Amid dwindling cash reserves, Envirosuite integrates EVS Water products

Parched for better financials going ahead, environmental intelligence technology company Envirosuite Limited (ASX: EVS) has announced that its EVS Water products will join the EVS Industrial portfolio. This decision follows EVS Water’s maturity milestone and the go-to-market and product synergies seen with the EVS Industrial portfolio, demonstrated through recent cross-sell wins and success in B2B partnerships.

This restructure will deliver a net annualised expenditure improvement of circa $2.5m, which is expected to be material to Envirosuite’s forward earnings.

Envirosuite CEO, Jason Cooper said, “I am proud of Envirosuite’s achievements in EVS Water to date, having built compelling products that can now be sold and supported without further development, which have been validated by significant customers from around the world. This decision reflects the go-to-market and product synergies we have seen between the two portfolios through cross-sell opportunities and the more recent focus on B2B partnerships.”

As a result, Cooper feels that the Company can consolidate maintenance and support resources for Water customers while leveraging the sales and marketing efforts of the EVS Industrial team. 

The Company originally bought the intellectual property (IP) underpinning the EVS Water technologies to complement and leverage its market leadership in EVS Aviation and EVS Industrial. The IP was subsequently developed into three modular software products, market-tested, and through further product and commercial development, has raked in customers from the UK, Europe, the Middle East, India, Singapore, Australia, and the USA.

Launched in 1990, Envirosuite is an environmental intelligence company that helps companies make data-driven decisions regarding managing the environment. It functions in the mining, industrial, aviation, waste and water spaces. 

In H1 FY24, Envirosuite reported $29.5 million in revenue against a net loss of $5.7 million. Its operating expenses stood at $20.8 million, while it recorded an EBITDA loss of $1.8 million. Compared to H2 FY23, EVS Water’s recurring revenue declined from $347k to $258k, while the Aviation and Industrial arms remained largely consistent. 

By the end of the half, the Company’s cash reserves declined by 53.6% on H1 FY23, from $11.9 million to $5.5 million. 

Cooper added, “We move forward with two exciting product portfolios: EVS Aviation, which has over 30 years of leadership in aviation noise, operations, and community management, and EVS Industrial, which provides proven environmental intelligence technologies to solve complex operational challenges relating to air quality, noise, vibration, water management, weather, and community engagement.”

The Company’s outlook for FY24 outlines its ambitions to scale its business and invest in more product development. Integrating EVS Water into EVS Industrial is part of the move.

While this streamlines matters, whether it will help recover cash is uncertain. Along with dwindling cash, the Company’s share price—and shareholders—have also suffered over the past few months. Since the start of this year, EVS’s share price has tumbled by about 43% from $9.60 cents to $5.5 cents.