| Mon 10 Mar 2008, 10:13 | | ILA - Iliad Africa Limited - Iliad Africa records |
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ILA
ILA
ILA - Iliad Africa Limited - Iliad Africa records a decade of strong growth
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA & ISIN: ZAE000015038
("Iliad")
Iliad Africa records a decade of strong growth
Iliad Africa Ltd, the listed supplier of general and specialised building
materials, has posted its tenth successive year of earnings growth with results
for the 12 months to 31 December 2007. In line with expectations, earnings per
share rose 22% to 169 cents. Turnover increased by 24% to R4,2 billion while
operating profit before interest charges rose by 25% to R347,4 million.
Given the cash flows from operating activities, further expansion and the
strength of its balance sheet, Iliad`s directors have declared a 30% increase in
the distribution to shareholders to 52 cents per share.
Iliad focuses on sourcing, distributing, wholesaling and retailing general and
specialised building materials. A range of customers from large-scale
contractors and developers to do-it-yourself home owners are serviced through
106 stores.
Chief executive officer Ralph Patmore says, "It was a challenging but successful
year. Material shortages, rising interest rates, and the effects of the National
Credit Act were compounded by an unsolicited bid for the group`s equity. Given
the amount of management time required to deal with these issues, results for
the year clearly reflect the trading strength, depth and experience of
management in the Iliad group. Equally, the new structure of two focused
divisions - general and specialised building materials - has proved its worth as
a platform to leverage procurement opportunities and common pools of expertise.
Selling prices were under pressure as the market slowed during the period,
partially countered by the group`s procurement power."
Patmore believes Iliad`s solid operating results, albeit at a slower rate of
growth, reflect its unfolding strategic thrust and continued demand in the
marketplace. The pressure on gross margins during the year was countered by
further enhancing internal efficiencies and capitalising on the group`s ever-
improving procurement ability.
In the last quarter of 2007 Iliad acquired Gauteng-based Thorpe Timbers, a
timber merchant with a 20-year track record that imports and sources local
timber for redistribution to the construction, building and industrial market
segments.
The general buildings materials division recorded strong growth in sales and
operating profits. Campwell Hardware exceeded its warranted profits and was
smoothly integrated into the division. This has increased Iliad`s presence in
the key Western Cape market, on the back of a highly respected regional brand
led by Campwell`s existing capable management team who are the empowerment
shareholder.
All regional clusters contributed in line with or above expectation and new
outlets were opened in Kathu and Lephalale.
"During the year, we expanded the general building material division`s
geographic footprint through the acquisition of Eastern Cape-based USM Building
Materials, which has outlets in Uitenhage and Jeffrey`s Bay. At the end of the
year, we refined the model for our cash & carry cluster (ten stores) and
implemented the hub-and-spoke model successfully developed in the pilot project.
Key regional branches now serve as administrative and procurement `hubs` for
outlying stores, resulting in lower costs, greater flexibility, improved supply
chains, stronger recognisable brands and credit facilities for government type
work."
Patmore says once this new model has been consolidated, the store network will
be further expanded using regional brand names. Additional services, such as the
supply of trusses, will also be available from these outlets.
The specialised building materials division which houses Iliad`s interests in
ceramics, boards, ironmongery, lighting, plumbing and wholesale, gives the group
a competitive advantage in specification contracts, given its breadth of product
and services and procurement capability. The division recorded solid results for
the year after a slow start due mainly to delays in the award of commercial
contracts.
Iliad`s new specialised cash & carry cluster was augmented during the year with
the acquisition of National Tile Traders. The implementation date will be
towards the end of the first quarter of 2008, adding critical mass through nine
outlets and an established customer base. The cash & carry cluster will be
managed by an experienced BEE team which owns 30% of this business.
The wholesale cluster performed above expectations and is fast approaching
target operating profit levels. Patmore says with appropriate supply lines and
infrastructure in place, this cluster is now well positioned to leverage its
capabilities for the benefit of the group and external clients.
Commenting on the trading environment, Patmore says, "The residential market has
slowed at all levels during the period as the impact of higher interest rates
and new credit legislation worked through the system. In contrast, the
commercial market continued to show reasonable growth as did the market for
additions, refurbishment and alterations. Combined, these largely offset lower
activity levels in the residential market."
Inflationary pressure eased in the second half of the financial year as the
slower market allowed the group to leverage its procurement power. However,
across the group, inflation averaged around 8%.
Commenting on prospects, Patmore says, "We expect the new financial year to
present a more challenging operating environment given the combined impact of a
slowing global economy, higher domestic interest rates, inflation and the
unquantifiable effect of South Africa`s power supply issues. Iliad is, however,
well positioned to optimise its operating efficiencies, capitalise on
opportunities for strategic acquisitions and maintain its trajectory towards its
short-term target of R5 billion in turnover."
PREPARED ON BEHALF OF ILIAD BY CATHY FINDLEY PUBLIC RELATIONS ON 011 463 6372 OR
EMAIL CATHY@FINDLEYPR.CO.ZA
EDITORS NOTE:
Iliad Africa is a listed company focusing on the sourcing, distributing,
wholesaling and retailing general and specialist building materials.
GENERAL BUILDING
- Cement, doors, windows, bricks and related products
Brands include Ferreira`s Buildware, D&A Timbers, Campwell Hardware,
Builders Market, Laeveld Bouhandelaars, USM Building Materials etc.
SPECIALIST BUILDING
- Tools, hardware, ironmongery, keys , locks and accessories to resellers
Brands include Cachet International, The Knob & Knocker and SDT
- An exclusive range of local and imported sanitaryware, bathroom furniture
and accessories
Brands include Ferreiras Decor World, National Tile Traders and Decor Mart,
Just Tiles and The Tile Depot
- A range of chipboard, melamine board, shutter board, hardboard and formica
Brands include Citiwood
- Door knobs, handles , locks, access control and ironmongery
Brands include Bildware, Buchel Design Hardware etc.
- Specialist lighting ranges and related products for residential,
architectural and alterations markets
Brand includes Q Lite
- Focused on serving the short-term insurance industry`s needs relating to
the supply of geysers and related products
Brand includes Suncol
Customers range from large scale companies and developers to do it yourself
homeowners.
10 March 2008
Johannesburg
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 10/03/2008 10:13:02 Produced by the JSE SENS Department.
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