Annual Results and Dividend Announcement

Chair and Chief Executive Officer's Review We would like to take this opportunity to thank all shareholders for your continued support of our company during the last 12 months. The directors present the audited financial results of the Just Life Group Ltd for the year ended 30 June 2019. This has been a challenging year of consolidation following the acquisition of Hometech which was a major step forward towards our diversification and growth strategy. The financial result represents the first full year of trading with 100% ownership of Hometech Ltd and consolidation of its trading results. The previous year included equity earnings of the 51% of Hometech acquired on 3 January 2018 through to 29 June 2018 when the balance of 49% was acquired resulting in 100% ownership going forward. Company debt levels have increased as a result of the Hometech and Unovent acquisitions. The directors are comfortable with the current debt : equity ratio and also intend to make further reduction in debt during the coming year. All bank covenants have been met during the year and are forecast to be met during the next year. The Company changed its name from Just Water International Ltd to Just Life Group Ltd on the 1st March 2019 to reflect the change in its operations following the Hometech acquisition, and to coincide with the migration of the Company listing from the NZAX to the NZX Main Board. Steve Bootten was appointed to the board on 1st January 2019 and was appointed as chair of the board on 2nd May 2019, following the resignation of Hilary Poole. On the 1st March 2019 Richard Carver was appointed to the board, having previously served on the board of Hometech Ltd. Both new directors were considered to be independent directors under the NZX Listing Rules. Steve resigned effective 22nd August 2019 due to personal circumstances. Steve has been a high contributor to the board and all the directors wish to thank him for his tireless hard work and wish him all the best for the future. The board intends to appoint another independent director to take the position of chair and are planning to have that appointment in place in time for the Annual Meeting scheduled for the 6th December 2019. The directors have also taken this opportunity to review the composition of the board. The IOD Future Directors' programme is about developing the next generation of directors, and with this programme in mind, the directors have much pleasure in announcing the appointment of Jing Jing Luo as a new independent director on the board of Just Life Group. Jing Jing has a conjoint BCom/LLB degree from the University of Auckland, with 6 years' post graduate work experience. Jing Jing's CV is detailed on our website (www.justlifegroup.co.nz). In accordance with the NZX Listing Rules Richard Carver will stand for election at the annual meeting scheduled for 6th December 2019. Tony Falkenstein and Ian Malcolm both retire by rotation and each will also stand for re-election to the board. We have achieved several milestones during a busy year, some of which are not reflected in the annual result: Just Water New Zealand o We appointed Lynne Banks as General Manager of Just Water New Zealand to enable the CEO to focus on growth opportunities for the Group. Lynne brings a new perspective to Just Water, after a career in fast moving consumer goods. She has already instituted initiatives which will bring excellent cost savings in the 2020 year. o We maintained our leadership in the water cooler industry. Our research tells us we are clearly the number one operator in the market and continue to earn the ongoing trust from a majority of the Top 100 New Zealand Companies for their bottled water and water cooler solutions, plus of course a massive number of SME businesses that trust having Just Water in their business workplaces. o Our ownership of the Auckland property where the Just Water head office and bottling plant are located. This year we recognised an unrealised gain on the value of the land and buildings of Just Water New Zealand's Head Office in Penrose, Auckland of $0.8 million within other comprehensive income. This was after receiving an independent registered valuation in June 2019. The directors have taken 95% of the registered valuation undertaken in June 2019, giving a valuation of this property in the balance sheet of $5.13 million. The total gain since acquisition of the property in September 2015 is $1.1 million. Hometech Ltd o We increased our ownership of Hometech Ltd to 100% in June 2018. Hometech continues our mission of "enhancing lives", and we believe has excellent growth prospects. o Hometech has held the distribution rights for the premium Solatube natural daylighting product for 27 years. Quite simply this is the leading product in the market, manufactured in California, USA with an ongoing research and product development pipeline second to none. o Hometech installs the Solatube product range via a dedicated team of 16 Licensees across New Zealand. Customers cannot believe the difference it makes to internal areas such as kitchens, bathrooms and hallways. o There is unlikely to be any town in New Zealand that doesn't have a "Hometech Home" in them. Our marketing team believes that 1 in 10 homes in New Zealand is a Hometech Home with either a Solatube or one of our ventilation products installed in them. Lots of