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DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
("DAWN" or "the Group")
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
JUST-IN-TIME DISTRIBUTION THROUGHOUT SOUTHERN AFRICA
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2001
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Turnover 417 497 391 383 808 590
- Continuing operations 402 556 355 786 710 697
- Discontinued operations 14 941 35 597 97 893
Operating profit 14 776 28 807 51 025
- Continuing operations 15 955 26 815 47 801
- Discontinued operations (1 179) 1 992 3 224
Net finance costs ( 3 015) (2 089) (3 332)
Profit before
exceptional items 11 761 26 718 47 693
Exceptional items 4 075 (13 498) (17 452)
Profit before taxation 15 836 13 220 30 241
Taxation (3 498) (3 098) (9 987)
Earnings for the period 12 338 10 122 20 254
Included above
Depreciation 4 211 2 815 6 859
Operating lease charges 3 022 5 133 8 364
Exceptional items
- Profit/loss on sale
of business (4 175) 5 210 5 910
- Rationalisation
expenditure - 4 534 7 688
- Provision for onerous
obligations in respect
of delay of computer
system implementation - 3 654 3 654
- Amortisation of goodwill 100 100 200
(4 075) 13 498 17 452
Tax relief - (526) ( 3 402)
(4 075) 12 972 14 050
Headline earnings 8 263 23 094 34 304
(after adjustment for
exceptional items)
Statistics
Number of shares ('000)
- in issue 298 627 294 945 298 627
- weighted average 290 302 288 805 291 318
Headline earnings per
share (cents) 2,85 8,00 11,78
Headline earnings per
share from continuing
operations (cents) 3,25 7,31 10,67
Attributable earnings
per share (cents) 4,25 3,50 6,95
Operating profit (%) 3,54 7,36 6,31
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Cash flow from
operating activities 11 319 (15 711) 14 368
Cash flow from
investing activities 8 525 1 181 (26 090)
Cash flow from
financing activities 1 469 5 004 (1 464)
Increase/(decrease) in
cash resources 21 313 (9 526) (13 186)
Cash resources at
beginning of period (9 922) 3 264 3 264
Cash resources at
end of period 11 391 (6 262) (9 922)
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant
and equipment 27 350 19 605 26 986
Intangible assets 700 900 800
Investments - 524 524
Current assets 236 550 230 117 248 946
Inventory 88 619 101 704 91 246
Receivables and
prepayments 136 540 128 413 157 700
Cash and cash equivalents 11 391 - -
Total assets 264 600 251 146 277 256
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders'
equity 116 834 92 853 108 382
Non-current liabilities 25 012 16 891 22 852
Interest-bearing
liabilities 12 150 7 853 9 990
Convertible debentures 4 482 4 482 4 482
Deferred tax liabilities 8 380 4 556 8 380
Current liabilities 122 754 141 402 146 022
Trade and other payables 116 672 130 113 129 328
Current portion of
borrowings 6 082 5 027 6 772
Cash and cash equivalents - 6 262 9 922
Total equity and
liabilities 264 600 251 146 277 256
Future commitments
Finance leases 17 533 12 122 16 082
Operating leases 45 598 49 871 63 258
63 131 61 993 79 340
Value per share
Asset value per share
- Net asset value (cents) 40,63 31,48 36,29
- Market price (cents) 45 58 45
Financial gearing ratio (%) 9,69 25,44 28,76
Current asset ratio (times) 1,93 1,63 1,92
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Dec 31 Dec 30 June
2001 2000 2001
R'000 R'000 R'000
Opening balance 108 382 87 840 87 840
Attributable earnings 2 338 10 122 20 254
Shares repurchased (3 885) - -
Repayment of share premium - (10 323) (10 323)
Net shares issued/(redeemed) - 5 214 10 611
Balance at the end
of the period 116 834 92 853 108 382
COMMENTARY
NATURE OF BUSINESS
Distribution and Warehousing Network Limited is a specialist distribution
and trading group offering a value added service to the retail sector of the
building industry.
FINANCIAL REVIEW
The results for the period under review were severely affected by the
difficult trading conditions experienced during the first quarter. During
this period, the final implementation of the new management information
system disrupted trading activities. In addition, trading margins were also
adversely affected as a result of initiating a new improved centralised
discount system on the new MIS. However, the benefits envisaged from the
system are now becoming evident.
An improved second quarter performance resulted in turnover increasing by
13% to R402,5 million for the period, and this trend is continuing into the
third quarter.
The Group repurchased 11,1 million shares during the period at a cost of
R3,885 million.
Cash flow improved significantly due to the sale of Sheerline, as well as a
result of improved working capital management following the utilisation of
improved inventory optimisation technology. The result is evident in a
strong balance sheet as well as gearing levels that were reduced below 10%.
The interim results have been prepared in accordance with South African
statements of Generally Accepted Accounting Practice. The accounting
policies used are consistent with those used in the comparative period and
the annual financial statements for the year ended 30 June 2001.
PROSPECTS
Even though the economy remains sluggish, the Group will benefit from the
devaluation of the local currency, as it is a well-established wholesale
stockist of locally manufactured products. Demand for the Group's products
and services will therefore continue to remain strong with further expansion
opportunities being explored.
DIVIDEND
The Board of DAWN continues to pursue opportunities of a share repurchase at
appropriate price levels and it has therefore been decided not to pay
dividends until the repurchasing of shares has been completed.
BOARD OF DIRECTORS
It is with great sadness that the Board learnt of the passing of Mr Mike
Woods in December 2001 and on behalf of the staff and management of DAWN
extends its sincere condolences to the family for their loss.
Mr Lou Alberts was appointed as non-executive Chairman of the Board on 22
November 2001.
On behalf of the board
LM ALBERTS DA TOD
Chairman Chief executive officer
Johannesburg
7 March 2002
REGISTERED OFFICE
2 Keerom Road, Heriotdale Ext 10, Cleveland, Johannesburg 2000
DIRECTORS
LM Alberts* (Chairman), DA Tod (Chief executive officer), RL Hiemstra*,
JABeukes *Non-executive
E-mail: info@dawnltd.co.za
Web site: www.dawnltd.co.za
Alpha code: DAW
ISIN number: ZAE 0000 18834
