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Sharenet Sites
Trading statement
Distribution and Warehousing Network Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
Share code: DAW & ISIN code: ZAE000018834
(“DAWN” or “the Group”)
Trading Statement
As outlined to the market in October 2014, the Group expected the six month results to 31
December 2014 to be down on the high base of the first half of F2014. This proved to be the
case, with the period under review very challenging.
The Group’s key results can be summarised as follows:
Guidance 6 months to 6 months to 6 months to Reference
December December December 2014
2013 Actual 2014 Expected range
results Expected
change
percentage
Revenue R2 227m +5% to +10% R2 338m to A
R2 450m
Core operating R93.4m -55% to -50% R42m to R47m B
profit
HEPS 41.1 cps -170% to - -27cps to -29cps C
165%
EPS 41.4 cps +487% to 231cps to 233cps D
+492%
A. Group revenue increased and gross margins were maintained.
B. Operating profit excluding the impact of items listed in C and D below (“Core
operating profit”) was heavily affected by the impact ofsignificant delays in the
execution of government contracts on the Group’s Infrastructure segment and a
stable but soft Building segment market which includes R6,1 million (-1,9 cps) new
business development cost. The Solutions segment performance was affected by
once-off R6 million (-1,8 cps) additional cost for its warehouse conversion
programme.
C. HEPS was further impacted by once-off transaction costs relating to the Grohe and
AST transactions (-25,7 cps), as well as NUMSA strikes in both the Building and
Infrastructure segments (-14,3 cps). Although the Infrastructure segment has high
order books, their results were severely impacted by 37 power disruptions that
crippled their manufacturing capacity (-3,8 cps) and by government tender and order
implementation delays.
D. EPS includes the net gain from the disposal of 51% of the Watertech and
Sanitaryware clusters to Grohe, as well as the step-up cost of the AST business to a
90% equity holding (+259,7 cps).
Conclusion
Management has taken swift action to address areas within their control, such as margin
management and cost control. Benefits are expected to flow through into the next quarter of
the financial year. The Group is investing in generators and UPS facilities to counter the
impact of continued load shedding and power disruptions on the Group’s operations.
Due to lower finance costs following the inflow of the Grohe transaction proceeds, as well as
the benefits of cost cutting and the expected upside of the transaction, earnings are
expected to increase from the next quarter as the benefits of additional trading and
distribution volumes materialise and once-off costs are eliminated.
The interim results will be released on SENS on 16 February 2015, a month earlier than the
Group’s traditional reporting timeframe.
The financial information on which this trading statement is based has not been reviewed or
reported on by DAWN’s auditors.
Johannesburg
12 February 2015
Sponsor
Deloitte & Touche Sponsor Services Proprietary Limited
Date: 12/02/2015 05:27:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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