Envirosuite share price surges 14% following sales update

The Envirosuite share price has risen today following a positive sales update by the company. We take a closer look at the announcement.

| More on:
surging asx share price represented by explosion coming out of lake

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Envirosuite Ltd (ASX: EVS) has today provided the market with a sales update that has propelled its share price higher. The Envirosuite share price has gained 14.3% to reach 16 cents.

The company also recently completed the acquisition of AqMB Holdings for a total consideration of $1.35 million that sent the share price up 11%.

What Envirosuite does

Envirosuite is an environmental management technology company that provides services through its software-as-a-service (SaaS) platform. The Envirosuite platform offers environmental monitoring, management and investigative capabilities. It is incorporated into a number of diverse operations from waste water treatment to large scale construction, open cut mines and port operations.

The company hosts more than 500 customers worldwide. Envirosuite's clients include organisations in China, airports, and companies such as Rio Tinto Limited (ASX: RIO).

Sales update

This morning, the company released a sales update driving the Envirosuite share price strongly higher. Envirosuite reported robust sales and a strong pipeline despite the global impact of COVID-19.

Despite the downturn in economic conditions, the company was able to report sales orders totalling $14.5 million. This was for the period 1 March to 12 August following the completion of the company's acquisition of EMS Bruel & Kjaer. Breaking down these sales, there was $8 million from new business and $6.5 million in renewal contracts.

Furthermore, the current sales order pipeline exceeds $30 million. The target percentage of recurring revenues to total revenue is 70% and the company is currently tracking above this at around 75% across both existing revenues and the sales order pipeline.

Envirosuite CEO, Peter White, was pleased with the results and commented:

"The robust sales to date and the strong pipeline provide validation of Envirosuite's strategic acquisition of EMS. They also highlight the resilience of the Company's business model and the essential role Envirosuite plays for its customers that continues even in the pandemic."

What now for the Envirosuite share price?

Envirosuite has reaffirmed its positive earnings before interest, taxes, depreciation and amortisation (EBITDA) target to the end of Q3 FY21 and medium-term target of $100 million revenue thanks to high recurring revenues. If the company is able to deliver on these promises it is likely the Envirosuite share price will continue its strong current run.

Furthermore, the strong results announced today demonstrate the resilience of Envirosuite's business sourced from multiple industry sectors and economic regions. Despite today's rise, the Envirosuite share price is still down 27.3% in year-to-date trading. It has a current market capitalisation of around $164 million.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
Best Shares

8 ASX All Ords shares that tripled in value in FY25

Just 8 out of the 500 companies making up the ASX All Ords achieved share price growth of 200% or…

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why DroneShield, Gentrack, Metals X, and Northern Star shares are tumbling today

These shares are ending the week in the red. But why?

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »