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Press Releases

JOINT RELEASE

 WG WEARNE LIMITED AND THE JSE LIMITED (ALTX)

ALTX CONSTRUCTION NEWCOMER WG WEARNE STAKES CLAIM TO R300 BILLION INFRASTRUCTURE SPEND

As South Africa's oldest privately-owned supplier of ready mixed concrete and aggregates such as sand and stone, WG Wearne Limited is well positioned to capitalise on the R300 billion estimated medium-term expenditure on infrastructure and government projects.  In light of the growth opportunity, the company is set to debut shortly on Altx.

Established in 1910 the family-owned WG Wearne is currently headed by fourth generation CEO John Wearne.  Its customer base in excess of 500 private and corporate customers spans the mining, infrastructure and construction industries and includes the major construction companies Concor, Group Five, Murray & Roberts and WBHO.  The company is to a large extent self-reliant, sourcing its product from its own crushing operations and delivering throughout Gauteng, North West, the Limpopo Province and the Free State using its fleet of more than 125 vehicles.

From an initial focus on the mining sector at inception, WG Wearne has established 13 operation centres able to accommodate large-scale construction projects across the range of industries.  Over the years the company has been involved in a number of prominent construction undertakings including the Rand Afrikaans University (RAU), the Western Bypass and the resurfacing of the N1, the Lesotho Highlands Water Scheme and the Angloplats Polokwane smelter.  More recently WG Wearne supplied product for the Newtown development project.

CEO John Wearne says that the listing is a strategic step towards achieving the projected revenue to February 2007 of R230 million“The listing will generate the capital necessary to grow the company both organically and through acquisition, as well as to effect our BEE transaction already in negotiations,” he says. 

He explains that optimising business operations will be critical to WG Wearne's capability to service increasing demand.   Both plant and fleet expansion in the ready mixed concrete division is planned, which will help to extend WG Wearne's footprint across the country.  “A national presence would enable us to reap the opportunity in our industry flowing from a buoyant economy, government's growth-oriented fiscal policy and capital projects such as the Gautrain and World Cup Soccer 2010.”  He adds that the expansion of the crushing operations will enable the company to source a greater portion of raw material within the group and would reduce reliance on third party suppliers. 

Wearne anticipates that the Gautrain and World Cup Soccer 2010 will present an exciting growth avenue for the company.  “Our new concrete plant being erected in Spartan, Kempton Park will be ideally located to take advantage of the Gautrain's construction opportunities with ten new stations to be built,” he says.  In addition to the estimated four new stadiums to be built for the World Cup Soccer 2010 and the upgrade of the existing six, the airports' upgrade and expansion off the back of ACSA's R5.2 billion commitment is stimulating demand for concrete. “In addition we are likely to see expansion development in the leisure industry to accommodate the tourists expected for the event.”

Wearne points out that notwithstanding the extent of government's projects and infrastructure roll-out plan, growth opportunity in the private sector should not be underestimated.  “A number of billion rand, large-scale construction projects for smelters and manufacturing plants have been put to tender,” he says. 

Designated Advisor Exchange Sponsors will shortly launch the private placement of

25 million shares at R1 a share.  Wessel Van der Merwe says: “WG Wearne has a track record of profitability dating back almost 100 years and an industry reputation that has elevated the company to one of South Africa's top construction raw material suppliers”.  “A solid business proposition, strong management team with industry experience and positive industry conditions, make WG Wearne an aspirational investment.” 

Noah Greenhill, head of business development at the JSE, says that WG Wearne is a welcome addition to the exchange, with its solid fundamentals and secure growth prospects having enabled it to pass the Altx advisory committee's strict selection criteria.  “WG Wearne reflects the high quality of business and level of sustainability demanded of an Altx company,” he said. 

Ends.

Issued by:            Envisage Communications

Nicole Sacks

                        (011) 325 5944 / 083 287 2771           

                        nsacks@envisagesa.co.za

 

On behalf of:            WG Wearne Limited

                        John Wearne, CEO

                        (011) 412 3000/082 855 2109

                        johnw@wearne.co.za

Issue date:            23 January 2006

 

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