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Distribution And Warehousing Network Limited - Reviewed preliminary Group
results for the year ended 30
June 2003
DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
("DAWN" or "the Group" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
JSE code: DAW
ISIN Code: ZAE000018834
Just-in-time distribution
Reviewed preliminary Group results for the year ended 30 June 2003
FINANCIAL HIGHLIGHTS
- Revenue up 16,3%
- Earnings up 61%
- Headline earnings per share up 150%
- Net asset value per share up 33%
GROUP INCOME STATEMENT
Reviewed Audited
12 months 12 months
30 June 30 June
2003 2002
R"000 R"000
Revenue 933 051 844 922
- Continuing operations 933 051 802 222
- Discontinued operations - 42 700
Operating profit 48 194 31 082
- Continuing operations 48 194 42 150
- Discontinued operations - (11 068)
Net finance costs (6 645) (5 100)
Profit before taxation 41 549 25 982
Taxation (9 988) (6 334)
Earnings for the year 31 561 19 648
Included above:
Depreciation 8 496 8 768
Operating lease charges 8 276 7 776
Reconcilliation of headline earnings
Earnings for the year 31 561 19 648
Adjustment for the after tax effect of:
- Recovery of investment written off (4 350) -
- Impairment of fixed assets 3 543 -
- Loss on discontinued operations - 4 129
- Profit on sale of business - (4 138)
- Amortisation of goodwill 600 200
Headline earnings 31 354 19 839
Statistics
Number of shares ("000)
- in issue 188 984 298 627
- held in treasury 21 145 12 341
- weighted average 183 244 289 992
Headline earnings per share (cents) 17,11 6,84
Attributable earnings per share (cents) 17,22 6,78
Operating profit (%) 5,17 3,68
GROUP CASH FLOW STATEMENT
Reviewed Audited
12 months 12 months
30 June 30 June
2003 2002
R"000 R"000
Cash flow from operating activities 50 046 27 707
Cash flow from investing activities (7 338) 10 768
Cash flow from financing activities 11 667 (5 444)
Shares repurchased (58 785) (4 325)
Increase/(decrease) in cash resources (4 410) 28 706
Cash resources at beginning of year 18 784 (9 922)
Cash resources at end of year 14 374 18 784
GROUP BALANCE SHEET
Reviewed Audited
30 June 30 June
2003 2002
R"000 R"000
Assets
Non-current assets 23 441 25 370
Property, plant and equipment 23 441 24 770
Intangible assets - 600
Current assets 267 415 262 828
Receivables and prepayments 141 510 149 845
Inventory 111 531 94 199
Cash and cash equivalents 14 374 18 784
Total assets 290 856 288 198
Equity and liabilities
Capital and reserves
Ordinary shareholders" equity 96 481 123 705
Non-current liabilities 26 815 9 779
Interest-bearing liabilities 22 238 5 477
Deferred tax liabilities 4 577 4 302
Current liabilities 167 560 154 714
Trade and other payables 162 812 144 872
Interest-bearing liabilities 4 748 5 842
Convertible debentures - 4 000
Total equity and liabilities 290 856 288 198
Capital commitments 10 650 9 672
Future commitments 67 030 73 703
Finance leases 14 574 10 633
Operating leases 52 456 63 070
Value per share
Asset value per share
- net asset value (cents) 57,48 43,21
- market price (cents) 92 42
Financial gearing ratio (%) 27,97 12,38
Current asset ratio (times) 1,60 1,70
STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
12 months 12 months
30 June 30 June
2003 2002
R"000 R"000
Opening balance 123 705 108 382
Attributable earnings 31 561 19 648
Treasury shares acquired (6 428) (3 885)
Shares repurchased and cancelled (52 357) (440)
Balance at the end of the year 96 481 123 705
COMMENTARY
NATURE OF BUSINESS
Distribution and Warehousing Network Limited is a leading distributor and
specialist supplier of plumbing, hardware and related materials to the retail
sector of the building and plumbing industry.
OVERVIEW
The directors are pleased to report that the Group enjoyed improved trading
conditions compared to the previous year. This was particularly evident during
the first half of the year. The continued high real interest rates and its
effect on disposable income resulted in a softening in the market, which
impacted on volumes and margins during the second half. However, management"s
dedication to disinvest from non-core activities and to improve internal
efficiencies resulted in substantially improved results for the year.
FINANCIAL RESULTS
Revenue increased by 16,3% to R933 million. Headline earnings for the year
improved by 58% to R31,4 million (2002: R19,8 million). The Group repurchased
118,4 million shares during the year, at a cost of R58,8 million. The
repurchase, as well as the improvements mentioned above, resulted in headline
earnings per share increasing by 150% to 17,11 cents (2002: 6,84 cents).
Attributable earnings at R31,6 million (2002: R19,6 million), resulted in
attributable earnings per share of 17,22 cents, against 6,8 cents in the
previous year. Net asset value per share increased from 43 cents to 57,5 cents.
In spite of the expenditure on the share repurchase programme, cash at year-end
was R14,4 million. Although 25,9 million 8% redeemable preference shares to the
value of R12,4 million were issued in partial funding of the specific share
repurchase transaction during July 2002, interest-bearing debt only increased by
R11,7 million during the year.
Considering the effect that the share repurchase has had in reducing the
shareholders" equity and the consequent effect on the debt-equity ratio, gearing
only increased to 27% from 12% the previous year.
ACCOUNTING POLICIES
These 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 annual financial statements for the year ended
30 June 2002.
AUDITORS" OPINION
The results have been reviewed by Pricewaterhouse-Coopers Inc and their
unqualified report is available for inspection at the Company"s registered
office.
PROSPECTS
The Group expects the softening in trading conditions to continue for most of
the first half of the new year. However, the reduction in interest rates as well
as the implementation of expansion opportunities, should result in a stronger
second half. The Group expects to continue to improve on this year"s
performance.
Distribution to shareholders
The Board has recommended a distribution of 4 cents per share, subject to
shareholders" approval. A further announcement will be made in due course.
On behalf of the board
Lm Alberts DA Tod
Chairman Chief executive officer
Johannesburg
4 September 2003
Registered office: 2 Keerom Road, Heriotdale Ext 10, Cleveland, Johannesburg
2000
Transfer secretaries: Computershare Investor Services Limited, 70 Marshall
Street, 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
www.dawnltd.co.za
Date: 04/09/2003 08:21:02 AM Supplied by www.sharenet.co.za
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