Powered by a buoyant construction industry driving demand for ready mixed concrete and aggregates, AltX-debutante WG Wearne has posted strong maiden results for the year to February 2006 ahead of pre-listing forecasts. Revenue of R196,6 million was up 12% over the previous year's R175,4 million, while net profit increased 52,6% to R15,7 million.
In line with its April trading update the group posted headline earnings per share (HEPS) of 14,63 cents, double last year's HEPS and exceeding the 11,90 cents forecast in the pre-listing prospectus. Earnings per share of 15,65 cents exceeded the 12,25 cents originally forecast, increasing 82,8% from the 2005 year-end.
CEO John Wearne says that EBITDA growth of 24% to R30 million is attributable to increased profit margins as a result of the group capitalising on rising demand for its products and services. “A thriving economy and government's spend on upgrading infrastructure have created a robust trading environment for construction companies.” He adds that the 2010 Soccer World Cup and the Gautrain project offer further growth opportunities.
WG Wearne's aggregates division led the group with 45,6% growth in turnover. In the ready mixed concrete division the group maintained turnover at a steady level while operating margins increased significantly, which according to Wearne is an achievement in a highly competitive industry.
During the year WG Wearne invested R26,6 million in expanding the production capacity of its current operations to assist in executing two new contracts worth R68 million, which were awarded to the group just before year-end.
In compliance with the mining charter the company has a 16% BEE shareholding - comprising two independent empowerment consortia which together hold 10% and its own employees who recently took up options over 4,2 million shares under the group's share incentive scheme. Wearne points out that of the group's more than 400 employees, 80% are HDIs. He adds that BEE is a priority and the group will continue to focus on maintaining and improving its HDI representation at all levels.
Looking ahead he says that continued strong trading conditions in the construction industry bode well for future growth. “To further enable the group to service new contracts and accommodate increased demand the monies raised pre-listing will be used to fund future acquisitive opportunities,” he says, pointing out that the group's heightened profile following the listing will be useful in securing these acquisitions.
Wearne concludes: “We remain confident that promising growth prospects for the industry and for the group itself will enable WG Wearne to deliver real growth in HEPS for the 2007 financial year.”
Since its debut on 21 February at R1,91, WG Wearne's share has traded strongly off the back of keen investor interest. The share closed unchanged yesterday at R2,55.
Issued by: Envisage Communications
(011) 325 5944 / 083 287 2771
On behalf of: WG Wearne Limited
John Wearne, CEO
(011) 412 3000
Issue date: 17 May 2006