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Distribution And Warehousing Network Limited - Interim Results For The Six
Release Date: 26/02/2004 08:34:01 Code(s): DAW
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
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