Why the Envirosuite (ASX:EVS) share price is zooming up 26% today

The Envirosuite Ltd (ASX: EVS) share price strapped a rocket on today, zooming higher after a positive market update on Q1 sales

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The Envirosuite Ltd (ASX: EVS) share price strapped a rocket on today, zooming 25.8% higher to reach 20 cents in early afternoon trade. This follows a positive market update on its first quarter sales performance for the 2021 financial year.

What does Envirosuite do? 

Envirosuite is a global leader in environmental solutions, monitoring and managing weather impacts. The company uses its combination of air quality and metrology consultancy thoughreal-time and predictive technologies to reduce risk and improve efficiency and safety among industry and communities throughout the world.

The company operates in various sectors including construction, industrial, mining, wastewater, airports and cities.

First quarter update

Envirosuite reported total sales of $14.7 million in the three-month period ending September 30. This is despite the global impact of COVID-19 resulting in some deferral of spending by customers.

The company achieved strong contract renewals and new sales volumes for Q1 FY21 which was reflected by $12.2 million from ongoing business and $1.2 million in new targeted recurring sales. An additional $1.2 million was generated in one-off sales of equipment and services.

Customers remained active across all geographical regions and industry sectors. Most notably, Envirosuite secured an airport contract renewal by the AENA group, which manages 46 airports in Spain.

In the mining sector, the company carried out additional work for Vale Brazil and BHP Chile. Waste sector highlights included an odour monitoring project with the City of Denver, Colorado, and an outdoor management system for Verde South America in Chile.

Envirosuite signed water contracts with Welsh Water UK, and with the City of Garland Water Utilities Texas for odour monitoring and sewage treatment plants.

Envirosuite advised that its forward sales pipeline remains strong and currently stands at $28 million for FY21.

What did management say

Envirosuite CEO Peter White was happy with the result given the current climate, and upbeat about the company's future growth. He said:

Contract renewals and new sales growth were spread across all the regions and industry sectors in which we operate. Q1 marks the commencement of the sales and marketing efforts post-integration which are steadily gathering momentum as noted in our latest release with a 300% increase in new sales leads from July to September. Coupled with the strong forward pipeline, this augers well for our sales growth to accelerate in coming quarters

Mr White highlighted the importance in Envirosuite' presence to communities, saying:

One of the effects of COVID-19 for Envirosuite has been that the world is more aware than ever of the importance of not only ensuring environmental compliance, but of going beyond compliance and actively managing outcomes for the benefit of communities.

Envirosuite's ability to help our customers maintain and enhance their social licence to operate will be a major focus of our sales growth strategy in the years ahead.

Foolish takeaway

Envirosuite has thrived throughout the COVID-19 pandemic, achieving robust sales so far this year. With the company looking to accelerate its growing revenue in FY21, I think Envirosuite is worth keeping an eye on for future investment.

Motley Fool contributor Aaron Teboneras 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.

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