Why Eneco Refresh (ASX:ERG) is growing bottled water sales while oil-linked costs squeeze its plastics arm

Sonal Goyal

12 November 2026 02:05 PM AEDT

Why Eneco Refresh (ASX:ERG) is growing bottled water sales while oil-linked costs squeeze its plastics arm

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Key Highlights

Total Revenue for the September quarter was $4.42 million, up from $4.18 million a year earlier.
Refresh Waters contributed $3.66 million, with Western Australia and Victoria growing most, while plastics revenue fell to $768,000.
The company attributed the plastics decline to customers pausing orders after resin prices rose with oil.
Cash was $4.71 million at 30 September, and the FY26 comprehensive profit after tax was about $446,000.

Eneco Refresh (ASX:ERG) is an operating Business rather than an explorer. Based in Malaga, Western Australia, it supplies bottled water through its Refresh Waters division across five states and territories and makes plastic products through Refresh Plastics. It reports revenue, and posted a small after-tax profit in the year to 30 June 2026.

The story in its latest update is a split between its two divisions. According to its September quarter activities report and Appendix 4C, released on 30 October 2026, water revenue rose about 10% on the same quarter a year earlier, while plastics revenue fell about 11%. The company attributed the plastics decline to customers pausing orders after sharp rises in resin prices linked to higher oil prices.

September quarter trading

Total revenue for the three months to 30 September 2026 was $4.42 million, compared with $4.18 million a year earlier, the company reported. Refresh Waters contributed $3.66 million. Western Australia and Victoria grew the most, helped by sales to major retailers. The small Darwin operation declined after a large customer scaled back, though the company said that branch was immaterial to group revenue.

Refresh Plastics revenue was $768,000, down from $859,000. Management said strategic purchasing had allowed it to hold customer pricing broadly steady despite input cost pressure. It also said oil prices continued to rise during the quarter and into the December quarter, affecting Supply chain and Manufacturing costs across the business.

The board stated that the business had improved both its Top Line and Bottom Line compared with FY26 and expects this to continue through FY27. That is company guidance.

Full-year result

The Appendix 4E released on 31 August 2026 reported FY26 revenue from ordinary activities of $17.73 million, up 6.8%, and comprehensive profit after tax attributable to members of about $446,000, against about $21,000 a year earlier. The commentary describes this as the company's best after-tax profit in five years and cites a figure of $451,000, slightly different from the results table. No final Dividend was declared. Net tangible assets per share were reported at $0.032.

Cash position

The 4C shows cash of $4.71 million at 30 September 2026. Receipts from customers were $4.37 million, and net Operating Cash Flow was a small outflow of $62,000. After plant and equipment purchases of $57,000 and $198,000 of Lease and borrowing repayments, cash fell during the quarter but remained substantial relative to quarterly spending. Because the operating outflow was so small, the 4C's funding estimate of 76 quarters is not a meaningful guide to the business.

The company said in its full-year commentary that its Balance Sheet allows it to look at potential acquisitions; none has been announced.

Sector context and risks

Bottled water is a competitive category where sales to major supermarket chains carry pricing power on the buyer's side. Plastics manufacturing is exposed to resin costs, which follow oil prices.

Company-specific risks include continued oil-linked cost inflation, customer concentration in retail and in the Darwin branch, the weaker plastics segment, thin profit margins relative to revenue, and execution risk in any acquisition. Operating cash flow was slightly negative in the September quarter despite revenue growth.

What to watch

The Annual General Meeting is scheduled for 10.00am (AWST) on Wednesday 25 November 2026 in Malaga. The December quarter 4C, due by the end of January 2027, will show whether plastics orders recover and whether cost pressures ease.

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