| Mon 9 Mar 2009, 10:03 | | ILA - Iliad Africa Limited - Audited results for the year ended |
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ILA
ILA
ILA - Iliad Africa Limited - Audited results for the year ended
31 December 2008
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA ISIN: ZAE000015038
Audited results for the year ended 31 December 2008
Turnover up 10%
Earnings per share up 5%
Distribution maintained at 52 cents per share
NATURE OF BUSINESS
Iliad Africa Limited (Iliad or the Group) sources, distributes, wholesales
and retails general and specialised building materials. A range of customers,
from large-scale contractors to do-it-yourself homeowners, are serviced
through 112 stores.
FINANCIAL HIGHLIGHTS
Iliad posted a 1% growth in earnings for the year to 31 December 2008,
continuing its record of steady growth since listing in 1998. Despite a
considerably more challenging operating environment, earnings per share was
5% higher than 2007 at 177,2 cents. Turnover rose 10% to over R4,6 billion,
with 8% of this increase attributable to the successful integration of recent
acquisitions.
A significant increase in distribution expenses and tougher market conditions
resulted in a slight decrease in the operating margin. Despite this,
operating profit rose by 2%, again highlighting the success of Iliad`s
strategic focus on its decentralised owner-manager business ethos and strong
incentives for performance. Working capital was again well managed, resulting
in good cash flow for the year.
THE MARKETPLACE
Slowing activity has been particularly evident in the residential market as
demand continues to contract, with the effect most pronounced in larger towns
and metropolitan centres.
The start of several new housing developments have been postponed due to the
current state of the market, the protracted effects of the introduction of
national credit legislation, concerns about power supplies and the slow pace
of regulatory approvals.
The non-residential market, which until now has countered slowing residential
activity, began to reflect the downturn as the rate of growth (measured by
building plans passed) slowed in the second half, albeit off an extremely
high base.
The market for additions and alterations which is directly correlated to
personal disposable income, has slowed, but should improve once falling
interest rates take effect.
OPERATIONAL REVIEW
The Group was able to counter challenging market conditions and post a growth
in profits, due to a focus on internal efficiencies, financial disciplines
and improved procurement skills.
Iliad`s General Building Materials division recorded solid results for the
year, with the turnover increase of 9% matching inflation.
The refined model for the cash and carry cluster is producing the expected
benefits. A fully-fledged merchant outlet was opened in Lydenburg and further
investment was made in Campwell Hardware to upgrade the infrastructure in
order to fully maximise opportunities in this key Western Cape market. USM
Building Supplies, the established Eastern Cape business acquired in 2007,
achieved warranted profit and was seamlessly integrated into the Group.
Iliad`s Specialised Building Materials division produced a muted profit
performance (excluding acquisitions), given the slowing residential market
and heightened consumer cost sensitivity. Whilst divisional turnover rose by
15% compared to inflation of 4%, the increase in turnover reflects the
acquisitions of National Tile Traders, B-One and Thorpe Timber.
As a result of the ongoing disappointing profit performance, the ceramic
cluster management was changed, which will result in improved results going
forward.
The boards cluster results were adversely affected by market conditions in
spite of the positive action taken by management.
Highlights include a significant improvement in the wholesale cluster and the
ironmongery cluster produced good results and increased its market share.
PROSPECTS
Whilst the coming year is difficult to predict, 2009 is expected to present a
challenging business environment, amidst tough economic conditions. Iliad
enters the year on a sound footing. We expect the seasoned trading skills of
management and the focus on operational efficiencies to assist greatly in
dealing with some of the pressure common to economic downturns.
Although tougher market conditions are expected to impact on Group turnover,
Iliad will leverage its conservative debt structure and strong cash
generative ability, to generate the necessary cash flow required to fund
anticipated acquisition opportunities.
ACCOUNTING POLICIES
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), International Accounting
Standard IAS34(Interim Financial Reporting), JSE Listings Requirements and
the requirements of the Companies Act 61 of 1973, as amended.
The accounting policies are consistent with those applied in the most recent
audited financial statements for the prior year ended 31 December 2007.
POST BALANCE SHEET EVENTS
No significant events have occurred in the period between the reporting date
and the date of this report.
AUDIT REPORT
The results for the year have been audited by Grant Thornton, and their
unqualified audit report on the 31 December 2008 annual financial statements
is available for inspection at the Group`s registered office.
CASH DIVIDEND TO SHAREHOLDERS
In view of the sound results, positive cash flows from operating activities
and a strong balance sheet, the directors have maintained the distribution to
shareholders by paying a cash dividend of 52 cents per share (2007:
distribution of 52 cents per share).
Set out below are the salient dates applicable to the dividend:
Last date to trade "cum dividend" Wednesday, 8 April 2009.
Trading commences "ex-dividend" Thursday, 9 April 2009.
Record date Friday, 17 April 2009.
Payment date Monday, 20 April 2009.
Share certificates may not be dematerialised or rematerialised between
Thursday, 9 April 2009 and Friday, 17 April 2009, both dates inclusive.