potential in the market yet! o We moved Hometech's head office and main warehouse from Wellington to Auckland in August 2019. The majority of business is in the Auckland region, so this is a short term cost we have recognised in full in 2019 with expected savings in freight and travel going forward. o We also moved the Hometech Auckland office to one central office, to become neighbours with Just Water New Zealand. Like Just Water, all employees are on one floor, which offers a more conducive environment to work in. o We acquired the business of Unovent in January 2019 and have integrated it into the Hometech umbrella o The Unovent patented ductless ventilation product was invented in New Zealand with a focus on reducing "weeping windows" which is common in many New Zealand homes and does away with expensive ducting, and high running costs. It is less expensive than competing brands, and a householder can do just one room at a time if they wish. o We are in the middle of an extensive Unovent advertising campaign across TV, radio and social media - we are sure you will have seen it! If not - please visit www.unovent.com. Free cash flow for the year was $2.8 million. The directors are pleased to recommend that a fully-imputed dividend of 2.2 cents per share be declared for the current year. The record date for the dividend will be 22nd November 2019 and the payment date will be the 6th December 2019. The company operates a dividend reinvestment plan. The Harvard Group, being the major shareholder in Just Life Group, has committed to partaking in this plan. Looking to 2020 we are now positioned to benefit from the stable earnings and cash flow generated by our water business while we focus on the growth opportunities presented by the Hometech and Unovent acquisitions - we look forward to the challenges and opportunities that lie ahead. Key highlights extracted from the Statement of Comprehensive Income: [Refer to the attachment for table] Group revenue has increased by 91% as a result of the Hometech acquisition. EBITDA has increased by 26%. The percentage increase in the EBITDA margin is less than the percentage increase in revenue, is because the operating margins of Hometech are lower than Just Water New Zealand. Net profit after tax shows a decrease of 8% over the previous year, principally because of the increased interest cost associated with the Hometech acquisition, restructuring costs and the $0.25 million accrual cost for the relocation of the Head Office from Wellington to Auckland. In addition, the 2019 amortisation of intangible assets expense includes a non-recurring customer contract amortisation charge of $0.8 million for the year incurred through the Hometech acquisition in June 2018. This was a non-cash expense. It is pleasing to note that 93% of the Just Water New Zealand revenue for the year was derived from existing customers - a real vote of confidence in our successful partnership with our customers. The ongoing loyalty of the Just Water base continues to be an ongoing strategic advantage in respect of future earnings for the Group and management will continue to ensure that focus on exceeding our customers' expectations remains a fundamental part of the culture of the Company. [Refer to the attachment for graph] As a result of the acquisition of the remaining 49% of the shares in Hometech in June 2018 the revenue is now consolidated into the Group results. This has resulted in revenue increasing by 91% during 2019. Just Water New Zealand revenue continues to be consistent reflecting the more medium-term nature of revenue growth with a contracted customer base. [Refer to the attachment for graph] EBITDA continues to show a steady increase over the past 5 years, with the jump in 2019 being attributed to the acquisition of Hometech Ltd. EBITDA is a key measurement metric for management. Debt Net interest-bearing liabilities include cash and cash equivalents. The graph below details the net interest-bearing liabilities for the Group over the past 5 years. Interest bearing debt increased during 2018 as a result of the acquisition of Hometech and Dolphin Water Products. [Refer to the attachment for graph] Interest-bearing liabilities decreased by $0.7 million during the year despite the $0.2 million paid as part of the acquisition price for Unovent. [Refer to the attachment for graph] The debt to equity ratio was 50.9% : 49.1% as at 30 June 2019. The directors believe that the Group is appropriately geared relative to its scale of operations and is continuing a programme of debt repayment. Shareholder returns [Refer to the attachment for graph] Earnings per share decreased from 2.4 cents per share to 2.2 cents per share. [Refer to the attachment for graph] Shareholder equity has steadily increased from $11.2 million to $15.8 million over the last 5 years. This is a pleasing trend as during the past two years a dividend of 2.0 cents per share (2018) and 2.2. cents per share (2019) was paid to the shareholders. Management and Team It is important to take this opportunity to acknowledge the commitment and loyalty of all our team members without whom we simply could not operate to the high standards for which we strive. The Company is all about "enhancing lives", and the team works every day to achieve that vision. Tony Falkenstein Chair and Chief Executive Officer End CA:00339994 For:JLG Type:ANNREP Time:2019-08-29 08:31:38