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DISTRIBUTION AND WAREHOUSING NETWORK LIMITED - INTERIM RESULTS FOR THE SIX

Release Date: 26/02/2004 08:34
Code(s): DAW
Wrap Text

DISTRIBUTION AND WAREHOUSING NETWORK LIMITED - INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2003 DISTRIBUTION AND WAREHOUSING NETWORK LIMITED ("DAWN" or "the Group") (Incorporated in the Republic of South Africa) (Registration number 1984/008265/06) Alpha code: DAW ISIN: ZAE000018834 INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2003 Revenue up 6% Attributable earnings up 39% Headline earnings per share up 63% GROUP INCOME STATEMENT Unaudited Reviewed Audited 6 months 6 months 12 months 31 December 31 December 30 June
2003 2002 2003 R"000 R"000 R"000 Revenue 509 675 488 240 933 051 - Continuing operations 504 483 6% 477 628 915 267 - Discontinued operations 5 192 10 612 17 784 Operating profit before finance charges 32 282 28 425 48 194 - Continuing operations 32 114 14% 28 280 47 807 - Discontinued operations 168 145 387 Net finance costs (2 453) (2 834) (6 645) Income from associates 2 466 - - Profit before taxation 32 295 25 591 41 549 Taxation (9 236) (8 947) (9 988) Earnings for the period 23 059 39% 16 644 31 561 Included above: Depreciation 4 453 3 762 8 496 Operating lease charges 5 319 5 352 8 276 Reconciliation of headline earnings Earnings for the period 23 059 16 644 31 561 Adjustment for the after tax effect of - Recovery of investment written off - - (4 350) - Impairment of fixed assets - - 3 543 Amortisation of goodwill 519 600 600 Headline earnings 23 578 37% 17 244 31 354 Statistics Number of shares ("000) - issue 179 232 188 984 188 984 - held in treasury 16 771 16 627 21 145 - weighted average 164 720 195 881 183 244 Headline earnings per share (cents) 14,31 63% 8,80 17,11 Attributable earnings per share (cents) 14,00 65% 8,50 17,22 Operating profit (%) 6,33 5,82 5,17 GROUP BALANCE SHEET Unaudited Reviewed Audited
31 December 31 December 30 June 2003 2002 2003 R"000 R"000 R"000 Assets Non-current assets Property, plant and equipment 22 221 24 358 23 441 Investment in associates 22 080 - - Current assets 297 711 262 480 267 415 Receivables and prepayments 155 819 146 325 141 510 Inventory 129 487 116 155 111 531 Cash and cash equivalents 12 405 - 14 374 Total assets 342 012 286 838 290 856 Equity and liabilities Capital and reserves Ordinary shareholders" equity 114 147 84 969 96 481 Non-current liabilities 44 400 23 517 26 815 Interest-bearing liabilities 23 589 19 215 22 238 Non-interest-bearing liabilities 16 234 - - Deferred tax liabilities 4 577 4 302 4 577 Current liabilities 183 465 178 352 167 560 Trade and other payables 178 453 154 467 162 812 Interest-bearing liabilities 5 012 7 029 4 748 Bank overdraft - 16 856 - Total equity and liabilities 342 012 286 838 290 856 Future commitments Finance leases 16 190 13 159 14 574 Operating leases 78 395 57 062 52 456 94 585 70 221 67 030
Value per share net asset value (cents) 70,26 49,30 57,48 market price (cents) 170 60 92 Financial gearing ratio (%) 25,06 50,72 27,97 Current asset ratio (times) 1,49 1,47 1,60 GROUP CASH FLOW STATEMENT Unaudited Reviewed Audited 6 months 6 months 2 months
31 December 31 December 30 June 2003 2002 2003 R"000 R"000 R"000 Cash flow from operating activities 6 262 15 583 50 046 Cash flow from investing activities (24 586) (6 767) (7 338) Cash flow from financing activities 21 748 (1 486) 11 667 Shares repurchased (5 393) (42 970) (58 785) Increase/(decrease) in cash resources (1 969) (35 640) (4 410) Cash resources at beginning of period 14 374 18 784 18 784 Cash resources at end of the period 12 405 (16 856) 14 374 STATEMENT OF CHANGE IN EQUITY Unaudited Reviewed Audited 6 months 6 months 12 months
31 December 31 December 30 June 2003 2002 2003 R"000 R"000 R"000 Opening balance 96 481 123 705 123 705 Attributable earnings 23 059 16 644 31 561 Treasury shares acquired (5 393) (3 024) (6 428) Shares repurchased and cancelled - (52 356) (52 357) Balance at the end of the period 114 147 84 969 96 481 COMMENTARY Nature of business The Group is a focused and leading distributor and supplier of plumbing, hardware and related materials to the retail sector of the building and plumbing industry. Dawn has built a reputation of always having stock and supplying on a just-in-time basis. Financial review Turnover increased by 5,6%, to R509 million for the six months under review. This improvement should be viewed in the light of the disinflationary environment, where the PPI for the period was close to zero. Operating profit increased by 14% to R32,3 million, whilst the earnings increased by 39% to R23 million. Income from the associate company Incledon (Pty) Limited, contributed R2,4 million to earnings for the period. Headline earnings for the period improved by 37% to R23,6 million. The Group repurchased 5,37 million shares during the period at a cost of R5,4 million. The repurchase, as well as the improvements mentioned above, resulted in headline earnings per share increasing by 63% to 14,3 cents against 8,8 cents for the comparable period. Working capital increased over the December period due to short-term tactical reasons and to ensure adequate service levels during the seasonal shut down by manufacturers. Stock levels of imported ranges were also increased in order to take advantage of margin opportunities. The resultant negative impact on cash flow is of short duration and the directors expect strong cash flow generation over the next six months. Gearing decreased from 28% to 25% whilst equity increased from R96 million to R114 million from the end of the previous reporting period. 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 2003. Prospects The Group expects the improvement in trading conditions to continue in the foreseeable future, which will result in a strong second half performance. Home ownership and improvement as well as infrastructural development remain an important driving force for both individuals and government and to which the Group will continue to make a substantial contribution. The Group also continues to pursue suitable opportunities to expand its markets and product range. Distribution to shareholders As the Group"s policy is to distribute dividends at year-end, no interim dividend will be declared. On behalf of the board LM Alberts DA Tod Chairman Chief executive officer Johannesburg 26 February 2004 Registered office 2 Keerom Road, Heriotdale Ext 10, Cleveland, Johannesburg 2000 Transfer secretaries Computershare Limited, 70 Marshallstreet, Marshalltown 2001 (PO Box 61051, Marshalltown 2107) Directors LM Alberts* (Chairman), DA Tod (Chief executive officer), JA Beukes, RL Hiemstra*, AB Lishman* *Non-executive E-mail: info@dawnltd.co.za Date: 26/02/2004 08:34:06 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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