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Distribution and Warehousing Network Limited - Repurchase Of Ordinary Shares In

Release Date: 25/10/2002 17:36
Code(s): DAW
Wrap Text

Distribution and Warehousing Network Limited - Repurchase Of Ordinary Shares In Dawn Distribution and Warehousing Network Limited (Incorporated in the Republic of South Africa) (Registration number 1984/008265/06) JSE Share code: DAW ISIN: ZAE000018834 ("DAWN") REPURCHASE OF ORDINARY SHARES IN DAWN 1. Introduction Bishop Corporate Finance (Proprietary) Limited is authorised to announce that DAWN has acquired 11 449 343 ordinary shares in the issued share capital of DAWN on the open market for a purchase consideration in aggregate of R5 109 579,94 ("the general repurchase"). The general repurchase was effected in terms of a general authority to DAWN`s directors ("the directors"), which was granted in terms of a special resolution passed by the members at DAWN`s Annual General Meeting ("AGM") held on 16 November 2001 and comprises 3,8% of the total issued ordinary shares of DAWN at the date of the AGM. 2. Implementation The general repurchase commenced on 12 March 2002 and continued on a day-to- day basis as market conditions allowed and in accordance with the JSE Securities Exchange South Africa ("JSE") Listings Requirements until 24 October 2002. The lowest and highest prices paid by DAWN for the ordinary shares were 30 cents and 47 cents per share respectively. 3. Extent of general authority outstanding The extent of the general authority outstanding for the current financial year is approximately 11 million ordinary shares, representing approximately 5,6% of the total issued ordinary share capital of DAWN. In calculating the extent of the general authority outstanding, consideration has been given to the specific share repurchase of 98 163 669 ordinary shares by DAWN, as was announced on 26 June 2002 and approved by shareholders at a general meeting held on 24 July 2002 ("the specific repurchase"). 4. Sources of funds The general repurchase has been funded from available cash resources and existing funding facilities. 5. Opinion of directors The directors have considered the effect of the general repurchase and are satisfied as to the following for a period of 12 months from the date of this announcement: - DAWN and DAWN`s subsidiaries ("the DAWN group") will be able in the ordinary course of business to pay its debts; - the assets of DAWN and the DAWN group will be in excess of the liabilities of DAWN and the DAWN group, having been recognised and measured in accordance with the accounting policies used in the audited financial statements for the year ended 30 June 2002; - the adequacy of ordinary capital and reserves of DAWN and the DAWN group; and - the adequacy of working capital of DAWN and the DAWN group. 6. Financial effects The pro forma financial effects on the earnings, headline earnings, net asset value and net tangible asset value per ordinary share, before and after the specific repurchase and the general repurchase are set out below: Per ordinary share Before After Change After Change The specific The general repurchase repurchase Notes (cents) (cents) % (cents) % Headline Earnings 1 6,84 7,40 8,19 7,23 (2,30) Earnings 1 6,78 7,30 7,67 7,12 (2,47) Net asset value 2 43,21 41,12 (4,84) 40,86 (0,63) Net tangible asset value 2 43,00 40,81 (5,09) 40,52 (0,71) Notes: 1. The amounts in the "Before" column represent the audited headline earnings and earnings per share disclosed in the financial results for the year ended 30 June 2002. The amounts in the "After" column represent the headline earnings and earnings per share after the specific repurchase and the general repurchase on the following assumptions: a. Specific repurchase * the specific repurchase was effective 1 July 2001; * an after-tax funding cost of 10,5% per annum on the borrowings required to fund the specific repurchase; * an after-tax provision for the redemption premium on the preference shares issued in part funding of the specific repurchase; * an after-tax preference dividend cost of 9,0% per annum which includes Secondary Tax on Companies ("STC") of 12,5%; and * STC of 12,5% of the specific repurchase funded out of distributable reserves. b. General repurchase * the general repurchase was effective 1 July 2001; * an after-tax funding cost of 10,5% per annum on the borrowings required to fund the general repurchase; and * STC of 12,5% of the general repurchase funded out of distributable reserves. 2. The amounts in the "Before" column represent the audited net asset value and net tangible asset value per share as disclosed in the financial results for the year ended 30 June 2002. The amounts in the "After" column represent the audited net asset value and net tangible asset value based on the financial results for the year ended 30 June 2002 adjusted for the specific repurchase and the general repurchase respectively, had it been effected on 30 June 2002. 3. The financial effect of the specific repurchase and the general repurchase on the headline earnings for the year ended 30 June 2002 has been negatively effected by an once-off STC charge of R480 250 in respect of the specific repurchase and R583 709 in respect of the general repurchase resulting from that portion of the specific repurchase and the general repurchase respectively which was funded out of distributable reserves. Headline earnings after the specific repurchase and the general repurchase excluding the once-off STC charges amount to 7,65 cents per share and 7,81 cents per share respectively. This represents an increase of 11,84% and 2,09% after the specific repurchase and the general repurchase respectively over the previously reported figure. 7. JSE listing The 11 449 343 ordinary shares repurchased by DAWN in terms of the general repurchase are to be cancelled and application is to be made to the JSE to reduce the number of ordinary shares of DAWN listed on the JSE by this number. 8. Conclusion The directors of DAWN will continue to repurchase securities as and when opportunities arise. Johannesburg 25 October 2002 Corporate adviser Bishop Corporate Finance (Pty) Ltd (Registration number 2000/012695/07) Sponsor Deloitte & Touche Sponsor Services (Pty) Ltd (Incorporated in the Republic of South Africa) (Registration number 1996/000034/07) Date: 25/10/2002 05:35:00 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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