JWI
16/02/2016 16:07
HALFYR
PRICE SENSITIVE
REL: 1607 HRS Just Water International Limited
HALFYR: JWI: Just Water International Ltd - Half Year Report
Chairman's and Chief Executive's Review
First-half 2016 Announcement
The directors of Just Water International Limited are pleased to present the
cash flow and profit results for the six months ended 31 December 2015.
Cash Flow:
Cash from operations has continued to be strong as expected from a business
operating in a mature market. During the current six months the Company
generated $1.635 million. As noted in previous Chairman's reviews, the board
remains focused on cash flow generated by the business as ultimately this is
the purest form of measurement of any company's performance.
Debt:
As at 30 June 2015 the Company's net debt position was "in funds" i.e. the
Company had no debt. As previously advised to shareholders, a new building to
house the Head Office and Auckland bottling plant was purchased by the
Company during the period for $3.3 million.
The graph below represents actual net interest bearing liabilities for the
Group.
[Refer to graph in the attachment]
The following graph represents calculated interest bearing liabilities
excluding the proceeds from the sale of the Australian entities and the
purchase of the new building.
[Refer to graph in the attachment]
A reconciliation of calculated interest bearing liabilities, excluding
proceeds from the sale of the Australian entities and the purchase of the new
building as at 31 December 2015 ($'000) is set out below:
Actual Net Bank Debt $ 1,727
Deduct: Net funds received from the sale of Australian entities
$ 10,874
Add: Cost of new building $ 3,279
Calculated interest bearing liabilities as per graph above
$ 9,322
Dividends:
The directors will not be recommending payment of a dividend, until
calculated interest bearing liabilities are repaid using surplus funds
generated from operations.
The directors will review this decision on a regular basis.
Results:
Continuing operations
[Refer to table in the attachment]
Operating Revenue from continuing operations declined $149,000 (2.0%) from
the corresponding period of the previous year, although EBITDA increased by
$248,000 (13%). Excluding the $191,000 restructuring costs disclosed in the
December 2014 Half Year Report, EBITDA would have increased by $57,000 (3%).
This reflects the ongoing productivity improvements and cost control in the
business.
EBIT increased by $415,000 (60%). The key difference between EBITDA and EBIT
movements is the reduction in the depreciation charge between the two
corresponding six month periods as a result of assets being written-off over
their estimated economic life.
Purchase of new building:
On 1 August 2015, the Company purchased a building at 103 Hugo Johnston
Drive, to house its Head Office and Auckland bottling plant. The previous
owner leased it from Just Water until December 2015, and since then the
Company has been going through the process to get consent to make the
building suitable for its requirements. The plan is to move into the new
building during 2016. The costs of shifting the current plant and upgrading
the building is expected to be about $1.5 million.
De-listing from the NZAX:
In the 2015 Annual Report, the directors stated their intention to de-list
from the NZAX. The resolution was withdrawn prior to the annual meeting, as
the directors considered the advantage to shareholders in being listed on
this exchange outweighed the costs and benefits of being listed on another
exchange.
Audit
The financial statements for the six months ended 31 December 2015 and 31
December 2014 are unaudited. The comparative information for the year ended
30 June 2015 is audited.
Bank facilities and interest bearing debt
The Company was in compliance with all bank covenants as at 31 December 2015.
Share buyback programme:
The board has resolved in accordance with section 65 of the Companies Act
1993 and the Company's constitution that, effective from 22 February 2016
until 20th February 2017, the Company will operate a share buyback programme
in accordance with NZAX listing rule 7.6.1(a) under which the Company will
make one or more offers on NZX's order matching market to all shareholders to
acquire up to a maximum of 5% of the total shares on issue in the Company at
the prevailing market price for the shares at the time of purchase. Shares
that are acquired by the Company under the share buyback programme will be
cancelled and the acquisitions 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 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.
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 over the
last 12 months. 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 like to thank my fellow directors, Ian Malcolm and Brendan Wood, who
have been very supportive in the progress of the Company.
Staff
The directors would like to thank the staff for their continued acceptance of
cost controls to match the costs with the revenues being generated by the
Company.
Tony Falkenstein
Chairman and Chief Executive
End CA:00277726 For:JWI Type:HALFYR Time:2016-02-16 16:07:29
