| Mon 9 Mar 2009, 10:22 | | ILA - Iliad Africa Limited - Iliad Africa posts 10% increase in turnover for |
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ILA
ILA
ILA - Iliad Africa Limited - Iliad Africa posts 10% increase in turnover for
FY08
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA ISIN: ZAE000015038
Iliad Africa posts 10% increase in turnover for FY08
Iliad Africa Limited, listed on the JSE in the industrial suppliers sector,
posted a 10% rise in turnover to R4,6 billion for the year to 31 December
2008, of which 8% is attributable to the successful integration of recent
acquisitions. Despite a considerably more challenging operating environment,
earnings per share was 5% higher than 2007 at 177,2 cents. Headline earnings
rose 1% to R249,7 million, continuing the group`s record of growth since
listing in 1998.
Eugene Beneke, Iliad`s new chief executive officer, says a significant
increase in the distribution expenses and tougher market conditions resulted
in a slight decrease in the operating margin. "Operating profit nonetheless
rose by 2%, again highlighting the success of Iliad`s strategic focus on its
decentralised owner-manager business ethos and its ability to focus on
internal efficiencies, its financial disciplines and its improved procurement
skills. Working capital was again well managed, resulting in good cash flow
for the year."
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 declaring a cash dividend of 52 cents per share (2007:
distribution of 52 cents per share).
Iliad sources, distributes, wholesales and retails general and specialised
building materials to a range of customers, from large-scale contractors to
do-it-yourself homeowners through 112 stores nationwide.
Commenting on the operating environment, Beneke says slowing activity has
been particularly evident in the residential market as demand continues to
contract, with the most pronounced effect in larger towns and metropolitan
centres. "The start of several new housing developments has been postponed
given the state of the market, 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 alternations, which is
directly correlated to personal disposable income, has slowed, but should
improve once falling interest rates take effect," says Beneke.
Beneke says Iliad was able to counter these challenging market conditions and
post growth in profits despite underperformance from the Ceramics cluster in
its specialised building materials division.
Iliad`s general building materials division recorded solid results for the
year with the 9% turnover increase matching inflation.
The group`s specialised building materials division produced a muted profit
performance (excluding acquisitions). 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.
Commenting on prospects, Beneke says 2009, although difficult to predict, is
expected to present a challenging economic and business environment. "Iliad
enters the year on a sound footing. We expect the seasoned trading skills of
management and the focus on operational efficiencies to greatly assist in
dealing with some of the pressures 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 cash flow required to fund anticipated acquisition
opportunities."
9 March 2009
Johannesburg
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 09/03/2009 10:22:01 Produced by the JSE SENS Department.
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