Announcing its full-year results for the 12 months ended 31 December 2011, Modern Water said that gross revenue, which stood at £27k in 2010, had exceeded £1 million for the first time, with sales in the second half of the year doubling those in the first.

A key highlight during the year was a major contract win for the world's first commercial desalination plant to use forward osmosis. In June 2011 Modern Water was awarded a contract to build the plant in Oman using its world-leading FO technology. The project has now moved to the delivery phase, with construction proceeding on target and the plant expected to be fully operational during the summer of 2012, after which time the revenues will start to be reflected in Modern Water’s 2012 results.

Modern Water's FO desalination technology reduces energy consumption by up to 30% compared with conventional reverse osmosis. Following the contract win the firm is now actively pursuing several major projects in the Middle East and said it goes into 2012 well placed to win further desalination contracts globally.

The company sees what it describes as “the stark reality of water scarcity in regions such as the Middle East” as providing an opportunity to provide long-term desalination solutions. Its pilot plant at Al Khaluf which came on stream in November 2009 is continuing to exceed all expectations and has been producing 100m3 of water a day for public supply.

Modern Water has also identified China as a particularly important country for future business - strong sales growth there led to its decision in 2011 to appoint its first non-executive Chairman for China. Alongside the Middle East, the Group has identified China as a country where water scarcity continues to pose a real threat to economic growth. China makes up 21% of the world's population but has only 7% of the renewable water resources. Water scarcity has been cited as the single largest impediment to China's long-term success.

Modern Water owns, installs and operates world-leading membrane technology and develops and supplies advanced systems for water monitoring. Its shares are currently traded on the Alternative Investment Market of the London Stock Exchange.

The firm’s patented Forward Osmosis (FO) technology has been proven to significantly reduce costs, lower energy consumption and lessen environmental impact in a variety of industries. With a sales presence in over 60 countries, the Group's Monitoring Division includes the world's only real-time continuous toxicity monitor and trace metal analysers for monitoring the quality of drinking water.

The company now operates as two distinct divisions that span its two main product groups: the Advanced Membrane Processes (AMP) division which includes the patented Forward Osmosis (FO) technology and the Monitoring Division which covers instrumentation technology.

The company said the membrane and monitoring aspects of the business have continued to present it with unique opportunities for cross-selling. During the course of 2011, Modern Water said it had made a greater distinction between the two core divisions in order to provide customers with greater choice and deliver real value to shareholders.

Future strategy is focussed on using its links with universities and research institutes and feedback from customers and constantly reviewing opportunities to source new and innovative technology to increase its existing portfolio of products.

Chinese spend in next five years on urban wastewater infrastructure  expected to reach $60bn

Commenting on the results, Neil McDougall, Executive Chairman of Modern Water, said:

"Appetite for Modern Water's technologies continued to grow in 2011. Not only was there commercial recognition for our FO technology by way of a £500,000 contract win in the Middle East, but we also increased sales in our Monitoring division which saw revenues break through the £1m mark.

"The commercial contract in Oman plays to the strengths of our desalination technology which is able to operate effectively in some of the worst conditions faced by the industry. It also offers considerable economic and environmental benefits compared with existing techniques. The new plant is on track for installation this summer and we are confident that it will pave the way for further contract wins in the future.

"We transformed our Monitoring division in 2011. This began with the purchase of Cogent Environmental in February and was followed by the acquisition of key water monitoring technologies from Strategic Diagnostics in December, which included leading toxicity monitoring brand Microtox. This division now includes a suite of complementary technologies that offer a major increase in customer choice on a global level. Modern Water expects to benefit from the division's steady revenue stream and we are confident of potential sales growth, particularly in China, where spending in the next five years on urban waste water infrastructure is expected to reach $60bn.

"Expertise in water technologies and dedication to sourcing, developing and supplying world-leading applications continues to drive our business. We significantly increased our patents during the year and are always looking to protect and enhance our technologies.

"Looking to 2012, our efforts are twin-tracked. We are focussed on the integration of our Monitoring businesses and increasing sales here at every opportunity. At the same time, we are driven by the prospects for our membrane business as we set our sights on this multi-billion dollar market."