JWI
07/12/2015 15:14
ADDRESS
NOT PRICE SENSITIVE
REL: 1514 HRS Just Water International Limited
ADDRESS: JWI: Annual Meeting - Chairman & CEO Address
Just Water International Limited
Annual Meeting
Boardroom Just Water International Ltd
114 Rockfield Rd, Penrose
Chairman's Address, Tony Falkenstein
11.00 am, Monday, 7 December 2015
Chairman's Address:
Good Morning. I am Tony Falkenstein, Chairman of the Board and also Chief
Executive. I'd like to welcome you to this, the twelfth Annual Meeting of
Just Water International Limited. This is the first and last time it will be
held on these premises; as next year we will be operating in our newly
acquired premises in Hugo Johnston Drive.
It's now my pleasure to declare open this 12th Annual Meeting of Just Water
International Limited.
I would like to welcome all shareholders. We also have in attendance Aina
Lorilla and Keren Blakey from our auditors PricewaterhouseCoopers and Kelvin
Preston, our legal advisor from Harmos Horton Lusk Limited.
I confirm that a quorum is present and that the meeting is duly constituted.
The notice of meeting has been circulated to all shareholders and I propose
to take it as read.
Are there any apologies?
Let me introduce my fellow directors and Chief Operating Officer.
o Ian Malcolm, Chairman of the Audit Committee
o Brendan Wood, an independent director, and Chairman of the Remuneration
Committee
o And Eldon Roberts, our Chief Operating Officer and CFO
The first item of business today will be the receipt of the company's Annual
Report, followed by a few remarks from me. There will be a full opportunity
for your questions after my remarks.
We will then proceed with the other three resolutions, which were notified in
the formal Notice of Meeting being the reappointment of both Ian Malcolm and
Brendan Wood as directors and secondly providing approval for the board to
set the remuneration of the auditors.
As an aside, I do have to say that the NZX who are required to review the
resolutions, charge excessively for the privilege. In this case, for the
review of 5 resolutions they invoiced us for 9.5 hours at $650 per hour; they
have agreed to reduce the rate, but not the hours. Although in itself not a
bill that will send the company broke, it is a continuation of the
monopolistic and bullying tactics they use to extract fees from members. It
is no wonder that this is one of the worst performing Stock Exchanges in the
world. We will be referring the NZX to the Commerce Commission for continuing
its practice of abuse of its monopoly position as well as price gouging.
After we have completed the resolutions, I will then formally close the
meeting and invite you to join the directors and other Just Water personnel
on an informal basis. You will have realised that we are very parsimonious,
in terms of the basic Annual Report that you would have received, this
meeting location and even the biscuits after this meeting - I am sorry, but
club sandwiches are out these days! I assure you that this parsimonious
approach is embedded within the Company in the interests of all shareholders.
I record that proxies have been received and are held by myself totalling
64,874,170 shares representing 72.3% of the shares on issue.
The Minutes of the previous Annual Meeting of Just Water International
Limited, held on 23 October 2014, have been available for inspection at the
registered office of the Company, and are also available at this meeting.
In accordance with normal practice, these Minutes were considered by the
company's board at a meeting following the last Annual Meeting, and were
regarded, at that time, as a true and correct record of that meeting
It is therefore proposed to take them as read.
Is there any discussion on the Minutes? (There is no discussion.)
We come now to the resolutions set out in the Notice of Meeting.
In dealing with these, I will conduct a vote taken on the floor of the
meeting by a formal show of hands.
The first item on the Agenda is the receipt of the Company's Annual Report
for the year to 30 June 2015, including the auditors' report be received.
I will shortly deal formally with that Resolution and the others that have
been notified.
However, it is appropriate that I take this opportunity to make some
preliminary comments.
The Annual Report has been made available to you as shareholders and I don't
intend to repeat what is contained in that document.
As a mature business, debt reduction from operating activities has been our
major objective. As you know, in the rental business, which requires deep
pockets when you are growing, spits out cash as new business reduces. I am
pleased to say that our calculated interest bearing debt excluding proceeds
from the sale of the Australian operations for the year ended 30 June 2015,
reduced from $12,816,000 to $10,811,000. In addition, we sold our Australian
operation for NZ$10,874,000 which resulted in an actual net funds balance of
$63,000 as at the 30 June 2015. As at November 30th 2015 calculated interest
bearing debt excluding proceeds from the sale of the Australian operations
and the purchase of the building from operating activities had reduced
further to $9,853,000.
As noted earlier we were pleased to announce that, after balance date, we
have purchased a building for Just Water's Head Office and bottling plant at
a cost of $3.3 million. We are refurbishing the building, including an
upgraded bottling plant, and will be moving from these premises.
In terms of a dividend, as stated, there is no intention to pay one in the
current year. The Chairman stated at the previous Annual Meeting, that once
we achieve a calculated interest bearing debt to equity ratio excluding
one-off transactions such as the sale of the Australian entities and the
purchase of the building of 60:40 we would reconsider this position. This
ratio is calculated as 74:26 as at 30 November. Nothing has changed at this
time in respect of the director's position on this matter. We continuously
are looking for suitable acquisitions, to take us on the next growth path,
and feel that this is in the best interests of all shareholders, as was
stated in The Harvard Group Takeover ("Harvard") response.
Since I returned in an operating role a year ago, we have restructured the
business to reflect the changes in revenues, and really tidied the Company up
in terms of structure and culture. In the most recent Kenexa Survey, which
reflects employee satisfaction in every area of the business, Just Water was
recognised as one of the 3 most improved companies over the past year. We
believe that with a contented staff, the long term results will reflect the
level of contentment.
