Envirosuite (EVS) shares have made further strong gains following a heavily oversubscribed capital raising at $0.28 which will raise $10m in additional capital for the group over a two tranche placement. Trading at new record highs, we have elected to take further profits on this position which has booked stunning gains of around 400% for your account this calendar year. The sale today is also at around a 30% premium to the placement price and precedes the issue of those new securities.
EVS has a great product that assists with environmental management in a range of settings including air & water monitoring solutions which are being adopted in numerous cities, waterways & mine sites internationally. The potential for the business to enter the Chinese market has lifted the profile and visibility of the business model to investors over the last month lifting the valuation of the business. We remain optimistic here over the medium to longer-term and EVS are now well funded to accelerate their growth. We are, however, conscious of the much-improved valuation for the stock, which is arguably expensive at current prices. To continue to deliver further near term gains, the business will need to continue to execute on its own forecast to more than double revenue’s through fy20 and beyond.