Amiad (AIM: AFS), a leading global producer of water treatment and filtration solutions, announces its preliminary results for the year ended 31 December 2020.
· Revenue of $104.6m (2019: $115.6m)
· Gross margin improved to 39.9% (2019: 38.9%)
· Operating profit increased to $5.4m (2019: $3.1m)
· Profit before tax increased to $4.1m (2019: $0.08m)
· Cash generated from operations increased to $22.7m (2019: $12.9m)
· Net cash at 31 December 2020 of $23.5m (30 June 2020: $12.2m net cash; 31 December 2019: $12.5m net debt)
· Cash and cash equivalents at 31 December 2020 of $35.3m (30 June 2020: $27.8m; 31 December 2019: $15.0m)
· Successful execution on strategy to improve operations:
o Introduced further manufacturing automation and other process enhancements
o Maintained tight cost control and introduced cost mitigation measures in response to COVID-19
· Took actions in response to the pandemic to ensure that production continued in each territory, in accordance with local regulations and health and safety procedures
· Total sales were lower, particularly in the Industry segment, due to reduced market activity as a result of the pandemic - however the Company did not receive any order cancellations of a material nature
· Secured a new five-year global distribution agreement with Netafim, the global leader in precision irrigation solutions, for Amiad's disc filtration products for the irrigation market
· Post period, launched the Spin Klin™ Nova innovative disc filtration system that offers industry-leading efficiency
Dori Ivzori, Chief Executive Officer of Amiad, said: "I am pleased to be reporting an overall great set of results for 2020. While our sales were lower due to the reduced global activity resulting from the COVID-19 pandemic, particularly in the Industry segment, we didn't receive any material order cancellations and we expect the postponed projects to convert to orders as markets improve. Moreover, thanks to the actions that we took at the end of 2019 to improve operational efficiency, which we continued to progress this year, we significantly increased our cash generation. Our financial position was also bolstered with the investment from FIMI. Consequently, the fundamentals of our business have been greatly strengthened.
"Looking ahead, we entered 2021 with a significantly higher backlog than at the same point of the prior year and there has been a strong increase in sales activity, reflecting improved conditions in all of our markets. We are greatly encouraged by this resumption in activity, while remaining cautiously optimistic that recovery will be sustained as the year progresses. We expect to report revenue growth in both the Irrigation and Industry segments for the full year compared with 2020 and to continue to drive improvements in the efficiency of our operations, subject to no further unexpected disruption arising from the pandemic. Additionally, with our strong financial position, the Board intends to explore acquisition opportunities to accelerate our growth. As a result, we continue to look to the future with optimism."