Announcement
ANNREP: JLG: Annual Report & Announcement of Final Dividend
08:30am
JLG
27/08/2020 08:30
ANNREP
PRICE SENSITIVE
REL: 0830 HRS Just Life Group Limited
ANNREP: JLG: Annual Report & Announcement of Final Dividend
2020 Chair and Chief Executive Officer's Review
2020 has been an extraordinary year - in the first half the group delivered a
solid operating performance, resulting in an after-tax earnings growth of
42%. Then the world was hit by COVID-19. During the COVID-19 Level 4
lockdown, revenue reduced by 43%, however the group was able to produce an
after-tax profit increase of 53% for the full year.
Income Highlights:
Key highlights extracted from the Consolidated Statement of Comprehensive
Income
[Refer to attachment]
Operating revenue was down by 10% as a result of a review of the total
business. The review revealed trading areas of the business that were barely
profitable, or unprofitable. Together with operating efficiencies, this
resulted in the net profit before tax being up 56% over the 2019 result.
During the current year operating costs were minimised during the period of
COVID-19 lockdown and there has been a tight rein on costs post COVID-19 as
we are well aware of the current volatile situation of the New Zealand
economy. The earnings per share for the year was 3.3 cents (2019 - 2.2
cents).
Balance Sheet Highlights:
Shareholder equity has steadily increased from $11.2 million to $17.7 million
over the last five years. The debt to equity ratio as at 30 June 2020 was
46:54, which the directors believe is appropriately geared.
As I have stated before, "profit is a matter of opinion; cash is a matter of
fact" - it is pleasing to note that free cash flow* for the year was $4.5
million, compared with $2.8 million in 2019.
*Free cash flow is a non-GAAP measure. It is defined as net cash flow
generated from operating activities less net capital expenditure. Management
uses this measure as a key performance indicator.
Building a Stronger Business:
Just Water and Hometech have formally amalgamated under the Just Life Group
entity. Lynne Jacobs, previously General Manager of Just Water, was appointed
General Manager of the Group, with Eldon Roberts remaining as Chief Operating
Officer. Lynne is responsible for the group revenue, and Eldon responsible
for finance, operations and IT. The merger resulted in a restructure of the
business, which has meant a more focused and efficient organisation.
The leadership team is taken up the challenge of operating a highly efficient
and growth focussed business model. The talents within the business combined
with new personnel recruited has given the Company a new lease of life.
The word on the lips of every team member is "ownership", within the values
of the group - Fun, Integrity, Respect, Service, Trust (FIRST).
Marketing is Business:
Peter Drucker, seen as the marketing guru of the century said "the two most
important functions of a business are Innovation and Marketing" as they are
the only two functions that contribute to profit while all others are costs.
With this in mind, the four brands, being Just Water, Unovent, Solatube and
Hometech were placed under the control of one person, the General Manager.
One of our 3 year objectives is to grow new and existing selected brands, and
this structure sets the platform to achieve that objective.
Keep the Objectives simple
o Recruit and retain top talent only
o Our strategy is owned by the whole business
o Buy recognised brands with #1 potential
o Invest in our brands and people
By adhering to these objectives management believe they can "bring the values
alive through our people and brands and deliver value to our customers".
The future depends on what we do today
There is a lot going for Just Life Group - we market four significant brands,
our balance sheet is strong and our people are outstanding. Under the
leadership of Lynne and Eldon, our marketing programmes are innovative, and
operational efficiency is our mantra.
There is no doubt that COVID-19 will affect us, but it does provide an
opportunity to invest at a time when others might cut back.
Mergers and Acquisitions
The Group is in a position to take up acquisition and merger opportunities
and intends to raise capital over the next 12 to 24 months to support these
activities. Any acquisitions would be planned to be cash flow positive and
support an ongoing dividend stream to the shareholders.
A dividend is the result of good management
The directors are pleased to recommend that a fully imputed final dividend of
1.2 cents per share be declared for the current year. This brings the total
dividend for the year to 2.2 cents per share (2019: 2.2 cents per share). The
record date for the dividend will be the 11 September 2020 and the payment
date will be the 18 September 2020.
The Harvard Group, being the major shareholder in Just Life Group, will be
taking up shares in lieu of dividend under the Dividend Reinvestment Plan.
A proactive and supportive Board:
This small Board has been an effective support team for the Chief Executive
and Leadership group.
Last year, JJ Luo was appointed as a director of the company. JJ was one of
the youngest directors appointed to a public company board. The board's
objective is to introduce young talent to directorships to encourage a wider
understanding of the opportunities offered in the governance of public
companies. We intend to appoint another young person under the Institute of
Directors Future Directors programme.
On 5 August 2020, Phil Norman was added to the team to draw on his vast
experience as a professional director and business advisor. He is currently
Chair of ASX-listed Straker Translations Limited and NZX-listed Plexure Group
Limited, as well as being a director of several private companies.
In accordance with the NZX Listing Rules, Phil Norman will hold office until
the next annual meeting scheduled for the 20 November 2020, where he will
become eligible for election.
Focus on the good:
How good is it to have our shareholders, our directors, our senior
management, our staff, our customers, suppliers and bankers, all on the same
team - we thank you. If we are all dedicated to success, we will make sure it
happens.
An on-line investor update will be held on Friday 28th August 2020 at 11:00
am using the following link: https://us02web.zoom.us/j/86592695930
Tony Falkenstein
Chair and Chief Executive Officer
E: TonyF@justlife.co.nz
M: +64 21 950 856
Just Life Group is an entrepreneurial company with a suite of brands to
enhance the lives of all New Zealanders. Our focus is on healthy lives
through the 'Just Water' brand and healthy homes through the 'Unovent',
'Solatube' and 'Hometech' brands.
End CA:00358743 For:JLG Type:ANNREP Time:2020-08-27 08:30:55
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