| Thu 23 Aug 2007, 17:54 | | ILA - Iliad - Unaudited Results For The Six Months |
|
ILA - Iliad - Unaudited Results For The Six Months Ended 30 June 2007
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA & ISIN ZAE000015038
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007
- EPS 24% UP
- OPERATING PROFIT 30% UP
- EPS 36% UP
|ENERGY|PASSION|FOCUS|PERFORMANCE|
NATURE OF BUSINESS
Iliad Africa Ltd ("Iliad" or "the group") focuses on sourcing, distributing,
wholesaling and retailing general and specialised building materials. A range of
customers, from large-scale contractors to do-it-yourself homeowners, are
serviced through 102 stores.
FINANCIAL HIGHLIGHTS
Iliad has posted its tenth successive period of half-year growth in earnings for
the six months to 30 June 2007. In line with expectations, results for the
period showed a 36% increase in earnings per share to 70,8 cents against the
comparable period in 2006. Turnover increased by 31% to R1,9 billion while the
operating margin remained at 7,4%.
Increased activity required more working capital, which remained well managed at
8%.
The year-on-year drop in the rate of taxation for the period was primarily due
to no STC being paid, as the distribution was made out of share capital.
OPERATIONAL REVIEW
Iliad`s solid operating results reflect its unfolding strategic thrust and
continued demand in the marketplace. Supply-line shortages during the period
placed pressures on gross margins which have now stabilised.
Solid growth was experienced in the residential market and the flow of work from
the non-residential market gained momentum. Early signs of a slowing residential
market are evident.
The general building materials division experienced a phenomenal six-month
period on the back of higher-than-expected market growth, particularly in the
outlying towns.
The Campwell Hardware acquisition has performed in line with expectations and is
on track to achieve the warranted profit.
The cash & carry cluster consisting of ten stores is operating profitably,
although the continued organic roll out has temporarily been suspended, pending
normalisation of cement supplies.
The specialised building materials division produced a more muted performance
due to slow commercial project flow in the first quarter. The pipeline is now
looking healthy and we expect a solid second half.
The operating performance of the wholesale cluster continued its improvement.
The cluster has operated off a solid base for the full six months and we are
confident that the next six months will continue to produce further
improvements. We see significant further potential for this cluster.
Inflation on locally sourced product rose to 10% while the total group averaged
closer to 8%.
ACQUISITIONS
During the period no new acquisitions were concluded. Subsequent to the review
period, two acquisitions were announced.
The general building materials division acquired USM Building Materials located
in Uitenhage with another outlet in Jeffreys Bay. In line with our strategic
thrust, this acquisition accelerates the division`s geographic roll-out.
The specialised building materials division acquired Thorpe Timbers located in
Gauteng. With the projected timber shortage looming, it was strategically
important to gain access to the flow of imported timber. Thorpe Timbers provides
both the expertise and the market know-how in this regard. It also provides an
opportunity for geographic expansion.
These acquisitions will add over R300 million to Iliad`s turnover over a 12-
month period.
Both are subject to competition authority approval. As a result we do not expect
more than three months` contribution to profits from these acquisitions in the
financial year.
THE MARKETPLACE
The residential market has been driven by the middle-income sector during the
period. Clear signs of a slowdown in growth are apparent as a result of rising
interest rates and the introduction of the National Credit Act. Developers are
also finding it increasingly difficult to acquire serviced land on which to
build.
The commercial market is showing reasonable growth, largely offsetting the
slowdown in the residential market. This, together with a solid additions,
refurbishment and alterations market, will ensure acceptable levels of activity
for Iliad into 2008.
Inflationary pressures in the marketplace are beginning to be felt from a
material supply perspective, which may add to a slowing rate of growth into the
future.
PROSPECTS
Iliad enters the second half of FY2007 on a sound footing. Despite the general
slowing of activity in the residential market, the group is well positioned to
capitalise on the commercial market as well as growth in the additions,
refurbishment and alterations market.
