A turnaround plan for JSE-listed Distribution and Warehousing Network (Dawn) has been hampered during the year ended March 31, amid a slowdown in government infrastructure spending, difficult trading conditions, currency losses and lossmaking and noncore subsidiaries.

Losses in Dawn’s 49%-owned associated company Grohe Dawn Watertech (GDW) had also hit the bottom line of the company during the financial year under review.

Dawn initiated a turnaround strategy for the 2016 financial year after a number of successive periods of disappointing and subdued performance, with a focus on improving stock turn and volume throughput, reducing overheads to expand net margins, and improving working capital.

The team responsible for the turnaround was now evaluating and monitoring the progress of the turnaround strategy and identifying further performance improvements and operational efficiencies, including reviewing the exit of noncore and lossmaking businesses.

The subcommittee, comprising chairperson Diederik Fouche, lead independent director Lou Alberts, interim CEO Stephen Connelly, CFO Dries Ferreira and solutions division CEO René Roos, had been tasked with reviewing the underperforming and noncore businesses’ carry values where a likely risk of impairment had been identified.

Meanwhile, Dawn attributed the underperformance of GDW to the delayed approval of working capital funding facilities by the new controlling shareholder, which had directly impacted the efficiency of the company’s five factories.

“This impact was most visible in the disrupted supply chain of product into the market, which also negatively impacted the revenue and results of the building trading segment of Dawn,” the company said in a statement on Tuesday.

“The managing shareholder, together with the board of GDW, implemented comprehensive changes to the management team, as well as its representation on the board of directors. The new management team and board of directors have initiated a turnaround strategy and a business plan is being finalised by the managing shareholder for review by Dawn,” the company added.

Connelly would now join the GDW board, while former Dawn CEO Derek Tod, who announced his resignation as Dawn CEO in April, would remain on the GDW board for the foreseeable future.