JWI
23/10/2014 12:58
MEETING
REL: 1258 HRS Just Water International Limited
MEETING: JWI: Annual Meeting - Chairman's and CEO Addresses
Following are the Chairman's and CEO's addresses from the Annual Meeting of
Just Water International Ltd held 11.00am Thursday 23rd October 2014:
Chairman's Address:
Good Morning. I am Paul Connell, Chairman of the Board and I'd like to
welcome you to this, the eleventh Annual Meeting of Just Water International
Limited.
It's now my pleasure to declare open this 11th Annual Meeting of Just Water
International 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? I confirm that the company has received apologies
from Simone Iles. There are no other apologies.
Let me introduce my colleagues at the table, from left to right -
- Brian Rosenberg, an independent non-executive director and Chairman of the
Audit Committee.
- Tony Falkenstein, the Company's Founder;
- Ian Ormiston, the Chief Executive Officer
- And Eldon Roberts, our Chief Financial Officer.
We also have staff here, welcome.
The first item of business today will be the receipt of the company's Annual
Report, followed by a few remarks from me.
After that, our CEO, Ian Ormiston, will make some comments, and there will be
a full opportunity for your questions and comments.
We will then proceed with the other two resolutions, which were notified in
the formal Notice of Meeting being the reappointment of Simone as director
and empowering the reappointment of PWC as auditors.
I will then formally close the meeting and invite you to join the directors
and other Just Water personnel on an informal basis over refreshments.
I am sure that an issue on the minds of most shareholders will be the recent
announcement by Tony of a proposal to make a takeover offer. To date formal
notice of the proposed takeover offer has not been received by the company,
however I understand that this is due early next week. The formal offer to
shareholders will follow two weeks later.
In announcing the proposal we released Mr Falkenstein's letter which had
quite a lot of detail and background for shareholders. It explains that
following receipt of a non-binding offer the board engaged merger and
acquisition experts to determine whether other parties were interested and to
run a formal due diligence process. Three initial non-binding offers were
received and I understand that Mr Falkenstein would have accepted the best
offer. The outcome of the extensive and prolonged process was a final
non-binding offer at 14.3 CPS, slightly below the initial figure. The party
concerned was unable to continue at that time. Mr Falkenstein then decided
to make an offer himself and provided the advice which you have all hopefully
seen.
Your board has formed a committee of independent directors comprising of
Simone, Brian and me to consider the offer when received. It will be our job
to review the offer and make a recommendation to shareholders. We have
retained Korda Mentha and Chapman Tripp to assist us. Korda Mentha will
provide an independent valuation and expert report. Chapman Tripp are
experts in takeover law. These firms have extensive experience and good
reputations in the area of takeovers and I am confident we will be well
advised.
Until such time as this process has taken its course, your board will not
comment on the proposed takeover offer. Specifically we do not want to
pre-judge the independent assessment that we will make following receipt of
reports from our advisors. Accordingly we will not discuss the offer today.
As I said we do not want to pre-judge our independent assessment.
I record that proxies have been received and are held by myself and other
named persons totalling 56,923,675 shares representing 63.62% of the shares
on issue.
The Minutes of the previous Annual Meeting of Just Water International
Limited, held on Thursday 24 October 2013, 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 2014, including the auditors' report be received.
I will shortly deal formally with that Resolution and the others that have
been notified.
However, it's 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.
Overall, this year's results are an improvement on last year - generally the
business performance has continued to make improvements and efficiencies in
terms of people, processes and profitability. Ian will comment further on
the result. We have not paid a dividend. With shrinking turnover we have
used surplus cash to reduce debt.
I want to thank my fellow directors, each of whom has made an excellent
contribution to Just Water's governance. Each of them brings real, valuable
and complementary skills to the business.
Simone Iles retires today by rotation and is seeking re-election.
As I have previously observed, ours is still a small board, and deliberately
so; and I am grateful to each member for their respective contributions.
Your board had spent considerable time and effort ensuring that the company's
governance structures meet the highest standards, and in these challenging
times we continue to seek a mix of stability and strength partnered with new
thinking.
I am also pleased that our auditors have given us a clean bill of health and
also that we have complied with all bank covenants.
We do take our governance responsibilities very seriously; and the process of
continuous governance improvement will continue.