For and on behalf of the board of directors
6 March 2009
Eugene Beneke, chief executive officer
Neil Goosen, group financial director
BALANCE sheet
Audited Audited
R000 31 Dec 2008 31 Dec 2007
Non-current assets
Property, plant and equipment 108 861 71 899
Intangible assets 580 703 468 288
Deferred taxation 19 246 23 041
Total non-current assets 708 810 563 228
Current assets
Inventories 800 250 735 151
Trade and other receivables 519 985 469 279
Cash and cash equivalents 96 238
Taxation 8 372 1 131
Total current assets 1 328 607 1 301 799
Total assets 2 037 417 1 865 027
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 122 162 090
Share based payment reserve 40 247 40 247
Retained income 984 239 733 802
Interest of shareholders of
Iliad Africa Limited 1 024 608 936 139
Minority interest 1 157
Total shareholders` equity 1 025 765 936 139
Non-current liabilities
Long-term borrowings 65 981 68 286
Total non-current liabilities 65 981 68 286
Current liabilities
Trade and other payables 920 850 854 833
Bank overdraft 19 698
Short-term borrowings 4 234 2 948
Taxation 889 2 821
Total current liabilities 945 671 860 602
Total equity and liabilities 2 037 417 1 865 027
Income statement
% Audited Audited
R000 Increase 31 Dec 2008 31 Dec 2007
Turnover 10 4 610 920 4 180 355
Cost of sales 3 261 971 2 977 275
Gross margin 12 1 348 949 1 203 080
Administration, selling and
distribution expenses 16 994 552 855 647
Operating profit before
investment income 2 354 397 347 433
Investment income 52 996 14 721
Operating profit before
finance charges 407 393 362 154
Finance charges (71 275) (22 595)
Profit before taxation 336 118 339 559
Taxation (84 524) (92 126)
Profit for the year 2 251 594 247 433
ATTRIBUTABLE TO:
Minority shareholders 1 157
Equity holders of the company 250 437 247 433
RECONCILIATION BETWEEN
EARNINGS AND HEADLINE EARNINGS
Profit for the year 250 437 247 433
Adjusted for:
Profit on disposal of
property, plant and equipment (724) (782)
Headline earnings for the year 1 249 713 246 651
Number of ordinary shares in
issue 138 217 794 146 433 408
Weighted average number of
ordinary shares in issue 141 329 209 146 433 408
Diluted weighted average
number of ordinary shares in
issue 142 668 859 150 961 099
Headline earnings per share
(cents) 5 176,7 168,4
Earnings per share (cents) 5 177,2 169,0
Diluted headline earnings per
share (cents) 7 175,0 163,4
Diluted earnings per share
(cents) 7 175,5 163,9
Distribution per share (cents) 52,0 52,0
Abridged Cash flow statement
Audited Audited
R000 31 Dec 2008 31 Dec 2007
Cash flows from operating
activities 245 727 153 236
Operating profit before
working capital changes 368 872 362 221
Working capital changes for
the year (33 243) (85 511)
Taxation paid (89 902) (122 474)
Cash utilised in investment
activities (189 986) (141 033)
Cash effect on financing
activities (171 036) (53 177)
Decrease in cash and cash
equivalents (115 295) (40 974)
Cash and cash equivalents at
beginning of the year 96 238 156 854
Cash and cash equivalents
acquired (641) (19 642)
Cash and cash equivalents at
end of the year (19 698) 96 238
Supplementary information
Audited Audited
R000 31 Dec 2008 31 Dec 2007
Net asset value per share
(cents) 741,3 639,3
Net tangible asset value per
share (cents) 321,2 319,5
Capital expenditure (R000) 56 481 32 402
Purchase of new businesses
(R000) 141 119 117 737
Capital commitments (R000)
- approved and contracted 29 120 25 721
- approved not contracted 13 460 16 272
Depreciation (R000) 33 760 22 763
Statement of changes in
shareholders` equity
Audited Audited
R000 31 Dec 2008 31 Dec 2007
Balance at the beginning of
the year 936 139 747 280
Movements in share capital (161 968) (58 574)
Shares repurchased and
cancelled (85 823)
Distribution out of stated
capital (76 145) (58 574)
Movement in retained income 250 437 247 433
Profit after taxation 250 437 247 433
Total shareholders` equity at
end of the year 1 024 608 936 139
Registered address First Floor East Block Pineslopes Office Park
c/o The Straight and Witkoppen Road Lonehill PO Box 2572 Honeydew 2040
www.iliadafrica.co.za
Directors HC Turner (chairman)* E Beneke (chief executive officer)
NP Goosen RT Ririe* MY Sibisi* *non-executive
Transfer secretaries Link Market Services South Africa (Pty) Ltd
11 Diagonal Street Johannesburg 2001 PO Box 4844 Johannesburg 2000
Sponsor Bridge Capital Advisors (Pty) Ltd 27 Fricker Road Second Floor
Illovo 2196 PO Box 651010 Benmore 2010
Date: 09/03/2009 10:03:01 Produced by the JSE SENS Department.
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