Johannesburg - Distribution and Warehousing Network Limited (Dawn) reported yesterday an operating loss of R338.1 million for the six months to end September as a result of the slowdown in government spending, low levels of building activity and consumers under financial pressure against the R90.18m profit reported last year.
Dawn also had to deal with changes in the board as some of the directors left, which the company said had affected its bottom line.
Former chief operating officer Collin Bishop left the company two years ago and was followed by former chief executive Derek Tod in May last year.
“The departures of the previous chief executive, chief financial officer and merger and acquisitions director were very disruptive to the group. However, the introduction of new management in key operational positions, including the chief financial officer position, are expected to bring greater stability,” it said.
Dawn has since appointed Stephen Connelly as the interim chief executive in June and David Austin as the chief financial officer in November.
The group has two main operating segments: building and infrastructure, which are supported by the solutions segment.
The revenue for the interim period decreased 11.11 percent to R2.4 billion, down from R2.7bn, while the group reported a headline loss per share of 136.73 cents as compared with headline earnings per share of 21.91c last year.
Dawn said it had restructured its infrastructure manufacturing businesses and had closed down its Pipex factory in Botswana in order to return to profitability.
The company had also scaled down its exposure in Zimbabwe.
The interim results excluded the once-off restructuring costs and write-downs of R286m. Net finance costs decreased 10 percent to R29.2m and cash and cash equivalents was down to R85.87m, down from R89.65m last year.
Dawn did not declare a dividend during the period.
The company said it expected economic conditions in South Africa and neighbouring countries to remain difficult for some time.
Restructuring
It said it had restructured loss-making businesses in order to reduce costs in line with lower sales levels, which were expected to prevail.
Dawn said it also intended to dispose of non-core businesses including joint venture arrangements.
“The main focus in the next half-year results will be on improving the operating performance of all businesses in the group. Duplicated activities will continue to be eliminated and central services costs challenged. Securing supplier loyalty will be a priority,” the group said.
“The proceeds will be used to lower the funding required for working capital.”
Dawn shares fell 4.35 percent yesterday to close at R2.20.
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