| Tue 16 Mar 2010, 11:00 | | ILA - Iliad Africa Limited - Audited condensed financial results for the year |
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ILA
ILA
ILA - Iliad Africa Limited - Audited condensed financial results for the year
ended 31 December 2009
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA ISIN: ZAE000015038
("Iliad" or "the Group")
Audited Condensed Financial Results for the year ended 31 December 2009
NATURE OF BUSINESS
Iliad sources, distributes, wholesales and retails general and specialised
building materials. A range of customers, from large-scale contractors to do-it-
yourself home owners, are serviced through 115 stores.
THE MARKETPLACE
On the heels of a slowdown in the macro economic environment towards the end of
2008, the 2009 review period truly tested the mettle of corporate South Africa.
Recession in major economies had a knock-on effect in the economies of their
trading partners, as demand dried up. Production was curtailed and widespread
job losses ensued.
South Africa was not immune, with the steady economic growth rate of recent
years turning negative early in 2009. However, the fiscal discipline and
policies in place limited the extent of this country`s recession and, by year-
end, some market indicators had turned positive again.
The residential market slowed down significantly during 2009, evidenced by a
decline of 30% - 50% in building plans passed depending on the region and
subdued new residential construction activity. This slowdown was exacerbated by
the conservative approach of financing institutions to lending. Metropolitan
areas were the worst affected. The non-residential market and the market for
additions and alterations have also been negatively impacted by the adverse
macro economic circumstances, albeit to a lesser extent.
FINANCIAL REVIEW
Reflecting the challenges presented, the Group recorded earnings of 54,0 cents
per share for the financial year ended 31 December 2009, a decrease of 69,5% on
the 177,2 cents per share for 2008. Turnover was R3,921 billion, 15,0% below the
prior comparative period, reflecting the turbulent business environment, a
significant decline in building plans passed and a slowdown in the finishing end
of the industry. Despite reduced expenses, the lower turnover and pressure on
gross margin percentages contributed to the 64,9% decline in operating profit to
R124,2 million.
Working capital was well managed, resulting in strong cash flow for the year.
This enabled acquisitions to be funded, a dividend to be paid to the owners of
the parent and borrowings to be reduced.
OPERATIONAL REVIEW
Against the challenging background, Iliad`s general building materials division
performed well, whilst the performance of the specialised building materials
division was below expectations.
Iliad`s general building materials recorded a 14% decrease in turnover, in line
with the marked downturn in the broader industry. Trading was intensely
competitive in the metropolitan areas, however our operations in outlying areas
continued to trade well.
Divisional management used the subdued trading and consumer spending in 2009 to
reassess certain business processes to enhance efficiencies. Good cost
management mitigated the full impact of an intensely difficult trading period. A
further three stores were opened in Centurion, Wierda Park and Hartbeespoort, to
expand the division`s footprint in the region.
Our specialised building materials division delivered an operating loss as a
result of the combined impact of subdued spending, down trading and excess stock
levels across the industry. Disappointing results were delivered by the
ceramics, wholesale hinges and lighting clusters. Despite the sound results from
ironmongery and equipment hire clusters, the divisional turnover decline of 16%
together with the aforementioned negative cluster performances, resulted in
specialised building materials making a loss.
The acquisition of TPS (Timber Preservation Services), will enhance the
specialised building materials division`s range of timber wholesale services in
the Western Cape.
PROSPECTS
As expected, results for 2009 confirmed that the year was not business as usual
- at both economic and business levels. With a recovery in the building industry
still some way off, the trading environment in 2010 is expected to remain
challenging.
Indications are that lower interest rates are starting to have a beneficial
impact on the economy. This together with a less conservative approach to
funding by financial institutions is expected to have a positive influence on
the industry towards the end of the year.
Supported by strong teams, stable and diversified operations and the Group`s
cash generative nature, we believe Iliad is well positioned to resume its upward
trajectory, when growth returns to the market, and deliver on its longer-term
strategic objectives.
ACCOUNTING POLICIES
With the exception of the implementation of the new and revised standards noted
below, the same accounting policies, presentation and measurement principles
have been followed in the preparation of the condensed financial information as
were applied in the preparation of the Group`s annual financial statements for
the year ended 31 December 2008. The Group has implemented the revised IAS1,
"Presentation of Financial Statements" and IFRS8 "Operating segments". The
changes to both standards are of a presentation and disclosure nature only.
BASIS OF PREPARATION
The condensed financial results included in this announcement have been prepared
in accordance with the measurement and recognition criteria of International
Financial Reporting Standards ("IFRS") and have been prepared in accordance with
the presentation and disclosure requirements of IAS34, "Interim Financial
Reporting".
EVENTS AFTER THE REPORTING PERIOD
Iliad acquired a platform business in, DOH, the largest and most established
general building materials supplier in the Brits area (North West Province).
Regulatory approval was received for this transaction towards the end of the
year and it was implemented early January 2010.
AUDIT OPINION
Grant Thornton, the Group`s independent auditor, has audited the consolidated
annual financial statements of Iliad from which these condensed consolidated
financial results have been derived. They have expressed an unmodified audit
opinion on the consolidated annual financial statements. The audit report is
available for inspection at Iliad`s registered office.
DIVIDEND TO OWNERS OF THE PARENT
In view of the strong statement of financial position and positive cash flows
generated, the Group has declared a final dividend of 20 cents per share (2008:
52 cents per share).
Set out below are the salient dates applicable to the dividend:
Last date to trade "cum dividend" Friday, 16 April 2010.
Trading commences "ex-dividend" Monday, 19 April 2010.
Record date Friday, 23 April 2010.
Payment date Monday, 26 April 2010.
