STOCK INFORMATION

COMPANY INFORMATION

Relevant company information for MODERN WATER.

The Water Crisis
By 2025, it is forecast that two-thirds of the world’s population will live in countries classified as water-stressed. Climate change is likely to further exacerbate this situation and in many areas of the world the limited availability of fresh water is a problem right now.
Company

Modern Water is an AIM listed Water Technology Group that was established in 2006 by IP Group Plc to develop and commercialise IP and technologies related to the treatment of water. It has spent £20m over last 12 years developing a portfolio of over 100 patents and cutting-edge technology focussed on making the treatment and recycling of water more efficient.

It employs 40 people across two divisions in the UK, US, Japan & China. The Membrane division is focussed on the treatment of water and the Monitoring division sells equipment to analyse the quality of water.

New Strategy
Following a Board reorganisation in 2015, Modern Water adopted a new strategy for its Membrane division that focuses on selling technology licences and engineering services to industrial partners that are experts in their local markets. This model has significantly reduced the project risk for Modern Water as the majority of revenue is now received upfront and there is no capital outlay.

At the same time, new management was appointed to run the Group’s Monitoring division and all of its activities were consolidated onto one Management system at its headquarters in the USA. The group’s cost base was also reduced by over £1.5m p.a.

Monitoring Division

  • Sale of high-end water testing equipment and related ongoing consumables
  • Tests performed by its key product are written into environmental legislation in 6 markets
  • Almost 50% of sales are recurring; the high margin consumables used in the test process
  • Revenue grew 29% in the 1st half of 2018, whilst maintaining its 50% Gross Margin

Membrane Division

  • Technology has now been commercially deployed in India, China and Oman
  • Chinese partner’s recent investment provided further validation of the technologies’ potential
  • Sales Momentum is now building but, in these early stages of commercialisation, will be lumpy
  • The design & build of Gibraltar’s Sewerage Treatment plant is worth £22m to MW over 2 years

CEO’s Outlook
Modern Water made significant commercial progress in 2018 and is in a strong position to build on these successes.

In China, our Membrane Division is well-placed to capitalise on the world’s largest market for brine concentration, together with our Strategic Partner Sunup. In India, the successful completion of our first project with our partner Advent Envirocare has increased interest and opportunities for deployment of our technology. In Gibraltar we are working hard to fulfil HM Government of Gibraltar’s target of breaking ground this year.

The hard work of our Monitoring Division in building sales whilst continuing to upgrade and re-position our products leaves us well-placed for continued revenue growth in 2019 and beyond.

Please find below recent presentations to investors:

Investor Update October 2018

Investor Presentation

This page contains links to core management and financial information and has been designed to comply with the requirements of Rule 26 of the AIM Rules for Companies, ‘Company information disclosure’. The information below has been disclosed pursuant to Rule 26 of the AIM Rules for Companies.

This website is owned by Modern Water plc.

Registered Office:
Modern Water plc
12th Floor
6 New Street Square
London
EC4A 3BF

Incorporated in England and Wales, Registered No. 5963927

UK City Code on Takeovers and Mergers: Modern Water plc is subject to the UK City Code on Takeovers and Mergers.

Governance code: the directors of Modern Water plc (the “Company”) acknowledge the importance of high standards of corporate governance. The QCA Code, published by the Quoted Companies Alliance, sets out a minimum best practice standard for small and mid-size quoted companies, particularly AIM companies. The Company currently complies with the QCA Code.

Board composition:the board consists of two directors, one of whom (Nigel J Burton) is a non-executive director. Simon Humphrey is the Company’s Chief Executive Officer.

Engagement with shareholders & other stakeholders: the Company’s management team regularly meets with shareholders in order to obtain feedback from and develop a good understanding of the needs and expectations of all elements of the Company’s shareholder base. Furthermore, the board encourages shareholders to keep up-to-date with recent developments by signing up on its website to the Company’s regular newsletters and to follow the Company on social media. Other Stakeholders: other than shareholders, the Company’s key stakeholders are customers and staff. Given the size of the Company, most matters relating to customers and key employees are dealt with at board level.

Corporate culture: the Company is committed to ensuring that it operates according to the highest ethical standards, for which the board has primary responsibility. The directors believe that the main determinant of whether a business behaves ethically and with integrity is the quality of its people. As the board currently fulfils the responsibilities that might otherwise be assumed by a Nominations Committee, the directors have responsibility for ensuring that individuals employed by the Company and its subsidiaries demonstrate the highest levels of integrity. In addition, the Company has a formal Anti-Bribery & Anti-Corruption Policy and a Share Dealing Policy. The board tasks the Company’s General Counsel & Company Secretary on a regular basis to provide training on legal compliance and ethical behaviour to all staff and also to draw the Company’s high standards to the attention of the Company’s suppliers and distributors.

