Chairman''s and Chief Executive''s review
First-half 2017 announcement
The directors of Just Water International Limited are pleased to present the
cash flow and financial results for the six months ended 31 December 2016.
Cash Flow:
Cash flow has continued to be strong, generating $2.347 million (2015: $1.635
million) (+ 43.5%) from operations during the six-month period.
Debt:
At 31 December 2016, the company''s net bank debt position was $0.43 million
This compared to $1.12 million at the same time last year, and $0.06 million
at 30 June 2016. The increase in debt since year-end has arisen from
refurbishment of the newly purchased head office and bottling plant, and
increased stock levels in anticipation of the summer requirements.
Results:
Current Previous
half-year half-year %
$''000 $''000 change
Operating Revenue 7,959 7,913 1%
Non-Operating Revenue - 94
EBITDA 2,191 2,090 5%
Depreciation & Amortisation (969) (986) 2%
EBIT 1,222 1,104 11%
Interest (33) (57) 42%
Net profit before tax 1,189 1,047 14%
All key KPI''s showed positive trends during the period with Operating Revenue
increasing by $46,000 (+1%), EBITDA increasing by $101,000 (+5%) and EBIT
increasing by $118,000 (+11%).
Dividends:
The directors review the dividend policy of the company on a regular basis,
and based on the cash flow and results achieved, believe that the Company
will be in a position to recommend the resumption of a dividend for the full
year to 30 June 2017. The Company continues to operate a Dividend
Reinvestment Plan.
New head office and world-class bottling plant:
During September 2016, the head office relocated to our newly renovated
building at 103 Hugo Johnston Drive, Penrose, Auckland. The Prime Minister of
New Zealand, the Honourable John Key officially opened the building and
world-class bottling plant. The directors have had the building valued at 31
January 2017 at $4.6 million. The building was purchased in August 2015 for
$3.28 million and $1.05 million has been spent on refurbishment resulting in
a total investment of $4.33 million.
Health & Safety:
The ongoing health and safety of the Just Water team members, contracting
parties and visitors is a critical input into the company''s operations. The
goal is zero-harm and the culture of the company encourages everyone to
participate in our health & safety initiatives. We are pleased to advise that
during the recent WSMP audit that the external auditor is recommending to the
Accident Compensation Commission that we continue to retain our tertiary
(highest level) of qualification.
Audit:
The financial statements for the six months ended 31 December 2016 and 31
December 2015 are unaudited. The comparative information for the year ended
30 June 2016 is audited.
Bank covenants:
The Company was in compliance with all bank covenants as at 31 December 2016.
Expected Future Income Rental Streams:
At 31 December 2016 there continued to be in excess of $80 million expected
future rental income stream which is not recognised in the financial
statements. Consistent with prior disclosures, expected future rental income
streams have been calculated on the basis of the last month''s rental income
multiplied by the average customer life, which is in excess of seven years.
New Products:
At the Annual Meeting in December 2016, the Company, presented four new
products that are being brought to market during the current year. This
included a 10 litre Cask of spring water, a revolutionary Cask chiller, which
will chill Casks of both water and white wine, a desk top mini chiller and
the world''s first alcohol-free premium liqueur, branded Melambra Gold.
Management will actively pursue opportunities for all these products, as they
come to fruition, on a global scale.
Share buyback programme:
The board resolved, in accordance with section 65 of the Companies Act 1993
and the Company''s constitution that, effective from 22nd February 2016 until
20th February 2017, it would operate a share buyback programme. To date
322,450 shares have been purchased on market by the Company and cancelled
under this programme representing 0.36% of shares on issue at the
commencement of the share buyback programme.
The Company has resolved to operate the share buyback programme for another
12 month period from 22nd February 2017 to 16th February 2018. In accordance
with NZAX listing rule 7.6.1(a), the Company may make one or more offers on
market to acquire shares in the Company at the prevailing market price for
the shares at the time of purchase and such that the number of shares
acquired by the Company, together with the shares acquired by the Company in
the last 12 months under the buyback programme, does not exceed 5% of the
shares on issue as at the date 12 months prior to the date of the acquisition
of the relevant shares.
Depending on the timing of any such acquisition, the maximum number of shares
that the Company may acquire under the share buyback programme is 4,470,236
shares. Shares that are acquired by the Company under the share buyback
programme will be cancelled and the acquisitions and cancellations will be
notified to NZX in accordance with the NZAX listing rules. The Company is not
obliged to make any offer and reserves the right to cease the share buyback
programme at any time.
The Company will not purchase any shares under the share buyback programme
while it possesses any information that is materially price-sensitive but not
publically available. If the Company acquires price-sensitive information
that is not publically available, it will cease acquiring shares in the
Company until the relevant information is publically disclosed or ceases to
be materially price-sensitive.
As noted in previous reports, the decision to operate a share buyback
programme was driven by the board''s concern for shareholders about the lack
of trading of JWI shares. Although the board does not wish to see
shareholders sell out of the Company, the board recognises that some may need
the funds for other activities and the share buyback programme provides an
exit option for these shareholders.
Board:
I would again like to thank my fellow directors, Ian Malcolm and Brendan Wood
for their ongoing input and support in the advancement of the company.
Staff:
The directors would like to thank the staff for their commitment to achieving
continuous improvement and striving to provide the highest level of service
to our customers.
Tony Falkenstein
Chairman and Chief Executive
End CA:00296876 For:JWI Type:HALFYR Time:2017-02-16 16:44:48