Just Water floats on NZAX market in spectacular style

12.00pm

Just Water International Ltd (JWI) made a spectacular listing on the stock exchange's alternative market today with investors able to stag (immediately sell) the shares at a 32 per cent premium to the issue price.

The shares, issued at 50 cents, opened at 66 cents and almost immediately moved even higher -- to 68 cents, a 36 per cent premium.

An initial public offering (IPO) of 25 per cent of the company raised $8.25 million, the first IPO on the NZAX market.

At 66 cents, the listing capitalises JWI at $43.6 million, making it by far the biggest company on the NZAX.

Most of the company is owned by Red Eagle Corp, the family company of chief executive Tony Falkenstein.

Last week he made a million dollar donations in the form of JWI shares to his old college, Onehunga High School, to Auckland University Business School and to United School of Management, to help improve business education in New Zealand.

The 57-year-old company founder and philanthropist in 2002 made a substantial donation to found the Onehunga High Business School -- the first of its kind in the country. It now has over 250 students.

The shares have a forecast dividend of 8.4 per cent, which will net the schools a return of $84,000 a year.

JWI has around 80 per cent of the office water cooler market in New Zealand, with 35,000 water coolers in place.

The capital raising will be used to pay for Aqua Cool, New Zealand's largest water delivery company which Just Water bought in April for $6 million, and other development.

JWI is the holding company for Just Water New Zealand, Cool Water, Corporate Water Brands and Aqua Cool.

Mr Falkenstein said JWI was looking at other opportunities to expand. It was testing the water, so to speak, in Melbourne, where 90 per cent of the office water market was bottled water.

JWI forecasts a June 2004 profit before interest and tax (ebit) of $3.4 million, including one quarter's earnings from Aqua Cool and six months for Cool Water, bought at the end of last year. In 2002/3, Just Water had ebit earnings of $2.8 million.

Mr Falkenstein said the company's business model had shown over its 15-year history it could perform strongly throughout different economic cycles.

NZX markets development manager, Geoff Brown, said Just Water's capital raising and listing represented an important milestone for the NZAX Market.

Mr Brown said it was an example of the NZAX's objective to make it easier and cheaper for small to medium-sized companies to list and raise money from the public.

"We're already seeing benefits from the higher profile going public can bring," he said, adding that the company had a good spread of shareholders including its own customers.

He said there were over 1000 new shareholders, with lots from the South Island and regions.

Mr Falkenstein said JWI preferred listing on the NZAX "to be a bigger fish in a smaller" pond but had done everything to comply with a main board listing and could move up whenever it liked.

The water industry in New Zealand is divided into three categories: point-of-use, bottled water delivery and branded bottled water and the acquisition of Aqua Cool meant JWI covered all aspects of the water market.

Mr Falkenstein said bottled drinking water has been an international growth phenomenon and was the fastest-growing category in the drinks industry in the United States.

There was plenty of room for growth in New Zealand, where the average water consumption per capita is still only one-fifth of the average in Australia, he said.

- NZPA