It would be remiss of me not to mention the takeover offer by Harvard a year
ago - some of you purchased shares at par and higher, but it was with
knowledge that this was an entrepreneurial company, and you would have
expected that there would be highs and lows. I did receive emails from people
who had purchased at the "low" over the previous 4 years and were thrilled
with the takeover offer as a result of the gain on their investment of up to
50%. Those who had purchased shares prior haven't been so lucky.
I was also delighted that shareholders holding about 20% of the shareholding
in JWI either took a long term view on their investment, or decided that they
would get an increased return if they remained as shareholders, and thus were
prepared to back the focus Harvard outlined in the takeover offer, as well as
my leadership of the Company. In particular, I welcome our newest top 10
shareholder, the Milford Active Growth Fund who took the opportunity to come
onto our Register during the takeover period, purchasing over 3 million
shares.
One other matter I should mention. In the original shareholder announcement,
it was stated that we intended to apply to de-list the Company from the NZX,
and go with an alternative Exchange. The process to do that was more complex
than we thought, so the decision has been made to stay listed on the NZAX.
In terms of the NZAX, in my opinion, this is a satisfactory exchange, and
could have been improved with a few changes, rather than go with NXT, which
seems to be a platform devised by 2 economists and a lawyer, with no
commercial rationale! In my opinion it is doomed to failure. NZAX started
off with 15 members about 12 years ago, and now has 22 members, while NXT
started off with 1 member and now has 2. I would wager with Tim Bennett, that
NXT will never ever achieve 15 members, and his successor will close it down.
If I am wrong, I will send him a bottle of French champagne! NXT is far more
complicated for a small business to comply with, although its provisions re
continuous disclosure do appeal. It is not our intention to move from the
NZAX and although NZX have increased fees 5-fold, (we did negotiate a 2-year
grace period), they have stated that they will continue to support the NZAX
Exchange into the future.
I want to thank my fellow directors, each of whom has made an excellent
contribution to Just Water's governance. With the resignation of the former
directors, Ian Malcolm has come back on board - he knows the business well,
having been my personal financial advisor for over 25 years. Brendan also
knows the Company well, having done a lot of our legal work for over 20
years. With the total change of the Board, I deemed it necessary to bring on
directors with knowledge of the Company. Each of them brings real, valuable
and complementary skills to the business.
It is important that we continue to ensure that the Company's governance
structures met the highest standards, and I am confident that I couldn't have
2 better directors than these two to make that happen.
As Ian and Brendan were appointed during the year, we will be seeking their
re-appointment by resolution today.
I am pleased that our auditors have given us a clean bill of health and also
that we have complied with all bank covenants.
Finally, I want to thank the entire Just Water team, for their efforts over
the year. It was sad to lose the people in our Australian operation, who had
performed well in trying conditions, but I do think this sale was in the best
interests of shareholders.
I now ask if there are any questions on my remarks. (There were no
questions).
We will now move on to the formal business and resolutions which were advised
in the Notice of Meeting:
Resolution 1
As I have indicated, Resolution 1 is That the Annual Report for the Company
for the year ended 30 June 2015, including the Auditors' Report, be received.
I am holding proxies totalling 64,874,170 voting in favour of the resolution.
I would like to move the resolution.
All those in favour please raise your hand.
All those against, please raise their hands.
I declare the motion carried.
Resolution 2
Resolution 2 relates to the reappointment of Auditors and their Remuneration
The Resolution is: "That the company's board of directors be authorised to
fix the auditors' remuneration".
I am holding proxies totalling 64,874,170 voting in favour of the resolution.
I would like to move the resolution.
All those in favour, please raise their hands.
All those against, please raise their hands.
I declare the motion carried.
Resolution 3
Resolution 3 and 4 relates to the election of directors - so firstly Ian
Malcolm. He has made himself available for election.
The Board is recommending that he be re-appointed to the board.
The Resolution is: That Ian Malcolm be elected as a director of the Company.
I am holding proxies totalling 64,871,863 voting in favour of the resolution.
I would like to move the resolution.
All those in favour, please raise their hands.
All those against, please raise their hands.
I declare the resolution carried and that Ian Malcolm is elected to the
board.
Resolution 4
Resolution 4 also relates to the election of directors - so Brendan Wood has
made himself available for election.
The Board is recommending that he be re-appointed to the board.
The Resolution is: That Brendan Wood be elected as a director of the
Company.
I am holding proxies totalling 64,874,170 voting in favour of the resolution
I would like to move the resolution.
All those in favour, please raise their hands.
All those against, please raise their hands.
I declare the resolution carried and that Brendan Wood is elected to the
board.
6. General Business
Is there any General Business or are there any further questions?
There were two key questions from the floor that were not already covered in
the Chairman's Address above:
1. As the proceeds from the sale of the Australian business operations
resulted in the repayment of most of the interest bearing debt of the company
would the directors consider a share buy-back or special dividend?
The Chairman responded that the board is not proposed to take either action
at the current time and continues to look for acquisitions that meet the
strategic objectives of the company given there was up to a $30 million
funding facility available to the company.
2. A shareholder enquired as to the fees and current outstanding balance of
the Bartercard balance owed to the company.
The Group COO/CFO responded that the fees were of the same nature as a credit
card transaction and the current balance was $178,000 having reduced from
$324,000 as at 30 June 2015.
Ladies and Gentlemen: That concludes this Annual Meeting; and I formally
declare the meeting closed.
Thank you all for attending, and I invite you to join us for a cup of tea
with staff in the lunch room to the right as you exit the Boardroom.
End CA:00274750 For:JWI Type:ADDRESS Time:2015-12-07 15:14:06