Finally, I want to thank the entire Just Water team across both Australia and
New Zealand, for their efforts over the year.
Prior to going to the formal business, I'd like to invite our CEO, Ian
Ormiston, to address the meeting.
CEO's Address:
Thank you Paul.
Overall, the Group produced a solid result for the financial year ending 30
June 2014. Earnings before interest and tax were slightly ahead of the
previous year at $3.37 million despite a decrease in operating revenue from
$27.89m to $26.74m, the impact of a strong New Zealand dollar on the earnings
of our Australian subsidiary, Clearwater Filter Systems, and a one-off loss
from the sale of Just Plants. We also achieved a realised exchange gain of
$266k by moving debt to Australia and repatriating it at a better rate. In
addition the Group continued to deliver strong operating cash flow of $3.57
million over the year. This enabled the Group to continue its debt reduction
focus, resulting in a further $2.89 million of debt being repaid over the
year.
After a review earlier in the year management concluded that the Just Plants
business did not fit with the Group's future strategic direction and
recommended the same to the Directors'. As a result, the Just Plants
business was sold for $823,000 on 30 June which resulted in a one-off loss on
disposal to the Group of $161,000. The net cash contribution to the group
after accounting for the acquisition, trading activity and subsequent sale of
Just Plants was $670,000 over the 3 year period of ownership.
Management's focus continued to be on the core business with a major emphasis
on improving the underlying systems and processes in the business and making
an investment in people. A restructure of the Group's management team was
completed and a new role of New Zealand National Sales Manager role was
created. The new structure has resulted in a more customer focused and sales
oriented structure across the Group.
A number of different revenue generation opportunities were also investigated
by management over the last financial year. Investigation and analysis of
these is still at an early stage but there are some interesting possibilities
that will be worthy of further work by management over the coming months.
These include opportunities in new markets with new products.
In addition, over the past few months, we have reviewed and tested a number
of new cooler products with a particular focus on sparkling water dispensers.
We expect to launch one or more of these in January. These will broaden our
product offering within our existing business and meet an existing demand in
the marketplace.
Our first quarter results are on target. However as this is traditionally the
quieter time of the year and in accordance with past practice we're not in a
position to offer any guidance on our full year result for this year.
Notwithstanding the above, the fundamental market issues remain with very
competitive market places in both New Zealand and Australia and continued
price discounting from competitors, particularly in New Zealand. Our efforts
continue to centre on improving our product and service offering as a point
of difference from our competition and we believe we are starting to make
progress with this.
Overall, the past financial year has been extremely busy for management as it
responded to potential interest in the shares and assets of the Company from
domestic and international parties, some of which involved detailed and time
consuming due diligence work. Notwithstanding the distraction of this and
management's involvement in this process, we have been able to deliver a
solid result across the Group for the past financial year.
I will now hand back to the Chairman.
Chairman
Are there any questions on my or Ian's 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 to receive the Annual Report, (which
includes the Auditors' Report), for the year ended 30 June 2014.
Would a shareholder like to move the resolution?
Thank you.
Is there any discussion on the resolution? There was no discussion.
I now put the resolution.
All those in favour please raise your hand.
Those against?
I declare the motion carried.
Resolution 2
Resolution 2 relates to Auditors' Remuneration
The Resolution is: "That the company's board of directors be authorised to
fix the auditors' remuneration".
Would a shareholder like to move the resolution?
Thank you.
I now put 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 relates to the election of a director. Simone Iles retires by
rotation and has made herself available for re-election.
The Board is recommending that she be re-appointed to the board.
The Resolution is: That Simone Iles be re-elected as a director of the
Company.
Would a shareholder like to move the resolution?
Thank you.
Is there any discussion, comment or query on the resolution? There was no
discussion.
I now put the resolution:
All those in favour, please raise their hands.
All those against, please raise their hands.
I declare the resolution carried and that Simone Iles is re-elected to the
board.
Is there any General Business or are there any further questions - including
any queries or comments on Ian's or my remarks?
A question from the floor requested an update on the current level of debt
for the Group. The CFO advised that it was approximately $12,600,000 at the
current time. There were no other questions.
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 refreshments at
the back of the room.
End CA:00256755 For:JWI Type:MEETING Time:2014-10-23 12:58:01
