The JSE board at Sandton, Johannesburg. Photo: Leon Nicholas
JOHANNESBURG - Distribution and Warehousing Network (Dawn), the listed manufacturer and distributor of plumbing and hardware brands, has retrenched about 1300 people in the past two years and handed retrenchments notices to a further 143 people in one of its Wholesale Housing Supplies (WHS) business on Friday.

Chief executive Edwin Hewitt said yesterday that Dawn had done most of the retrenchments and the group was now at break-even. Hewitt stressed that the group was solvent and liquid for the next 12 months.

“Although the turnaround is taking longer than expected, Dawn still expects to be profitable by its 2019 financial year.” The group said the retrenchments were necessary to right-size its DPI business, a leading manufacturer of PVC and HDPE piping systems for water reticulation and conveyance, which resulted in the closure of the DPI factory in Bellville.

It said costs associated with the retrenchments at DPI amounted to about R7million, and the retrenchments at WHS would cost about R2.5m. Hewitt said Dawn was the only master distributor in South Africa that bought at the scale it did and distributed to so many customers.

Hewitt said focus areas included sales and margin growth, strengthening trade terms with suppliers, and re-engineering for efficiency and to manage costs in line with revenue. Dawn reported significantly reduced losses in the six months to September as the group started to see the benefits of the group’s turnaround. The headline earnings a share loss reduced to 13.7cents from 98.1c.

Revenue, including business closures and disposals, declined by almost 20percent to R1.9billion from R2.4bn.

The operating loss reduced to R18.5m from R338.1m in the prior year. Dawn shares dropped 3.41percent on the JSE yesterday to close at 85 cents.

- BUSINESS REPORT