ACCOUNTING POLICIES
The unaudited results of the group for the six months ended 30 June 2007 have
been prepared in accordance with the group`s accounting policies, which comply
with International Financial Reporting Standards. Except for the application of
AC 503 - Accounting for Black Economic Empowerment (BEE) Transactions, details
of which are set out below, these policies are consistent with those of the
previous period.
On 18 March 2005 the group concluded a broadbased BEE transaction. In terms of
which options were granted for 12 243 804 ordinary shares at a strike price to
be calculated in accordance with a formula. These options have been
independently valued at R40 246 899.
During the current period the group has retrospectively adopted AC503 Accounting
for BEE transactions, the implications of which are as follows:
- The profit for the year ended 31 December 2005 has been restated with a
corresponding credit of R40 246 899 to shareholders equity resulting in the
earnings and headline earnings per share for the year ended 31 December
2005 being reduced by 27,8 cents per share.
- Apart from the reclassification between the various components of
shareholders` equity as stated above, there has been no impact on the 2006
or 2007 results.
DISTRIBUTIONS
In line with the Group policy, no interim distribution has been declared.
FURTHER CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement released on the Securities Exchange News
Service of the JSE Limited on 18 July 2007 regarding a request received by the
board of directors of Iliad to enter into discussions which may lead to the
making of an offer for the entire issued ordinary share capital of Iliad,
shareholders of Iliad are advised that these discussions are ongoing.
Accordingly, shareholders of Iliad are advised to continue exercising caution
when dealing in securities of Iliad until a further announcement is made.
For and on behalf of the Board of Directors
23 August 2007
Ralph Patmore Chief Executive Officer
Neil Goosen Financial Director
BALANCE SHEET
Unaudited Unaudited Audited
R000 30 June 2007 30 June 2006 31 Dec 2006
ASSETS
Non-current assets
Property, plant and equipment 56 151 48 389 56 498
Intangible assets 373 461 173 315 373 461
Deferred taxation 19 297 14 789 20 798
Total non-current assets 448 909 236 493 450 757
Current assets
Inventories 638 716 490 031 584 638
Trade and other receivables 513 053 401 219 403 884
Cash and cash equivalents 60 547 161 749 156 854
Total current assets 1 212 316 1 052 999 1 145 376
Total assets 1 661 225 1 289 492 1 596 133
EQUITY AND LIABILITIES
Capital and reserves
Share capital 145 440 204 013 204 014
Share based payment reserve 40 247 40 247 40 247
Retained income 606 697 376 809 503 019
Total shareholders` equity 792 384 621 069 747 280
Non-current liabilities
Long-term borrowings 52 805 844 53 209
Total non-current liabilities 52 805 844 53 209
Current liabilities
Trade and other payables 803 637 647 574 764 552
Short-term borrowings 1 188 1 211 1 297
Taxation 11 211 18 794 29 795
Total current liabilities 816 036 667 579 795 644
Total equity and liabilities 1 661 225 1 289 492 1 596 133
INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
% ended ended ended
R000 Increase 30 June 2007 30 June 2006 31 Dec 2006
Turnover 31 1 963 588 1 501 074 3 368 388
Cost of sales 1 443 105 1 087 974 2 398 881
Gross margin 520 483 413 100 969 507
Administration, selling and
distribution expenses 375 178 301 588 691 447
Operating profit 30 145 305 111 512 278 060
Net (finance charges) /
investment income (1 560) 1 436 2 310
- Interest paid (9 295) (1 415) (6 200)
- Interest received 1 746 1 637 3 355
