ENECO REFRESH LTD — Annual Report 2014

Aug 28, 2014

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Appendix 4E

Preliminary Final Report period ending 30 June 2014

Results for announcement to the market

Finan cial Results			Jun e 2014	June 2013
Reven ue from ordin ary activities	Down	6 .8%	6,4 14,044	6,884,597
Comp afte rehensive Pro r tax attributa fit / (Loss) fro ble to memb m ordinarya ers ctivities	Up	8 71%	5 80,456	(75,291)

Divid ends	2 F Di 014 inal vidend	2013 Final Dividend
Amou ntper Ordina rySecurity (d eclared but no tyetprovide d at 30 June2 014)	0. 1 cent	Nil
Franke d amountper Security	0. 1 cent	Nil
Recor d date for dete rminingentit lements to fin al dividends	10 Sept2 014
Net T angible Ass et Backing	Jun e 2014	June 2013
Net ta ngible assetb acking per or dinary securit y	$ 0.04	$0.03

Commentary

Every	operating se gment is doi ng better.V ictoria	operating se gment is doi ng better.V ictoria	operating se gment is doi ng better.V ictoria	hasg rown veryw ell in the las t few	hasg rown veryw ell in the las t few	hasg rown veryw ell in the las t few	hasg rown veryw ell in the las t few	years.	To cope
with it s continuing growth,w e moved to a new facto ry in					June	2014. Costs associated			with the
moving resulted in a reduced p rofit for this year.
		Profit/(Los s)($’000)				Revenu e($’000)
		2 014	201 3	%		2014	2 013	%
	Western Au stralia	393	24 4	61		3,485	3, 326	5
	New SouthW ales	87	4 6	89		1,271	1, 375	(8)
	Victoria	88	10 5	(16)		836	744	12
	Queensland 1	84	9 0	(7)		822	1, 439	(43)
	Corporate	(72)	(560 )	87		-	-
	Total Compa ny	580	(75 )	873		6,414	6, 884	(7)

1 Queensland profit for 2 014 is onl y for 6 mont h s from 1 J u ly to 31 De c 2013 and 4 9% of 1 J an to 30 J u n using equ i ty method; w hereas nu m bers for 20 1 3 are for a f ull year fr o m 1 July 2012 to 30 J une 2013.

REFRESH GROUP LIMITED a n d its control l ed entities

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Announcement was previously made to the Australian Securities Exchange (ASX) that Refresh sold a 51% stake in our wholly-owned subsidiary, Refresh Waters Queensland Pty Ltd (RWQ), to Saisan Co Ltd on 2 January 2014 for $750k. This allowed us to repay all borrowings putting Refresh in an enviable position of being totally debt-free. One consequence of the sale is that RWQ is now equity accounted for and from 2 January 2014 its financial are no longer included in our consolidated financial statement. This explains the drastic variances in our financials compared to last financial year. If financials from RWQ are included, we would have achieved a total revenue growth of 5% pa.

Refresh is now poised to progress into our next phase of growth. We started to produce our own PET bottles from 5L to 15L in Perth. Investment in the blowmoulder is one of the reasons for the higher capital expenditure in this financial year. This will soon be replicated in Brisbane. It would enable us to significantly reduce our cost. Having reduced costs would also help us be more competitive in the market and allow us to increase our market share. The savings is not yet realised in this financial year as bottles were only produced in late May 2014. Savings would flow through from next financial year. The Company will continue to upgrade its equipment to achieve higher cost savings and reduced product costs.

Refresh’s turnaround has also attracted a number of new investors both in trading volumes achieved on ASX as well as the placement of 11,466,666 shares to 2 new shareholders. Coupled with the positive cash flow from the business, this has put our Company in a strong financial position with a cash balance of $1.26 million.

REFRESH GROUP LIMITED

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PRELIMINARY FINAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014

Note Revenue 2a Cost of Sales Gross Profit Other income Marketing Expenses Distribution Expenses Administrative Expenses Occupancy Expenses Other Expenses Share of Net Profits of associates Results from operating activities Finance income 2c Finance costs 2d Profit / (Loss) before income tax Income tax expense Net Profit/ (Loss) Attributable to Members of Refresh Group Limited Other comprehensive income Total comprehensive income/(loss) attributable to members of Refresh Group Limited Basic earnings/(loss) per share (cents per share)	Note	CONSOLIDATED 2014 $ 2013 $
		6,414,044 6,884,597 (2,640,908) (2,869,919)
		3,773,136 4,014,678 384,221 19,272 (479,954) (555,778) (1,203,621) (1,301,992) (1,367,645) (1,565,055) (526,713) (606,371) (6,000) (5,500) 16,675 -
		590,099 (746) 12,946 5,577 (22,589) (80,122)
		580,456 (75,291) - -
		580,456 (75,291) - -
		580,456 (75,291)
		0.60 (0.08)