Meetings and board Committees: The board meets and will continue to meet at least six times a year to review, formulate and approve the Company’s strategy, budget, corporate actions and major items of capital expenditure. The board has established an audit committee and a remuneration committee, with formally delegated duties and responsibilities and each with written terms of reference, which can be found by clicking the link further below. Remuneration Committee: following recent changes to the board, the remuneration committee’s composition will be determined prior to its next meeting, at which a committee chairman will be appointed. The remuneration committee reviews the performance of the executive director and makes recommendations to the board in respect of the directors’ remuneration and benefits packages, including share options and the terms of their appointment. The remuneration committee also makes recommendations to the board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. In exercising this role, the directors have regard to the recommendations put forward in the QCA Code and, where appropriate, the QCA Remuneration Committee Guide and associated guidance. Audit Committee: following recent changes to the board, the audit committee’s composition will be determined prior to its next meeting, at which a committee chairman will be appointed. The audit committee has the primary responsibility for monitoring the quality of internal controls to ensure that the financial performance of the Company is properly measured and reported on. The committee, amongst other things, determines and examines matters relating to the financial affairs of the Company, including the terms of engagement of the Company’s auditors and, in consultation with the auditors, the scope of the audit. It receives and reviews reports from management and the Company’s auditors relating to the half yearly and annual accounts and the accounting and the internal control systems in use throughout the Company. The audit committee has unrestricted access to the Company’s external auditors.

Remuneration Committee: the remuneration committee is comprised of Gerry Brandon and Nigel Burton, and is chaired by Gerry Brandon, non-executive Chairman. The remuneration committee reviews the performance of the executive director and makes recommendations to the board in respect of the directors’ remuneration and benefits packages, including share options and the terms of their appointment. The remuneration committee also makes recommendations to the board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. In exercising this role, the directors have regard to the recommendations put forward in the QCA Code and, where appropriate, the QCA Remuneration Committee Guide and associated guidance.

Audit Committee: the audit committee is comprised of Nigel Burton and Gerry Brandon, and is chaired by Nigel Burton, non-executive director. The audit committee has the primary responsibility for monitoring the quality of internal controls to ensure that the financial performance of the Company is properly measured and reported on. The committee, amongst other things, determines and examines matters relating to the financial affairs of the Company, including the terms of engagement of the Company’s auditors and, in consultation with the auditors, the scope of the audit. It receives and reviews reports from management and the Company’s auditors relating to the half yearly and annual accounts and the accounting and the internal control systems in use throughout the Company. The audit committee has unrestricted access to the Company’s external auditors.

Matters reserved for the board: Among the matters reserved for the board are the responsibility for the overall management of the Company, approval of its long-term objective and commercial strategy, the review of performance in light of said strategy, ensuring the maintenance of a sound system of internal control and risk management, as well as corporate governance matters such as determining the independence of directors and considering the balance of interests between shareholders, employees, customers and the community.

Share Dealing Code: the Company has adopted a share dealing code for the directors and certain employees, which is appropriate for a company whose shares are admitted to trading on AIM (including relating to the restrictions on dealings during close periods in accordance with MAR and with Rule 21 of the AIM Rules for Companies) and the Company takes all reasonable steps to ensure compliance with the share dealing code by the directors and any relevant employees.

Departures from QCA Code: the Company currently departs from the QCA Code in a number of respects, and in particular:

(i) Evaluation of board performance: the board currently runs a self-evaluation process on board effectiveness. At the current stage of the Company’s development, assessment of the board’s performance and that of its committees will continue to be undertaken by the board as a whole, led by the Company’s chairman. Although the Company has no formal procedure for measuring the effectiveness of the board, the board will be carefully reviewing its effectiveness and the need to refresh its membership by reference to financial performance, adherence to budgets and the overall growth of the Company and taking account of the opinions and insights of its auditors, Nominated Adviser, broker, legal and other advisers. The method of assessing board effectiveness and performance will be reviewed on a continuing basis.

(ii) Succession planning: the Company has not adopted a policy on succession planning in particular with regard to the Company’s chief executive, Simon Humphrey. The chief executive is however required to give twelve months’ notice under his contract of employment if he wishes to leave the Company. the board proposes to consider succession planning as part of its regular review of Board effectiveness.

(iii) Board diversity: the Company is committed to a culture of equal opportunities for all employees regardless of gender. The board will be diverse in terms of its range of culture, nationality and international experience. All directors are currently male. If it is agreed to expand the board (or if and when new replacement directors are sought in the future), the board will, subject to identifying appropriate candidates, look to fill at least one of the vacancies with a female director.

(iv) Senior Independent Director: the Company does not have a director designated as a Senior Independent Director. In light of the size of the board, and the Company’s stage of development, the board does not consider it necessary to appoint a Senior Independent Director at this stage, but will nevertheless keep this under review as part of the board’s evaluation on board effectiveness.

For further information, see below:

Business description (See “Investment Case”)
Directors and Responsibilities (See “Board”)
Advisers and Nomad (See “Advisors”)
Terms of reference for the Audit Committee
Terms of reference for the Remuneration Committee
Anti-bribery Policy

Documentation and announcements

Annual and Interim Reports and Accounts (See “Financial Results”)
Shareholder communications and AIM notifications (See “Regulatory News”)
Articles of Association
Admission Document (See “Financial Results”)

This page was last updated on 20 February 2020.

