Established as a construction company in 1910, WG Wearne is one of the oldest suppliers of materials to the building and construction sector in South Africa. The company has a long history in the business, initially starting in sand and stone before growing into a diversified group employing around 600 people.

Operations today extend from Gauteng to Limpopo, KwaZulu-Natal and the Free State. The group’s product and services portfolio comprises aggregates, ready mix concrete, premix, lab services, precast concrete and mobile crushing and screening services. Operations are supported by 10 fixed plants and four mobile plants, servicing the commercial, industrial, mining and housing sectors. The Ready Mix division contributes 45% of revenue, with the Aggregates division contributing 43%.

WG Wearne shares are listed on the AltX of the Johannesburg Stock Exchange (JSE) with a market cap of R22 million.

WG Wearne’s performance has been severely impacted by tough trade conditions, caused by a decrease in large infrastructure projects and increased levels of competition. This has been further exacerbated by low economic growth and higher energy prices and fixed costs. Financial data for 2016 reflected these challenges. Despite revenue growing, operating profit margin decreased from 4% to 1%. Net operating profit decreased from R17 million to R5 million, and R26 million of paid interest led to a total loss of R19 million. The important Ready Mix division had a slight increase in revenue, but the Aggregates division suffered a revenue decrease.

In response to tough trading conditions and concerning results, the group has decided to buy into a turnaround strategy combined with a restructuring plan. Operational segments are being reviewed for under performing assets, which will be put up for sale. Resources and available capital are further being channeled into core assets. In 2016, a decision was made to dispose of property, plant, equipment and inventories of the Precast division, at an impairment loss of R1.7 million. Total assets worth R6.1 million were disposed of by the group, but WG Wearne managed to buy R15.1 million worth of new plant and equipment.

With significant headline losses, there is uncertainty regarding the group as a going concern, and this has been further magnified by a negative liquidity position and high gearing. Going forward, the group is continuing to focus on disposing of non-core assets and identifying potential synergies between the aggregates and ready mix divisions.

WG Wearne shares are a no-go at present, as there is significant uncertainty about the forecast for the future. Investors will be loathe to buy shares in a company which has suffered heavy losses and a severely hampered balance sheet. At 8 cents, WG
Wearne share price reflects the group’s negative position. The board has warned that conditions will remain challenging for the foreseeable future, while several major contracts are coming to an end. Reflected by poor trade liquidity and a depressed WG Wearne share price on the live online stocks chart, investors won’t be scrambling to buy the shares anytime soon.

Materials

Construction

We have made it simple to buy JSE listed firm shares online. The easiest way to buy WG Wearne Group shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in WG Wearne Holdings and assist you with the setup and management of your stock portfolio account.

1. Start by Filling in the BUY THIS SHARE form.
2. Insert your name, email, telephone number and monthly remuneration.
3. Then, Indicate the amount you are looking to invest in WG Wearne.
4. Click the “ INVEST NOW” button
5. Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.
6. Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)

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