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DAWN - Audited results for the year ended 30 June 2004
Distribution and Warehousing Network Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
Alpha code: DAW
ISIN: ZAE000018834
(`DAWN` or `the Group`)
Audited results for the year ended 30 June 2004
- Annual sales exceed R1 billion
- Attributable earnings up 44,6%
- Headline earnings per share up 63,3%
Group income statement
Audited Audited
12 months 12 months
30 June 30 June
% 2004 2003
change R`000 R`000
Revenue 1 047 417 933 051
- Continuing
operations 13,9 1 042 225 915 267
- Discontinued
operations 5 192 17 784
Operating profit 62 696 48 194
- Continuing
operations 30,8 62 528 47 807
- Discontinued
operations 168 387
Net finance costs (5 813) (6 645)
Income from associate 14 513 -
Profit before
taxation 71,8 71 396 41 549
Taxation (22 617) (9 988)
Profit ater taxation 48 779 31 561
Minority interest (3 157) -
Attributable
earnings 44,6 45 622 31 561
Included above:
Depreciation 9 199 8 496
Operating lease charges 9 176 8 276
Reconciliation of
headline earnings
Earnings for the year 45 622 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 - 600
Headline earnings 45,5 45 622 31 354
Statistics
Number of shares (`000)
- in issue 169 013 188 984
- held in treasury 7 726 21 145
- share incentive scheme 12 807 15 200
- weighted average 149 445 167 680
Headline earnings per
share (cents) 63,3 30,53 18,70
Attributable earnings
per share (cents) 30,53 18,82
Operating profit (%) 6,0 5,2
Group balance sheet
Audited Audited
30 June 30 June
2004 2003
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 21 456 23 441
Investment in associates 23 023 -
Current assets 326 643 263 220
Inventory 132 566 111 531
Receivables and prepayments 167 827 137 315
Cash and cash equivalents 26 250 14 374
Total assets 371 122 286 661
Equity and liabilities
Capital and reserves
Ordinary shareholders` equity 124 778 92 286
Minority interest 12 -
Non-current liabilities 37 659 26 815
Interest-bearing liabilities 22 133 22 238
Non-interest-bearing
liabilities 12 310 -
Deferred tax liabilities 3 216 4 577
Current liabilities 208 673 167 560
Trade and other payables 183 932 149 839
Current portion of borrowings 9 113 4 748
Tax liability 15 628 12 973
Total equity and liabilities 371 122 286 661
Capital commitments 14 589 10 650
Future commitments 92 390 67 030
Finance leases 14 510 14 574
Operating leases 77 880 52 456
Asset value per share
- net asset value (cents) 84,04 60,46
- market price (cents) 240 92
Market capitalisation at
year-end (R`000) 405 631 173 865
Financial gearing ratio (%) 25,04 29,24
Current asset ratio (times) 1,57 1,57
Group cash flow statement
Audited Audited
12 months 12 months
30 June 30 June
2004 2003
R`000 R`000
Cash generated from operations 53 936 64 447
Net finance charges paid (4 061) (6 645)
Taxation paid (16 623) (7 985)
Cash flow from operating
activities 33 252 49 817
Cash flow from investing
activities (26 364) (7 339)
Cash flow from financing
activities 19 666 11 897
Capital distribution (7 169) -
Shares repurchased (7 509) (58 785)
Increase/(decrease) in cash
resources 11 876 (4 410)
Cash resources at beginning
of year 14 374 18 784
Cash resources at end of year 26 250 14 374
Statement of changes in equity
Audited Audited
12 months 12 months
30 June 30 June
2004 2003
R`000 R`000
Opening balance 92 286 119 280
Attributable earnings 45 622 31 561
Capital distribution (7 169) -
Share incentive scheme 1 548 230
Treasury shares acquired (7 509) (5 988)
Shares repurchased and
cancelled - (52 797)
Balance at the end of
the year 124 778 92 286
Commentary
Group profile
The DAWN Group is a leading distributor and supplier of quality plumbing,
hardware and related materials to the retail sector of the building and
construction industries. Recent investments have given DAWN access to an
expanded product range and customer base, including the petrochemical,
agricultural and mining sectors of the market, as well as into infra-structural
development, both locally and in selected African countries.
Financial Overview
The Group is operating in a favourable market environment, resulting in buoyant
trading conditions during the period. As a consequence, two important milestones
were recorded, namely monthly sales in excess of R100 million and annual sales
of over R1 billion.
Turnover increased to R1, 047 billion, resulting in a 14% increase on continuing
operations. This result was achieved without any growth from acquisitions as
focus was applied to consolidation of existing businesses.
Operating profit as a percentage of turnover increased from 5,2% to 6%, whilst
profit before tax of R71 million is 72% higher than that of the comparative
period.
Headline earnings at R45,6 million represent an increase of 45% over the
comparative period, whereas earnings per share and headline earnings per share
at 30,5 cents increased by 63%.
Net asset value of 84 cents per share is 39% higher, whilst cash on hand stood
at R26 million (2003: R14 million). The debt ratio decreased from 29% to 25% at
year-end.
The 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 for the year ended 30 June
2003, except for the consolidation of the share incentive trust in terms of
AC132. These financial statements have been audited by the Group`s auditors,
PricewaterhouseCoopers Inc, and their unqualified report is available for
inspection at the Group`s registered office.
Post-balance Sheet Events
The following events occurred after year-end:
- The Group acquired a 76% interest in Amalgamated Fasteners and Fittings Group
(Pty) Limited (`AFF`), effective from 1 July 2004.
AFF is involved in the wholesale distribution of hardware fittings and
components for the cabinet industry, on a national basis. The maximum purchase
consideration for the 76% is R15,2 million, payable over two years on a
warranted future earnings basis. The DAWN Group also has a call option to
acquire the balance of the AFF shareholding during the next two years, at a
similar P/E ratio of 4.
- The DAWN Group has acquired a 78% shareholding in Cobra, at a purchase
consideration expected to amount to R145 million for 100%, effective 1 January
2005 at the latest and subject to certain suspensive conditions. An announcement
in this regard was published on 30 July 2004.
Prospects
The Group anticipates the building, construction and property sectors to
continue its upward trend in the foreseeable future, especially in view of the
latest reduction in interest rates. In addition, benefits from the
abovementioned strategic actions should become evident during the next year. As
a result the Group is well positioned to continue its strong improvement in
earnings for the foreseeable future.
The issue of Black Economic Empowerment is also being addressed as a matter of
great importance and urgency. The Group expects to make an announcement in this
regard in the near future.
Distribution to Shareholders
In keeping with the Group`s policy, the Board has recommended a capital
distribution of 7 cents per share, subject to shareholders` approval. A further
announcement in this regard will be made in due course.
On behalf of the Board
LM Alberts DA Tod Johannesburg
Chairman Chief executive officer 18 August 2004
Registered office
2 Keerom Road, Heriotdale Ext 10, Cleveland, Johannesburg 2000
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall Street,
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
www.dawnltd.co.za
Date: 18/08/2004 05:57:15 PM Produced by the JSE SENS Department
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