17 September 2020
Annual General Meeting – for more information click here.

14 February 2020
Extraordinary General Meeting – for the circular please click here.

30 September 2019
Preliminary announcement of financial results for 6 months to 30 June 2019

22 May 2019
Annual General Meeting from 2 p.m – For more information click here.

18 March 2019
Preliminary announcement of financial results for the year ended 31 December 2018

25 April 2018
Annual General Meeting – For more information click here.

29 March 2018
Preliminary announcement of financial results for the year ended 31 December 2017

13 September 2017
Preliminary announcement of financial results for 6 months to 30 June 2017

25 April 2017
Annual General Meeting

15 March 2017
Preliminary announcement of financial results for the year ended 31 December 2016

14 September 2016
Preliminary announcement of financial results for 6 months to 30 June 2016

26 April 2016
Annual General Meeting

16 March 2016
Preliminary announcement of financial results for the year ended 31 December 2015

16 September 2015
Announcement of interim results for 6 months to 30 June 2015

30 April 2015
Annual General Meeting

Turner Pope Note 18 June 2020 – Download PDF

The equity research analysts listed below currently write research reports on Modern Water plc. This list is subject to change at any time without notice. Please note that any estimates, forecasts or opinions contained in such research reports are those of the analysts alone and do not necessarily represent the estimates, forecasts or opinions of Modern Water plc, its board of directors or its management.

Such research reports are only intended for professional clients and eligible counterparties as defined by the FSA and are not intended for private individuals or retail investors. If you are a professional client or an eligible counterparty and are interested in obtaining copies of a research note you should contact the relevant analyst directly. Please note there is no obligation upon an analyst to make available any research report. Unless otherwise indicated, research reports cannot be obtained from Modern Water plc. Any research reports issued may have become out of date after publication and should be read accordingly.

Andy Thacker
Turner Pope Investments (TPI) Ltd
6th Floor, Becket House
36 Old Jewry
London
EC2R 8DD
turnerpope.com

Simon Humphrey
Chief Executive Officer

Simon Humphrey is a co-founder of the Company and has been CEO since Modern Water’s inception in December 2006. Simon oversees the day-to-day running of Modern Water, ensuring the Company and its investments progress successfully. He brings a host of water industry and capital investment experience to the role, and travels to Modern Water’s sites internationally to ensure their smooth operation.

 

 

Dr Nigel John Burton
Non-executive Director

Following over 14 years as an investment banker at leading City institutions including UBS Warburg and Deutsche Bank, including as the Managing Director responsible for the energy and utilities industries, Nigel spent 15 years as Chief Financial Officer or Chief Executive Officer of a number of private and public companies. Nigel is currently a non-Executive Director of AIM quoted companies Digitalbox plc, Corcel plc, eEnergy Group plc and Mobile Streams plc.

 

 

Gerard James Brandon
Non-executive Chairman

Gerard was appointed as Chairman of Modern Water plc in March 2020. He is CEO of Integumen plc. Previously, he joined Cellulac Limited (Ireland) as its Chief Executive Officer in May 2012 and assumed the same role for Cellulac plc in October 2013. In 1996 he became founder and CEO of Alltracel Pharmaceuticals PLC, where he built a team that oversaw numerous patents granted on refined cellulose. Alltracel was admitted to trading on AIM in 2001. In 2004, he was appointed as a Managing Partner for Farmabrand Private Equity. In 2009, he was appointed as an Executive Consultant to Eplixo Limited. He is a Fellow of the Ryan Academy of Entrepreneurs in Dublin.

Modern Water plc’s shares are admitted to trading on the AIM section of the London Stock Exchange. The company is not listed on any other exchanges or trading platforms.

Significant shareholders holding 3% or more
Helium Rising Stars Fund – 13.55%

Directors’ shareholdings
Gerard Brandon – (non-executive Chairman) – 1.9%
Dr Nigel Burton (non-executive director) – 0.86%
Simon Humphrey – 0.37%

Summary
Issued shares – 524,693,214 (as at 16 July 2020)
Shares not in public hands – 57.59%

No shares are held as treasury shares.
There are no restrictions on the transfer of these securities.

This share information was last updated on 16 July 2020.

Independent auditors
Grant Thornton LLP
3140 Rowan Place
John Smith Drive
Oxford Business Park South
Oxford
Oxfordshire
OX4 2WB

Nominated adviser
Cairn Financial Advisers LLP
Cheyne House
62-63 Cheapside
London
EC2V 6AX

Nominated Broker
Turner Pope Investments (TPI) Ltd
6th Floor, Becket House
36 Old Jewry
London
EC2R 8DD

Registrar
Neville Registrars Limited
Neville House, Steelpark Road
Halesowen
B62 8HD

Principal Bankers
Barclays Bank plc
1 Churchill Place
London
E14 5HP

REGULATORY NEWS

Relevant company information for MODERN WATER.