- Water treatment and filtration solutions company Amiad said profit more than halved, driven by the adoption of a new accounting standard and fall in margins despite an uptick in revenue in the first half of the year.

For the six months ended 30 June 2019, pre-tax profit fell to $0.9m from $2.2m a year, as revenue rose to $58.4m from $56.2m a year earlier.

The company said the fall in profit was primarily driven by the impact of adopting the new accounting measure, IFRS 16.

Gross margin fell to 39.2% from 42.2%, which the company primarily blamed on sales mix and currency headwinds.

'We experienced currency headwinds and the adoption of IFRS 16 had a negative impact on the financial reporting,' the company said. But added that it was 'pleased' with the operational progress that was achieved during the first half of the year.

Looking ahead, the company said it had entered the second half of 2019 with a higher backlog than at the same point of the prior year as well as a larger sales pipeline, which company expected to convert to orders during the rest of this year.

'We expect a ramp up in sales of the new irrigation products to contribute to growth in the irrigation business unit while the Tequatic plus filter is expected to contribute to growth in the industry business unit,' the company said.

'We also anticipate an improvement in gross margin for the full year over the first half of 2019. We expect to experience currency fluctuations in H2, but the full extent is not known presently. Despite this, we anticipate good revenue growth for full year 2019, broadly in line with market expectations,' it added.

At 8:02am: [LON:AFS] Amiad Water Systems share price was +2p at 270p

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