Revenue was up 10% to R2.3 billion (R2.1 billion). Gross profit rose to R603.8 million (R512.8 million) and operating profit surged 61% to R138 million (R85.6 million). Net attributable profit soared to R89.2 million (R47.3 million). In addition, headline earnings per share jumped 89% to 38.11cps (20.16cps).

Outlook
Looking at the group by segment:
  • The new, substantially lower cost base in the building segment should ensure that any improvement in the top line is magnified at profit before interest and taxation level. The group expects to achieve some volume and price increases in the second half of F2013 due to the improved outlook for building plans passed. However, the group anticipates merchants to not start re-stocking soon. The group's targeted operating margins in the building segment therefore remain the same at 7-9% in the short term.
  • The recovery seen in the Infrastructure segment this year looks set to continue. However, the rate of growth at DPI and Incledon will start normalising as the recovery scenario turns into a more sustainable growth path. The group's short-term margin target remains unchanged at 3-5% for this segment.
  • Although DAWN Solutions is expected to continue growing, due to seasonality, this segment's second half volume throughput is always lower, which will lead to a lower margin.
  • Finally, DAWN International is gaining momentum, having now established an entrenched foothold in Africa and the Indian Ocean islands.

The strong statement of financial position reflects that the group now has an increased debt capacity which management intends utilising to resume growing the business.

Whilst the outlook for the group is robust, there are a number of risks that exist, with the most pertinent being a very financially stretched consumer and delays in the implementation of spending at provincial and central government levels. The effects of an overall weaker rand should have a net positive effect on DAWN, as less than 10% of revenue is imported. However, management wishes to point out that historically the second half earnings of the group is lower than the first half earnings due to the cyclical nature of the industries in which the group operates.

DAWN is now in a strong strategic position in the markets it serves and the group expects the second half results to show a sound improvement over the second half of last year, with an encouraging outlook over the medium to longer term.

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