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Distribution And Warehousing Network Limited - Interim results for the six
months ended 31 December 2002
DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
("DAWN" or "the Group")
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
Share code: DAW
ISIN: ZAE000018834
Interim results for the six months ended 31 December 2002
Turnover up 27%
Operating profit up 96%
Headline earnings per share up 209%
Group income statement
Reviewed Unaudited Audited
6 months 6 months 12 months
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Turnover 488 240 417 497 844 922
- Continuing operations 488 240 385 838 802 222
- Discontinued operations - 31 659 42 700
Operating profit 29 025 14 776 33 043
- Continuing operations 29 025 15 955 44 111
- Discontinued operations - (1 179) (11 068)
Net finance costs (2 834) (3 015) (5 100)
Profit before exceptional
items 26 191 11 761 27 943
Exceptional items 600 4 075 (1 961)
Profit before taxation 25 591 15 836 25 982
Taxation (8 947) (3 498) (6 334)
Earnings for the period 16 644 12 338 19 648
Included above:
Depreciation 3 762 4 211 8 968
Operating lease charges 5 352 3 022 7 776
Reconciliation of
headline earnings
Loss on discontinued operations - - 5 899
Profit on sale of business - (4 175) (4 138)
Amortisation of goodwill 600 100 200
600 (4 075) 1 961
Tax relief - - (1 770)
600 (4 075) 191
Headline earnings 17 244 8 263 19 839
Statistics
Number of shares (`000)
- in issue 188 984 298 627 298 627
- held in treasury 16 627 11 100 12 341
- weighted average 195 881 290 302 289 992
Headline earnings per
share (cents) 8,80 2,85 6,84
Attributable earnings
per share (cents) 8,50 4,25 6,78
Operating profit (%) 5,94 3,54 3,91
Group balance sheet
Reviewed Unaudited Audited
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and
equipment 24 358 27 350 24 770
Intangible assets - 700 600
Current assets 262 480 236 550 262 828
Inventory 116 155 88 619 94 199
Receivables and prepayments 146 325 136 540 149 845
Cash and cash equivalents - 11 391 18 784
Total assets 286 838 264 600 288 198
Equity and liabilities
Capital and reserves
Ordinary shareholders`
equity 84 969 116 834 123 705
Non-current liabilities 23 517 25 012 9 779
Interest-bearing liabilities 19 215 12 150 5 477
Convertible debentures - 4 482 -
Deferred tax liabilities 4 302 8 380 4 302
Current liabilities 178 352 122 754 154 714
Trade and other payables 154 467 116 672 144 872
Convertible debentures - - 4 000
Current portion of borrowings 7 029 6 082 5 842
Bank overdraft 16 856 - -
Total equity and
liabilities 286 838 264 600 288 198
Future commitments
Finance leases 13 159 17 533 10 633
Operating leases 57 062 45 598 63 070
70 221 63 131 73 703
Value per share
Asset value per share
- Net asset value (cents) 49,30 40,63 43,21
- Market price (cents) 60 45 42
Financial gearing ratio (%) 50,72 19,44 12,38
Current asset ratio (times) 1,47 1,93 1,70
Group cash flow statement
Reviewed Unaudited Audited
6 months 6 months 12 months
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Cash flow from operating
activities 15 583 11 319 29 781
Cash flow from investing
activities (6 767) 8 525 8 694
Cash flow from financing
activities (1 486) 1 469 (5 444)
Shares repurchased (42 970) - (4 325)
Increase/(Decrease) in
cash resources (35 640) 21 313 28 706
Cash resources at beginning
of period 18 784 (9 922) (9 922)
Cash resources at end
of period (16 856) 11 391 18 784
statement of changes in equity
Reviewed Unaudited Audited
6 months 6 months 12 months
31 December 31 December 30 June
2002 2001 2002
R`000 R`000 R`000
Opening balance 123 705 108 382 108 382
Attributable earnings 16 644 12 338 19 648
Treasury shares acquired (3 024) (3 885) (4 325)
Shares repurchased and
cancelled (52 356) - -
Balance at the end of
period 84 969 116 834 123 705
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
Trading conditions remained buoyant during the period under review, resulting in
a 27% improvement in sales to R488 million, over the same period last year. The
Group`s strategy to divest from non-core activities, together with the
implementation of improved MIS and management focus, have resulted in an
operating profit increase of 96% to R29 million over the comparative period.
The Group repurchased 113,9 million shares during the review period at a cost of
R55,4 million, bringing the total amount repurchased over the past 12 months to
126,3 million at a total cost of R59,7 million, of which 109,6 million shares
were cancelled and the balance held in treasury. The repurchase, as well as the
improvements mentioned above, resulted in headline earnings per share increasing
by 209% to 8,8 cents.
As a result of the share buy-back programme and an intentional increase in
inventory levels toward the end of the review period, the gearing has increased
from 20% to 50,7% over the comparative period. The Board expects strong cash
flow generation during the second half which will significantly reduce gearing
towards year-end.
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 2002.
The interim results have been reviewed by the independent auditors,
PricewaterhouseCoopers Inc. Their unqualified report is available for inspection
at the company`s registered office.
Prospects
The Group expects the momentum in trading conditions to continue for the
foreseeable future. Demand for the Group`s products and services will therefore
continue to remain strong with further expansion opportunities being explored.
Accordingly the Board expects the level of headline earnings per share achieved
in the first half to be maintained in the second half.
Dividend
As a result of the strong recovery in earnings and cash flow, the Board
anticipates declaring a dividend at year-end.
Board of directors
Mr Alan Lishman was appointed as non-executive director of the Board on 24
October 2002.
On behalf of the board
LM Alberts DA Tod
Chairman Chief executive officer
Johannesburg
25 February 2003
Registered office
2 Keerom Road, Heriotdale Ext 10, Cleveland, Johannesburg 2000
Transfer secretaries
Computershare Investor Services Limited, 70 Marshallstreet, Marshalltown 2001
(PO Box 61051, Marshalltown 2107)
Directors
LM Alberts* (Chairman), DA Tod (Chief executive officer), JABeukes, RL
Hiemstra*, AB Lishman*
*Non-executive
E-mail: info@dawnltd.co.za
Alpha code: DAW
ISIN number: ZAE000018834
www.dawnltd.co.za
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Date: 25/02/2003 08:11:00 AM Supplied by www.sharenet.co.za
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