Source: Business Report
WG Wearne alerts shareholders of its acquisition prospects
March 13, 2007
By Roy Cokayne
Pretoria - WG Wearne, the AltX-listed supplier of ready-mixed concrete and aggregates, is on the acquisition trail again.
The company yesterday advised shareholders to exercise caution in dealing in its shares because it had entered into negotiations that might have a material effect on the price of the company's shares if they were successfully concluded.
John Wearne, the chief executive, confirmed yesterday that the firm was looking at acquisitions.
But Wearne said it still had to do a due diligence "so it will be at least a month before we know whether we will have a final agreement or not".
WG Wearne made a sterling debut on AltX in February last year at R1.91, almost double the R1 value at which the shares had been priced in a private placement prior to listing.
The private placement was more than 27 times oversubscribed for the 25 million shares offered.
The company said the money raised through the pre-listing private placement would be used to strengthen the company's balance sheet for possible future acquisitions and growth opportunities.
In September, WG Wearne acquired three sand and stone quarries in Gauteng from W de Bruyn Sandwerke for R140 million. The quarries are situated on the West Rand and produce in excess of 70 000 tons of sand and stone a month.
The acquisition also included a fleet of 40 vehicles, boosting Wearne's total fleet to 165 trucks.
This acquisition brought the company a step closer to sourcing a substantial portion of its aggregates needs internally, which was one of the company's goals prior to listing, and to expand its plant and fleet to extend its footprint in Gauteng.
In October, it reported a 57 percent increase in headline earnings a share to 10.18c for the six months to August from 6.48c in the previous corresponding period.
This was achieved on a 72 percent increase in revenue to R166.9 million from R96.9 million.
In regard to its prospects, the company said the second half of the year was traditionally slower due to the builders break over the festive season, but most of its major projects were due to be completed only after year-end, which should enable the group to maintain current levels of turnover.
It added that the company was tendering on a number of major civil and building projects, which should ensure that it continued to deliver real growth for the full financial year to February.
WG Wearne's shares gained 3.48 percent to R5.98 yesterday.