Purified water dispenser maker Waterlogic saw revenues rise by nearly a fifth in the first half but the group did note a worrying drop in business-to-business (B2B) indirect channel sales.

Revenue increased by 19.2% from $39m to $46.5m during the six months to June 30th. Waterlogic said that organic revenue growth in B2B direct, and rental and service channels was "healthy" at 10% and 18%, respectively, though this was offset by the B2B indirect channel which saw organic revenues decline 13% on the back of difficult macroeconomic conditions.

The group saw signifiant destocking by distributors with a major European client not ordering products in the first half. Indirect sales in the US meanwhile, continued to be affected by the restructuring of a major customer.

Nevertheless, B2B direct, rental and service revenues accounted for 37% of total revenue in the first half, compared with 32% the year before.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 24.1% from $5.9m to $4.5m do "significant" business-to-consumer (B2C) start-up costs, operating expenses within acquired businesses and an increased cost base reflective of a listed entity on AIM (the company listed last summer). The group swung to a reported loss before tax of $0.2m compared with a profit of $2.27m last year, mainly due to higher administrative expenses.

The gross margin increased to 59.7%, from 57.1% in the first half of 2011 and 59.2% at the end of the year.

Waterlogic's Chief Executive Officer Jeremy Ben-David said: "As with previous years, the board expects the group to experience a H2 weighting in terms of revenue. Although the economic outlook remains challenging, especially in Europe, we remain well positioned to continue to expand and invest in our operations, make attractive acquisitions and deliver growth."

Net cash surged from $1.1m to $37m during the period.

Shares had fallen 2.88% to 202p in early trading on Thursday.

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