The accompanying notes form part of the Statement of Comprehensive Income

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non-Current Assets Other receivables Property, plant and equipment Intangible assets Investment in Associates Total Non-current assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Financial liabilities Short-term provisions and accruals Total Current Liabilities Non-current Liabilities Financial liabilities Long-term provisions Total Non-current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Notes	CONSOLIDATED 2014 2013 $ $
	3 4 3 5	1,261,630 224,194 538,491 788,914 740,888 969,208
		2,541,009 1,978,316
		474,099 - 1,528,399 1,919,847 318,678 781,815 506,675 -
		2,827,851 2,701,662
		5,368,860 4,679,978
		613,882 680,354 - 291,098 176,795 174,690
		790,677 1,146,142
		- 25,452 24,487 27,075
		24,487 52,527
		815,164 1,198,669
		4,553,696 3,481,309
		9,275,015 8,783,084 191,712 191,712 (4,913,031) (5,493,487)
		4,553,696 3,481,309

The accompanying notes form part of the Statement of Financial Position

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2014

Balance at 1 July 2012 Equity fund raising costs Issue of share capital Loss for the period Balance at 30 June 2013 Balance at 1 July 2013 Equity fund raising costs Issue of share capital Profit for the period Balance at 30 June 2014	Issued Capital Other Reserves Accumulated Losses Total 8,406,595 191,712 (5,418,196) 3,180,111 (3,411) - - (3,411) 379,900 - - 379,900
	8,783,084 191,712 (5,418,196) 3,556,600 - - (75,291) (75,291)
	8,783,084 191,712 (5,493,487) 3,481,309
	8,783,084 191,712 (5,493,487) 3,481,309 (24,070) - - (24,070) 516,001 - - 516,001
	9,275,015 191,712 (5,493,487) 3,973,240 - - 580,456 580,456
	9,275,015 191,712 (4,913,031) 4,553,696

The accompanying notes form part of the Statements of Changes in Equity

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Borrowing costs Interest received Net cash flows provided by operating activities Cash flows from investing activities Proceeds from sale of property, plant and equipment, and investment Proceeds from disposal of controlling interest in subsidiary Purchase of property, plant and equipment Net cash flows provided by /(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Share Issue expenses Repayments of borrowings Net cash flows provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	CONSOLIDATED 2014 2013 $ $
	6,476,355 6,884,597 (6,001,956) (6,684,854) (22,589) (80,122) 12,946 5,577
	464,756 125,198
	- (30,900) 679,357 - (282,057) (260,105)
	397,300 (291,005)
	516,000 379,900 (24,070) (3,411) (316,550) (139,030)
	175,380 237,459
	1,037,436 71,652 224,194 152,542
	1,261,630 224,194

The accompanying notes form part of the Statement of Cash Flows

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

1. SEGMENT INFORMATION

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

In identifying its operating segment, management follows the geographical location of the Group’s operations. Corporate costs are included under “Other”. Segment information can be analysed as follows for the reporting period under review.

30 June 2014 Revenue from external customers Other Income Other Expense Interest Expense Depreciation Expense Segment operating profit/(loss) Total assets Total liabilities 30 June 2013 Revenue from external customers Other Income Other Expenses Interest Expense Depreciation Expense Segment operating profit/(loss) Total assets Total liabilities

WA NSW VIC QLD OTHER (Corporate) TOTAL

3,484,738 1,270,945 835,702 822,659 - 6,414,044 542 - (582) 5,642 378,6191 384,221 - - 6,000 - - 6,000 20,425 - - - 2,164 22,589 154.306 69,230 53,609 53,822 - 330,967 393,412 87,057 88,237 84,298 (72,548) 580,456 3,141,659 817,942 505,458 - 903,801 5,368,860 608,372 3,401 1,282 - 202,109 815,164 3,325,745 1,375,542 743,718 1,439,592 - 6,884,597 (2,133) - 21,405 - - 19,272 - - 5,500 - - 5,500 43,667 2,203 2,008 6,408 25,836 80,122 165,452 52,547 36,310 44,494 - 298,803 243,500 46,359 104,854 89,652 (559,656) (75,291) 1,832,345 881,636 500,269 1,302,042 163,686 4,679,978 836,481 4,194 907 70,834 286,253 1,198,669

