £110m in contracted and secured work, of which 72% is due to be delivered in FYJan24. This proportion represents 99% of the FYJan24 revenue target (previously 85% as announced in October 2022). While early in the current financial year, the Board remains confident in the Group's outlook for the year ahead.

Mitesh Dhanak, CEO of Eneraqua Technologies commented: "It has once again been a record year for Eneraqua with another period of significant growth reflecting the strength of our decarbonisation and water efficiency solutions. We remain confident in the Group's outlook for the year ahead."

¹ The Company considers that the range of market expectations for the year ended 31 January 2023 are for revenues of £61.3m to £61.5m and EBITDA of £11.4m to £12.2m.

² Earnings before Interest, Tax, Depreciation and Amortisation.

³ Order Book defined as Contracted + Secured. Contracted = project contract issued and signed, with work started or ready to start. Secured = sum of a) tender process successful, awaiting project contract, and b) Directors' assumed win rate on Framework opportunities.

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Notes to editors

Eneraqua Technologies (AIM:ETP) is a specialist in energy and water efficiency. The Group has two divisions energy and water. Energy is the larger division, with the Company focused on clients with end of life gas, oil or electric heating and hot water systems. The Group provides turnkey retrofit district or communal heating systems based either on high-efficiency gas or ground/air source heat pump solutions that support Net Zero and decarbonisation goals.

The water division is a growing service offering focused on water efficiency upgrades for utilities and commercial clients including hotels and care homes.  

The activities in both divisions are underpinned by the Company's wholly-owned intellectual property, the Control Flow HL2024 family of products which reduce water wastage and improve the performance of heating and hot water systems.

The Company's main country of operation is the United Kingdom. The Company's head office is based in London with additional offices in Leeds, Washington (Sunderland), India, Spain and the Netherlands. The Company has 168 employees, with the majority employed within the UK. Eneraqua Technologies has received the London Stock Exchange's Green Economy Mark.

To find out more, please visit:  www.eneraquatechnologies.com

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.