ENECO REFRESH LTD — Annual Report 2015

Aug 27, 2015

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Appendix 4E

Preliminary Final Report period ending 30 June 2015

Results for announcement to the market

Financial Results			June 2015	June 2014
Revenue from ordinary activities	Up	7.2%	5,994,351	5,591,385
Comprehensive Profit / (Loss) from ordinary activities after tax attributable to members	Down	110%	(59,079)	580,456

Dividends	2015 Final Dividend	2014 Final Dividend
Amount per Ordinary Security (declared but not yet provided at 30 June 2015)	0.1 cent	0.1 cent
Franked amount per Security	0.1 cent	0.1 cent
Record date for determining entitlements to final dividend	8 Sept 2015

Net Tangible Asset Backing	June 2015	June 2014
Net tangible asset backing per ordinary security	$0.04	$0.04

REFRESH GROUP LIMITED and its controlled entities

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COMMENTARY

We’re pleased to report that every operating segment is profitable in this financial year. Unfortunately, after consolidating with corporate expenses, we ended the year with a small loss.

Victoria has grown very well in the last few years. To cope with its continuing growth, we moved our Melbourne factory to bigger facilities in July 2014. Costs associated with the move resulted in a reduced profit for this year.

We have also spent a substantial amount in upgrading our plant and equipment in Perth so that we could reduce product costs and compete more aggressively in the market. We are now able to produce our own PET bottles from 300ml to 15 litres instead of having to buy them. Besides producing them for our own use, we have started to market the empty bottles as well. Unfortunately a lot of costs associated with the upgrade could not be capitalised and have to be expensed. These include the need to rent another warehouse to stock up for the factory shutdown, costs to remove the old filling line and additional costs to put in the new filling line, etc. The additional expenses are necessary to prepare for the long term growth we are expecting.

Previously, it costs us too much to freight 5-litre PET bottles from Sydney to Perth. As a result, we only sell our 5-litre in Woolworths supermarkets in Queensland, New South Wales, Australian Capital Territory and Victoria. We now produce our own 5-litre PET bottles in Perth and it is now available in Woolworths in Western Australia as well.

Our Brisbane factory has also started to blow their own 5-litre to 15-litre bottles. With our multiple location business model, we are able to supply our products nationally without having to freight them from only one factory like what some of our competitors are doing. This translates to a substantial savings in freight. Sale of our new 12-litre non-returnable bottles for coolers and dispensers has been very well received. Besides selling directly to customers, we have also signed up a number of national distributors.

Despite the high capital expenditure for future growth, Refresh still has a healthy bank balance and has no borrowing at all. We could now focus on merger and acquisition opportunities for financial year 2016 so that we could escalate the company’s growth.

REFRESH GROUP LIMITED and its controlled entities

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

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

Revenue 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 Finance costs Profit / (Loss) before income tax Income tax expense Profit/(Loss) for the year from continuing operations Profit/(Loss) for the year from discontinued operations Profit/(Loss) for the year Other comprehensive income Total comprehensive income/(loss) for the period Basic earnings/(loss) per share (cents per share)	Note	CONSOLIDATED 2015 $ 2014 $
	2a 2b 2c 2d	5,994,351 5,591,385 (2,703,596) (2,335,988)
		3,290,755 3,255,397 (38,094) 1,899 (504,676) (438,629) (1,081,420) (1,022,795) (1,295,510) (1,246,471) (475,620) (414,281) (6,000) (6,000) 8,000 16,675
		(102,565) 145,795 43,486 12,946 - (22,589)
		(59,079) 136,152 - -
		(59,079) 136,152 - 444,303
		(59,079) 580,456 - -
		(59,079) 580,456
		-0.05 0.60

The accompanying notes form part of the Statement of Comprehensive Income

REFRESH GROUP LIMITED and its controlled entities

PRELIMINARY FINAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

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 2014 Profit Reserve Accumulated losses TOTAL EQUITY	Notes	CONSOLIDATED 2015 2014 $ $
	3 4 3 5	782,448 1,261,630 577,550 538,491 882,690 740,888
		2,242,688 2,541,009
		246,831 474,099 1,960,709 1,528,399 312,678 318,678 514,675 506,675
		3,034,893 2,827,851
		5,277,581 5,368,860
		388,497 613,882 - - 361,185 176,795
		749,682 790,677
		- - 51,691 24,487
		51,691 24,487
		801,373 815,164
		4,476,208 4,553,696
		9,368,401 9,275,015 191,712 191,712 468,204 580,000 (5,552,110) (5,493,031)
		4,476,208 4,553,696

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 2015

Balance at 1 July 2013 Equity fund raising costs Issue of share capital Profit for the period Transfer to 2014 Profit Reserve Balance at 30 June 2014 Balance at 1 July 2014 Equity fund raising costs Issue of share capital Dividend Payment (Loss) for the period Balance at 30 June 2015	Issued Capital Other Reserves 2014 Profit Reserve Accumulated Losses Total 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 - - - 580,456 580,456 580,000 (580,000) -
	9,275,015 191,712 580,000 (5,493,031) 4,553,696
	9,275,015 191,712 580,000 (5,493,031) 4,553,696 (6,614) - - - (6,614) 100,000 - - - 100,000 - - (111,795) - (111,795)
	9,368,401 191,712 468,204 (5,493,031) 4,535,287 - - - (59,079) (59,079)
	9,368,401 191,712 468,204 (5,552,110) 4,476,208

