DAWN, a maker and distributor of branded sanitaryware, kitchen, plumbing, engineering and civil products, saw revenue rise 12% to R4.2bn in the year to June, despite continuing depressed building and infrastructure markets.
The group has benefited from restructuring over the last three years, with headline earnings per share shooting up 133% from last year.
Overall sales volumes increased 7% and prices by 5%, as the group continued to increase market share. It says this is crucial in driving economies of scale and factory throughput in the company’s two main operating segments, comprising building and infrastructure.
It says its infrastructure segment is "markedly up", despite continuing pressure on the group’s main building segment.
Dawn is a bellwether for the overall health of South Africa’s building and construction industries.
It sells thousands of products used in engineering, mining, municipal, civil, plumbing and irrigation markets, and also operates in selected African countries and Mauritius.
Operating profit leapt 60% to R163m from R102m last year. Group operating margin rose from 2.7% to 3.9%, mainly on a continued improvement in its infrastructure division, especially from municipal water and sanitation projects, and maintenance work in mining.
"We are extremely pleased with the turnaround of 133% seen in headline earnings per share following a number of improvements in our business, as part of our restructuring process over the last three years," CEO Derek Tod said on Thursday.
"The main reason for the improvement in headline earnings per share was financial controls," Mr Tod said.
He also said the group had achieved "considerable improvements" in stock control.
Chief financial officer, Dries Ferreira, said on Thursday the group’s free cash-flow had improved fourfold to R221m in the last 12 months, or was double the target.
Meanwhile, net debt to equity was down to 15.8% from 71% in 2009.
"We generate double the cash flow required to service the debt of the group," Mr Ferreira said.
"It’s a good turnaround story," Janine Weilbach, equity analyst at Thebe Stockbroking, said on Thursday.
She said this was particularly so in the context of the depressed building and construction markets in South Africa.
"There are some good signs if you look at the debt. There are a lot of positives that come out of these numbers — the efficiencies are there," she said.
But, she also said there was "still some way to go".
Dawn had recently struggled with debt, which led to the implementation of a rights issue that greatly reduced gearing.
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