DeepVerge revenues rise as it expands footprint

Environmental and life science artificial intelligence (AI) company DeepVerge reported unaudited revenues of £4.4m in 2020 in a trading update on Monday, up from an audited £1.02m in 2019.

The AIM-traded firm said aggregate unaudited revenues increased to £6.1m including £1.7m relating to Modern Water in the pre-acquisition period to 9 November.

Strong sales in the fourth quarter delivered the company’s first EBITDA-profitable three month period, excluding exceptional costs associated with the acquisition of Modern Water.

The board issued revenue guidance of £10m for 2021, and said that in addition, several large projects, including two multi-million pound opportunities due for decision in 2021, had the potential to drive higher growth.

Cash and debt available at year-end totalled £2.97m, with £1.47m in cash and cash equivalents on 31 December, and a £1.5m flexible loan facility available to be drawn.

DeepVerge said the completion of the Modern Water acquisition in November had allowed a backlog of orders to be fulfilled, and said an acceleration of order books in the last quarter was achieved from new Labskin services.

The board said there was a “significant increase” in opportunities to grow through its core environmental health and life sciences divisions, reporting that its personalised consumer skin microbiome profile service was in beta testing, with updates to follow.

MicrotoxPD equipment, integrated with AI and pathogen detection systems, were being deployed in multiple jurisdictions, with data aggregated for real-time detection in wastewater said to be growing.

Microtox BT breath test field trials were continuing across the European Union, with further updates to be provided later in the quarter

“Despite Covid-19, DeepVerge has had yet another strong year of 300%-plus revenue growth, topped off with our first profitable quarter,” said chief executive officer Gerard Brandon.

“The group's business has evolved into two distinct but inter-linked business divisions, Labskin's life science offering and, following the acquisition of Modern Water in November, a world leading environmental health solution, underpinned by our AI as a service expertise.”

Brandon said the newly-combined footprint had extended Labskin's reach into the US, China and Japan, directly next to many of its largest clients.

“Group sales, including recurring revenues, look set to continue strong growth as our order book of existing and new clients expands across the US, Asia and Europe.”

At 1525 GMT, shares in DeepVerge were up 5.45% at 36.38p.