Preliminary Half Year Result to 31 Dec 2018

Chair and Chief Executive Report The directors of Just Water International Ltd (to be renamed Just Life Group Ltd effective 1st March 2019) present the financial results for the half year ended 31 December 2018. Key highlights extracted from the Statement of Comprehensive Income Current Previous half-year half-year % $'000 $'000 change Operating Revenue 17,032 8,446 102% EBITDA 3,206 2,348 37% Depreciation & Amortisation (1,089) (1,027) (6%) EBIT 1,700 1,321 29% Interest (261) (29) (800%) Net Profit before tax 1,439 1,292 11% The six-months ended 31 December 2018 represents the first trading period of 100% ownership of Hometech Ltd and consolidation of its financial results. Group revenue has effectively doubled because of the Hometech acquisition. EBITDA has increased by 37% from $2,348,000 to $3,206,000. EBITDA has increased at a lower percentage than the increase in revenue. This is because, whilst Hometech is meeting performance expectations, the operating margins at Hometech are lower than Just Water New Zealand. This was understood and considered at the time of acquisition. The group is also carrying the interest costs associated with the purchase of Hometech. As announced at the 2018 annual meeting there is a customer contract amortisation charge of $800,000 for the year ending 30 June 2019, $400,000 of which is reflected in the half-year result. This charge was as a result of the allocation of a portion of the goodwill paid for Hometech allocated to customer contracts which is fully amortised during the year and will not recur in 2020. EBIT increased by 29% to $1,700,000. Adding back the customer contract amortisation charge of $400,000 noted above EBIT would have increased to $2,100,000 or by 59%. Housing New Zealand have advised Hometech that the contract as the preferred supplier of ventilation services will be extended until 30 June 2020. Included in this contract is the 'Warm and Dry' programme which is scheduled to be completed by 30 June 2019. This programme has historically accounted for approximately 8% of the Group revenue. Hometech is a preferred direct supplier to Housing New Zealand and management believe that the company is well placed to continue to undertake ongoing services to Housing New Zealand through other programmes. Debt and Equity: Net interest-bearing liabilities include cash and cash equivalents and interest-bearing liabilities. The graph below details the net interest-bearing liabilities for the Group over the past four years. [Refer to attachment] Net interest-bearing liabilities increased because of the acquisition of the shares in Hometech Ltd for $8.1m and the acquisition of the business operations of Dolphin Water Products Ltd for $0.4m during the twelve months ended 31 December 2018. Shareholder equity has steadily increased from $11,912,000 to $13,821,000 over the last 4 years. During the past year the debt to equity ratio increased from 27%:73% to 54%:46% due to the two acquisitions noted above. The directors believe the company is appropriately geared relative to the scale of operations across the two business units. [Refer to attachment] Acquisitions and New Opportunities: The directors will continue to pursue new opportunities for growth, both organically, and by acquisition. On 3 January 2019, Hometech acquired the business of Unovent Ltd. The business is a leading innovator in patent pending ductless home ventilation products, which offers installation and pricing advantage over competitor ventilation systems. Bank facilities and interest-bearing debt: The Company was in compliance with all bank covenants as at 31 December 2018. Audit: The financial statements for the six months ended 31 December 2018 and 31 December 2017 are unaudited. The comparative information for the year ended 30 June 2018 is audited. Comparative information has been adjusted for the financial effect of the implementation IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments). Health & Safety: The ongoing health and safety of the Group team members, contracting parties and visitors is vital for the safety and wellbeing of our people and a critical input into the Company's operations. Directors and management continue to ensure we have a strong health and safety culture and ongoing health and safety training. Board: Steve Bootten was appointed to the Board on 1st January 2019, and on 1st March 2019 Richard Carver will join the Board. Both new directors are considered to be independent directors under the NZX Listing Rules. Richard Carver was already a director of Hometech Ltd, and Steve Bootten will join the Hometech Board on 1st March 2019. Shareholders: All shareholders were sent a shareholder newsletter in November 2018. This was sent directly to all shareholders who have advised the Company of their email address. It is also available on our website - www.jwi.co.nz. A further shareholder newsletter will be sent to shareholders in March 2019. The Company is keen to keep shareholders informed of current developments in the Group. The directors will also undertake nationwide meetings with shareholders during the year and will update the market accordingly. Senior Management: The senior management team of the Group comprises Eldon Roberts - Just Water International Ltd Group COO/CFO, Lynne Banks - General Manager Just Water New Zealand and Warren Drinkwater - General Manager Hometech Ltd. NZX: The Company has announced that it will migrate from the NZAX to the NZX Main Board effective 1 March 2019. As a result of the change of name to Just Life Group Limited the ticker code will change from JWI to JLG. The change in name reflects the strategic intent of the Group, evidenced by the recent acquisition of Hometech Ltd and Unovent Ltd. The Company will be seeking ways to create more liquidity in its stock, to ensure that shareholders can buy or sell parcels of shares at will. Management and Team: The directors wish to acknowledge the excellent team culture which has played a major part in achieving the result for the period. Management and team members have shown absolute commitment in every part of the Company, and the directors thank them for their dedication. Hilary Poole Tony Falkenstein Chair Chief Executive E: HilaryP@justlife.co.nz E: TF@jwi.co.nz M: +64 272409517 M: +64 21950856 End CA:00331279 For:JWI Type:HALFYR Time:2019-02-28 15:34:22