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 2015

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 Dividends Paid Net cash flows provided by/(used in) financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	CONSOLIDATED 2015 2014 $ $
	6,043,789 6,476,355 (5,790,976) (5,996,256) - (22,589) 43,486 12,946
	296,299 470,456
	16,959 - - 673,657 (774,031) (282,057)
	(757,072) 391,600
	100,000 516,000 (6,614) (24,070) - (316,550) (111,795) -
	(18,409) 175,380
	(479,182) 1,037,436 1,261,630 224,194
	782,448 1,261,630

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 2015

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 2015 Revenue from external customers Other Income Other Expense Interest Expense Depreciation Expense Segment operating profit/(loss) Total assets Total liabilities 30 June 2014 Revenue from external customers Other Income Other Expense Interest Expense Depreciation Expense Segment operating profit/(loss) Total assets Total liabilities

WA NSW VIC OTHER (Corporate) TOTAL

3,886,789 1,255,347 852,216 - 5,994,352 (32,470) 3,898 (9,522) - (38,094) - - 6,000 - 6,000 - - - - - 151,902 61,959 46,234 - 260,095 232,544 81,136 77,215 (449,974) (59,079) 3,380,906 804,249 528,537 563,889 5,277,581 571,232 3,825 1,626 224,690 801,373 3,484,738 1,270,945 835,702 - 5,591,385 542 - (582) 1,939 1,899 - - 6,000 - 6,000 20,425 - - 2,164 22,589 149,249 69,230 56,407 - 274,886 410,087 87,057 88,237 (449,229) 136,152 3,141,659 817,942 505,458 903,801 5,368,860 608,372 3,401 1,282 202,109 815,164

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 2015

2. REVENUE AND EXPENSES

a. Revenue Sale of bottled water, accessories and beverages b. Cost of Sales Inventory expensed Inventory write-off c. Finance Income Interest received d. Finance Costs Bank loans and other borrowings Finance charges payable under finance leases and hire purchase contracts e. Employee Benefits Expense Wages and salaries Workers compensation costs Superannuation costs Provisions for annual and long service leave Other employee benefits expense f. Depreciation & Amortisation Depreciation expense Amortisation	CONSOLIDATED 2015 2014 $ $
	5,994,352 5,591,385
	5,994,352 5,591,385
	2,634,547 2,251,450 69,049 84,538
	2,703,596 2,335,988
	43,486 12,946
	43,486 12,946
	- 18,217 - 4,372
	- 22,589
	1,891,549 1,696,634 42,240 45,223 205,256 186,127 40,694 29,102 30,804 39,157
	2,210,543 1,996,243
	260,095 268,886 6,000 6,000
	266,095 274,886

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 2015

3. TRADE AND OTHER RECEIVABLES

				CONSOLIDATED	CONSOLIDATED
				2015	2014
Current				$	$
Trade receivables				484,735	436,924
Provision for impairment of receivables				(4,079)	(3,386)
				480,656	433,538
Other receivables				67,948	87,723
Prepayments				28,946	17,230
				577,550	538,491
Non-Current
Loan to Associates				246,831	474,099
				246,831	474.099
		Past due			Within
	Gross	and	Past due but not impaired		initial trade
	Amount	impaired	(days overdue)		terms
			31-60	61-90 >90
Consolidated
2015
Trade receivables	484,735	4,079	139,261	12,391 7,901	321,103
Other receivables	67,948	-	-	- -	67,948
	552,683	4,079	139,261	12,391 7,901	389,051
2014
Trade receivables	436,924	3,386	172,449	14,725 1,350	245,014
Other receivables	87,723	-	-	- -	87,723
	524,647	3,386	172,449	14,725 1,350	332,737

4. INVENTORIES

Raw materials (at cost) Finished goods (at cost) Total inventories at cost or net realisable value Provision for slow moving inventories	CONSOLIDATED 2015 2014 $ $
	425,837 379,036 505,944 410,943
	931,781 789,979 (49,091) (49,091)
	882,690 740,888

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 2015

5. TRADE AND OTHER PAYABLES

Current Trade payables Other payables	CONSOLIDATED 2015 2014 $ $
	236,968 305,245 151,529 308,637
	388,497 613,882

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

6. SIGNIFICANT EVENTS

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

7. ACQUISITION

Nil

8. ASSOCIATE

	Place of	Proportion of Ordinary
	Business/	Share Interests /	Measurement
Name of Associate	Incorporation	Participating Share	Method	Carrying	Amount
		2015 2014		2015	2014
		% %		$	$
Refresh Waters	Queensland,	49 49	Equity	514,675	506,675
Queensland Pty Ltd	Australia

9. EVENTS AFTER THE BALANCE SHEET DATE

Nil

10. CONTINGENT ASSETS & LIABILITIES

There is no contingent liability between 30 June 2015 and the date of this report.

11. 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.

12. UNAUDITED APPENDIX 4E

This report is in the process of being audited.

REFRESH GROUP LIMITED and its controlled entities

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