1 Includes Gain on disposal of controlling interest in Refresh Waters Queensland Pty Ltd.

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

2. REVENUE AND EXPENSES

a. Revenue Sale of bottled water and accessories b. Employee Benefits Expense Wages and salaries Workers compensation costs Superannuation costs Provisions for annual and long service leave Other employee benefits expense c. Finance Income Interest received d. Finance Costs Bank loans and other borrowings Finance charges payable under finance leases and hire purchase contracts e. Cost of Sales Inventory expensed Inventory write-off f. Depreciation & Amortisation Depreciation expense Amortisation	CONSOLIDATED 2014 2013 $ $
	6,414,044 6,884,597
	6,414,044 6,884,597
	1,921,849 2,248,762 46,678 42,699 204,609 223,923 33,488 32,088 40.610 43,802
	2,247,234 2,591,274
	12,946 5,577
	12,946 5,577
	18,217 74,214 4,372 5,908
	22,589 80,122
	2,556,370 2,821,796 84,538 48,123
	2,640,908 2,869,919
	330,967 293,302 6,000 5,500
	336,967 298,802

REFRESH GROUP LIMITED and its controlled entities

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RELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

3. TRADE AND OTHER RECEIVABLES

Current Trade receivables Provision for impairment of receivables Other receivables Prepayments Non-Current Loan to Associates	CONSOLIDATED 2014 2013 $ $
	436,924 615,720 (3,386) (15,000)
	433,538 600,720 87,723 99,495 17,230 88,699
	538,491 788,914
	474,099 -
	474.009 -

Consolidated 2014 Trade receivables Other receivables 2013 Trade receivables Other receivables	Gross Amount Past due and impaired Past due but not impaired (days overdue) Within initial trade terms 31-60 61-90 >90
	436,924 3,386 172,449 14,725 1,350 245,014 87,723 - - - - 87,723
	524,647 3,386 172,449 14,725 1,350 332,737
	615,720 15,000 215,266 23,401 - 362,053 99,495 - 4,249 - 83,365 11,881
	715,215 15,000 219,515 23,401 83,365 373,934

REFRESH GROUP LIMITED and its controlled entities

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RELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

4. INVENTORIES

Raw materials (at cost) Finished goods (at cost) Total inventories at cost or net realisable value Provision for slow moving inventories	CONSOLIDATED 2014 2013 $ $
	379,036 475,032 410,943 560,210
	789,979 1,035,242 (49,091) (70,034)
	740,888 969,208

5. TRADE AND OTHER PAYABLES

Current Trade payables Other payables	CONSOLIDATED 2014 2013 $ $
	305,245 324,564 308,637 355,790
	613,882 680,354

Trade payables are non-interest bearing and are normally settled on 60-day terms.

REFRESH GROUP LIMITED and its controlled entities

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PRELIMINARY FINAL REPORT NOTES TO AND FORMING PART OF PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

6. SIGNIFICANT EVENTS

On 2 January 2014, Refresh Waters Pty Ltd (RW) sold 51% of its stake in Refresh Waters Queensland Pty Ltd (RWQ) to Saisan Co Ltd for $750,000. RW now owns 49% of RWQ but continues to manage the business. One consequence of the sale is that RWQ is now equity accounted for and from 2 January 2014 are no longer included in our consolidated financial statement.

On 16 June 2014, the Company raised $516,000 through the placement of 11,466,666 new shares to 2 new shareholders at 4.5 cents per share.

7. ACQUISITION

Nil

8. EVENTS AFTER THE BALANCE SHEET DATE

On 29 August 2014, the Company raised $100,000 through the placement of 2,000,000 new shares at 5 cents per share.

9. CONTINGENT ASSETS & LIABILITIES

Our Melbourne landlord holds a Banker’s Guarantee of $19,000 in lieu of rental bond. There is no other contingent liability between 30 June 2014 and the date of this report.

10. BASIS FOR PREPARATION

This preliminary final report has been prepared in accordance with ASX listing rule 4.3A and the disclosure requirements of ASX Appendix 4E. The accounting policies adopted in the preparation of the preliminary final report are consistent with those adopted in the preparation of the annual financial report.

11. UNAUDITED APPENDIX 4E

This report is in the process of being audited.

REFRESH GROUP LIMITED and its controlled entities

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