- Dividends received 5 989 1 214 5 155
Profit before taxation 143 745 112 948 280 370
Taxation (40 067) (36 973) (78 186)
Profit for the period 36 103 678 75 975 202 184
RECONCILIATION BETWEEN EARNINGS
AND HEADLINE EARNINGS
Profit for the period 103 678 75 975 202 184
Adjusted for:
Profit on disposal of property,
plant and equipment (598) (494) (1093)
Headline earnings for
the period 37 103 080 75 481 201 091
Number of ordinary shares in
issue at end of period
including 7 851 111 treasury
shares (2006: 7 851 111
treasury shares) 154 284 519 154 284 519 154 284 519
Weighted average number
of ordinary shares in
issue net of treasury shares 146 433 408 146 049 889 146 240 876
Diluted weighted average
number of ordinary shares
in issue net of treasury
shares 152 194 619 150 671 887 150 403 056
Headline earnings
per share (cents) 36 70,4 51,7 137,5
Earnings per share (cents)36 70,8 52,0 138,3
Diluted headline
earnings per share (cents)35 67,7 50,1 133,7
Diluted earnings per
share (cents) 35 68,1 50,4 134,4
Distribution per
share (cents) 40,0
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
R000 June 2007 30 June 2006 31 Dec 2006
Cash flows from operating
Activities (27 403) 30 978 197 874
Cash flows from investment
Activities (9 817) (16 264) (208 128)
Cash flows from financing
Activities (59 087) (47 086) (45 848)
Decrease in cash and cash
Equivalents (96 307) (32 372) (56 102)
Cash and cash equivalents at
beginning of the period 156 854 192 623 192 623
Cash and cash equivalents
Acquired 1 498 20 333
Cash and cash equivalents at
end of the period 60 547 161 749 156 854
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
30 June 2007 30 June 2006 31 Dec 2006
Net asset value per
share (cents) 541,1 429,0 510,3
Net tangible asset value
per share (cents) 286,1 305,8 255,3
Capital expenditure (R000) 12 083 6 462 20 531
Purchase of new businesses (R000) 11 120 242 130
Capital commitments (R000)
- approved and contracted 30 950 11 690 20 150
- approved not contracted 15 100 7 800 13 600
Depreciation (R000) 11 006 10 662 22 254
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Unaudited Unaudited Audited
R000 30 June 2007 30 June 2006 31 Dec 2006
Balance at the beginning
of the period 747 280 591 349 591 349
Movements in share capital (58 574) 605 606
Options exercised 605 606
Distribution out of share capital (58 574)
Movement in retained income 103 678 29 115 155 325
Profit after taxation 103 678 75 975 202 184
Dividends paid (46 860) (46 859)
Total shareholders` equity at
end of the period 792 384 621 069 747 280
Ferreira`s Buildware, Rietpan Hardware, BM Builders Market, Building Centre,
Lowveld Building Supplies, Cachet International, Rustenburg Building Material, F
& F Building Supplies, Chipbase, D&A Timbers, Ferreiras Decor World, Just Tiles,
The Tile Depot, Benoni Builders Supplies, B&B Locksmith Distributors, Suncol,
Citiwood, Q-Lite, Sanware & Plumbing, W&B Hardware, Keylok Supplies, Topform,
Buchel, DH Design Hardware, The Knob & Knocker, Bildware, Campwell Hardware,
SDT, Saflok, W Miller Hardware, Modern Bathrooms.
Registered address
First Floor, East Block, Pineslopes Office Park, c/o The Straight & Witkoppen
Road, Lonehill, PO Box 2572, Honeydew 2040
Directors
HC Turner (Chairman)*, RB Patmore (Chief Executive Officer), NP Goosen, RT
Ririe*, MY Sibisi* *Non-executive
Transfer secretaries
Link Market Services South Africa (Pty) Limited
11 Diagonal Street
Johannesburg 2001
PO Box 4844 Johannesburg 2000
Sponsor
Bridge Capital Advisors (Pty)?Ltd
Second Floor
27 Fricker Road
Illovo
PO Box 651010
Benmore 2010
Date: 23/08/2007 16:59:20 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
