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Watlington Waterworks Issues Director's Report
The year 2002 was the first year in the Company's 70 year history that net annual income exceeded one million dollars. This was accomplished as a result of consistent strong demand for our goods and services through the year, combined with the benefits of our operating cost containment strategy that has included accelerated long term debt repayment and Goodwill amortization.
The Company has continued with long term plans to strengthen infrastructure in order to either constrain future operating costs or increase sales opportunities. Some of the Company's distribution and storage network is now 70 years old. It is prudent that the Company recognizes a need to reserve capital for a medium term plan to strengthen or replace the aging infrastructure in the next five to ten years. In particular the Company's reservoirs in Devonshire will need to be replaced with substantially larger reservoirs. Seawater desalting is the only way forward for the Company to increase potable water supplies. To this end the Company continues to invest in sea water desalination resources and equipment as part of the ongoing strategy to improve manufacturing capacity.
The Board has routinely reviewed the Goodwill valuation being carried from the original purchase of Pure Water (Bermuda) Limited in 1996. In view of the continuing threat of further competition in the bottled water industry the Directors have decided to complete the write down of the Goodwill remaining at the end of the 2001 financial year. This has been charged against the year 2002 earnings.
We prefer to reserve judgement on our projections for this year. There are numerous uncertainties beyond our control that could adversely affect our projections, in particular possible knock on effects from international events that may adversely affect our tourism. Conservative estimates for this year indicate that it is reasonable to expect income to grow by approximately five percent.
Allan Rance
President & CEO
Additionally, the Company achieved the following results for the financial year ended 31 December 2002: Revenue was $7,471,475 in 2002 up from $7,205,026 in 2001; Net earnings were $1,011,718 in 2002 compared to $540,600 in 2001; Net earnings per share were $0.89 in 2002 versus $0.47 in 2001; Shareholders equity increased to $8.24 in 2002 from $7.47 in 2001.