JWI
28/08/2012 14:43
FLLYR
REL: 1443 HRS Just Water International Limited
FLLYR: JWI: Preliminary Full Year Report and Release for 30 June 2012
Chairman's and Chief Executive's review
Just Water International Limited
Results for year ended 30 June 2012
Just Water International Limited (JWI) presents its full year results for the
year ended 30 June 2012.
Consolidated result
2012; 2011;%
$'000; $'000; change
Operating Revenue: 29,931 ; 32,489; (7.9%)
EBITDA: 8,187; 8,662; (5.5%)
Depreciation & Amortisation: (4,543); (5,449); 16.6%
EBIT: 3,644; 3,213; 13.4%
Interest: (1,571); (1,918); 18.1%
Net profit before tax: 2,073; 1,295; 60.1%
Tax: (317); (477); 33.5%
NPAT: 1,756; 818; 114.7%
Although revenue has reduced by 7.9%, net profit before tax has increased
through on-going cost control, lower depreciation from reduced capital
expenditure during the past three years, interest savings from the
accelerated debt repayment programme and exchange variations. EBITDA and EBIT
include a net positive exchange gain $0.154 million (30 June 2011: loss of
$0.352 million).
The result includes eleven months of the Company's new acquisition, Creative
Images, renamed Just Plants, which added $0.590 million to revenue and $0.253
million to EBIT.
Net cash flow generated from operating and investing activities totalled $3.2
million for the year, compared to $4.1 million in the previous year. As a
result we have been able to reduce total bank borrowings during the year by
NZ$3.1 million (previous year $3.5 million). As previously advised, debt
reduction has been the main driver in the past year.
New Zealand
2012; 2011; %
$'000; $'000; change
Operating Revenue: 19,705 ; 21,358; (7.7%)
EBITDA: 5,797; 5,877; (1.4%)
Depreciation & Amortisation: (3,323); (3,990); 16.7%
EBIT: 2,474; 1,887; 31.1%
Interest: (1,123); (1,497); 25.0%
Net profit before tax: 1,351; 390; 246.4%
Tax: (328); (198); (65.7%)
NPAT: 1,023; 192; 432.8%
(Net of Elimination Entries)
The New Zealand operations displayed improved profitability as a result of
the reasons noted above, albeit the exchange gain of $0.164 million also
assisted in the significant increase in EBIT contribution over the previous
year.
The overall base of customers for which recurring income is received reduced
to 37,591. This is a 6.3% reduction for the year. The reduction in this rate
of decline from the previous year 10.9% is an indicator that we are on the
right track however the Board will not be satisfied until we show growth in
the customer base.
The Company has undertaken various initiatives during the year. The 'Just
Water Filter' has been sold online, and through various other channels such
as kitchen designers and plumbers. For the coming summer we will be selling
the product in selected stores. Filters continue to be a core part of our
business in Australia and we firmly believe that the New Zealand market will
further develop in this sector.
The Company has continued to publicise the issue of obesity, and has
successfully created debate in the community through appearances of the CEO
on television, radio and the press.
The Company is still the only 'large' bottled water company in New Zealand
that has all its bottling plants certified to the stringent ABWI
International standards, and the only company in New Zealand that could
comply. The Company believes that organisations changing to a
'non-certified' supplier are taking a corporate risk.
The directors are satisfied with the progress of Just Plants (formerly
Creative Images). The operation has been merged into the same Wellington
premises as Just Water, and we are budgeting to grow this business in the
current year
Australia
2012; 2011; %
$'000; $'000; change
Operating Revenue: 10,226; 11,131; (8.1%)
EBITDA: 2,390; 2,785; (14.2%)
Depreciation & Amortisation: (1,220); (1,459); 16.4%
EBIT: 1,170; 1,326; (11.8%)
Interest: (448); (421); (6.4%)
Net profit before tax: 722; 905; (20.2%)
Tax: 11; (279); n/a
NPAT: 733; 626; 17.1%
(Net of Elimination Entries)
During the year the General Manager resigned, and there was a delay of six
months before we appointed a successor.
Despite this delay, the base of customers for which recurring income is
received reduced slightly to 10,203. This is only a reduction of 0.6% for
the year compared to the previous year reduction of 8.1% and reinforces the
Board's belief that there are growth opportunities available in Australia.
The Company has launched the Just Water Filter as an online product
www.justwaterfilters.com.au, and has also launched a "challenger brand"
online water cooler product under the name "The Watercooler Company"
-www.thewatercoolercompany.com.au
Dividend
As advised in the first half review, there will be no dividend in the current
year, as the Company focuses on debt reduction, profitability and growing the
business.
Audit
Just Water International Limited's accounts have been audited and an
unqualified audit opinion was given.
Board
The directors are still considering the appointment of another director to
the Board.
Diversity
The Company does not discriminate in terms of gender, race, colour or
religion in the appointment of directors, management or staff. The NZX is
seeking to introduce a diversity listing rule. The gender of directors and
key management are as follows:
Male; Female
Non-executive directors: 2; 1
Key Management - New Zealand: 4; 5
Key Management - Australia: 3; 2
Total: 9; 8
Bank Facilities
The Company has complied with all bank covenants at 30 June 2012. Net bank
debt at year end was $18.9 million (June 2011 $22.0 million). Debt has
decreased by $3.1 million over the past year, and it is expected to reduce by
a similar amount in the current year. The Company has an unutilised funding
facility of $5.4 million at 30 June 2012 (June 2011: $5.4 million), and has
funding capability in place for growth and exploring further acquisitions.
During the year the Company voluntarily requested the bank to reduce the
facility by a further $2.0 million in order to reduce on-going facility fees.
Since balance date a further $3.5 million has been reduced for the same
reason leaving an unutilised facility of $1.9 million as at the date of this
report.
Receivables
At 30 June there continued to be in excess of $80 million of expected future
rental income stream which is not recognised in the financial statements.
Expected future rental income streams have been calculated on the basis of
average customer life. This calculation of future receivables is used as
part of the monitoring of compliance for our bank covenants.
Summary
Overall trading conditions continue to remain challenging in both countries.
The Company has focused on debt reduction as its prime objective over the
past 2 years, which has seen a reduction of $6.6 million in its debt exposure
in that time. In the current year, the Company will maintain debt reduction
as a principal objective, while adding a second objective - to increase its
base of customers.
The directors are pleased with progress over the last year. The Company is
in a sound position both financially and people-wise, giving it the
foundation on which to expand.
Staff and Shareholders
The directors wish to acknowledge the efforts of the management team and all
staff for their efforts throughout the year. The management team has
developed into a strong unit for the future.
Yours sincerely
Tony Falkenstein (CEO)
For further information, contact:
Tony Falkenstein, CEO 021 950 856
End CA:00226551 For:JWI Type:FLLYR Time:2012-08-28 14:43:51
