WG Wearne posts diluted headline loss
Suppliers of materials to the building and construction industry WG Wearne (WEA) has reported a diluted headline loss per share of 0.06c for the six months ended August 2013 from a loss of 1.28c per share a year ago.
Suppliers of materials to the building and construction industry WG Wearne (WEA) has reported a diluted headline loss per share of 0.06c for the six months ended August 2013 from a loss of 1.28c per share a year ago.
No dividend has been declared for the period.
Revenue was 14.66% higher at R243.9m. The group said the growth in revenue was realised in the group’s ready mixed concrete division which yielded a 19.13% or R18.2m increase in revenue period on period. The aggregates division recorded an 11.32% or R12.6m increase in revenue period on period while the precast division has shown a 6.37% or R0.4m increase in revenue.
The increased revenues in conjunction with the focus on efficiencies resulted in a 19.37% increase in operating profit.
The gross profit margin increased to 22.67% compared to the 21.13% for the year ended February 2013.
Earnings before interest‚ tax‚ depreciation and amortisation (ebitda) increased by 7.29% to R29.9m and consequently the group reduced its total comprehensive loss by 61.18% or R2.22m to R1.4m.
The group incurred a total comprehensive loss of R1.4m for the 2013 period and continued to remain in a loss making position‚ it said. “This coupled with the negative liquidity position highlights a possible going concern issue.”
It said that it had an overdraft with Nedbank of R12.87m as well as an invoice discounting facility of R24.82m. The bank overdraft was converted into a two year term loan in September 2013 and negotiations were underway to sell further properties in the portfolio to reduce the term loan. All debt outstanding in terms of the creditors scheme of arrangement was settled in March 2013.
“In response to this position the group has been working closely in conjunction with its financiers in order to meet all its working capital requirements. The group continues to maintain a solvent position with a net asset value of R34.1m or 12.49c per share‚” it said.
The outlook for the aggregate business remained positive as the government’s planned infrastructure development started to materialise. The increased demand for road building material and railway ballast that was seen towards the end of the 2013 financial year was expected to continue‚ it said.
The order book for aggregates indicated that revenue targets set at the beginning of the financial year would be met‚ it said.
The concrete manufactured products division showed a growth of 6.37% period-on-period. The issuing of very few tenders by the Limpopo Roads Agency still negatively affected the market for concrete pipes and culverts in the Limpopo area. Greater plant efficiencies however resulted in improved profitability on slightly lower revenue‚ the company said.