Share certificates may not be dematerialised or rematerialised between Monday,
19 April 2010 and Friday, 23 April 2010, both dates inclusive.
Johannesburg
15 March 2010
Eugene Beneke, Chief executive officer
Neil Goosen, Group financial director
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
R000 31 Dec 2009 31 Dec 2008
ASSETS
Non-current assets
Property, plant and equipment 111 162 108 861
Intangible assets 503 075 580 703
Deferred taxation 23 648 19 246
Total non-current assets 637 885 708 810
Current assets
Inventories 632 798 800 250
Trade and other receivables 445 347 519 985
Taxation 4 545 8 372
Total current assets 1 082 690 1 328 607
Total assets 1 720 575 2 037 417
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 122 122
Share based payment reserve - 40 247
Retained earnings 1 027 230 984 239
Equity attributable to owners of the parent 1 027 352 1 024 608
Non controlling interest - 1 157
Total equity 1 027 352 1 025 765
Non-current liabilities
Long-term borrowings 5 148 65 981
Total non-current liabilities 5 148 65 981
Current liabilities
Trade and other payables and provisions 680 150 920 850
Bank overdraft 3 883 19 698
Short-term borrowings 4 042 4 234
Taxation - 889
Total current liabilities 688 075 945 671
Total equity and liabilities 1 720 575 2 037 417
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% Audited Audited
R000 31 Dec 2009 31 Dec 2008
Revenue (15,0%) 3 920 511 4 610 920
Cost of sales 2 855 170 3 261 971
Gross margin (21,0%) 1 065 341 1 348 949
Administration, selling and
distribution expenses (5,4%) 941 105 994 552
Operating profit before
investment income (64,9%) 124 236 354 397
Investment income 22 388 52 996
Operating profit before finance
charges 146 624 407 393
Finance charges (51 114) (71 275)
Profit before taxation (71,6%) 95 510 336 118
Taxation (22 050) (84 524)
Profit for the year (70,8%) 73 460 251 594
Other comprehensive income for
the year - -
Total comprehensive income for
the year (70,8%) 73 460 251 594
Attributable to:
Non controlling interest (1 157) 1 157
Owners of the parent (70,2%) 74 617 250 437
73 460 251 594
HEADLINE EARNINGS RECONCILIATION
FOR THE YEAR
Attributable to owners ofthe
parent 74 617 250 437
Adjusted for:
Profit on disposal of property,
plant and equipment (743) (724)
Headline earnings for the year (70,4%) 73 874 249 713
Number of ordinary shares in
issue 138 217 794 138 217 794
Weighted average number of
ordinary
shares in issue 138 217 794 141 329 209
Diluted weighted average number
of
ordinary shares in issue 138 217 794 142 668 859
Headline earnings per share
(cents) (69,8%) 53,4 176,7
Earnings per share (cents) (69,5%) 54,0 177,2
Diluted headline earnings per
share (cents) (69,5%) 53,4 175,0
Diluted earnings per share
(cents) (69,2%) 54,0 175,5
Dividend to owners of the parent (38,5%) 20,0 52,0
(cents per share)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
R000 31 Dec 2009 31 Dec 2008
Cash flows from operating activities 142 875 245 727
Operating profit adjusted for non cash items 131 293 368 872
Working capital changes for the year 35 096 (33 243)
Taxation paid (23 514) (89 902)
Cash flows from investing activities (49 269) (189 986)
Cash flows from financing activities (78 334) (171 036)
Increase /(decrease) in cash and cash
equivalents 15 272 (115 295)
Cash and cash equivalents at beginning of the
year (19 698) 96 238
Cash and cash equivalents acquired 543 (641)
Cash and cash equivalents at end of the year (3 883) (19 698)
SUPPLEMENTARY INFORMATION
Audited Audited
31 Dec 2009 31 Dec 2008
Net asset value per share (cents) 743,3 741,3
Net tangible asset value per share (cents) 379,3 321,2
Capital expenditure (R000) 37 845 56 481
Purchase of new businesses (R000) 15 000 141 119
Capital commitments (R000)
- approved and contracted 9 285 29 120
- approved not contracted 23 849 13 460
Depreciation (R000) 36 815 33 760
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
R000 31 Dec 2009 31 Dec 2008
Total equity at the beginning of the year 1 025 765 936 139
Transaction with owners: - (161 968)
Shares repurchased and cancelled - (85 823)
Distribution to owners of the parent - (76 145)
Movement in share based payment reserve: (40 247) -
Reduction in share based payment reserve (40 247) -
Movement in retained income: 41 834 251 594
Attributable to owners of the parent 74 617 250 437
Dividends to owners of the parent (71 873)
Attributable to non controlling interest (1 157) 1 157
Reduction in share based payment reserve 40 247 -
1 027 352 1 025 765
CONDENSED SEGMENTAL REPORTING
General Building Specialised Building
Group Materials Materials
Audited Audited Audited Audited Audited Audited
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
R000 2009 2008 2009 2008 2009 2008
Revenue 3 920 511 4 610 920 2 724 018 3 171 573 1 196 493 1 439 347
Profit
before
interesta
nd tax 124 236 354 397 144 666 234 376 (20 430) 120 021
Total
assets 1 720 575 2 037 417 959 947 1 107 846 760 628 929 571
Total
liabi-
lities 693 223 1 011 652 401 016 636 466 292 207 375 186
Capital
expen-
diture 37 845 56 481 20 003 26 830 17 842 29 651
Depre-
ciation 36 815 33 760 15 825 13 785 20 990 19 975
CORPORATE INFORMATION
Registered address
First Floor East Block Pineslopes Office Park c/o The Straight & Witkoppen
Road Lonehill PO Box 2572 Honeydew 2040
www.iliadafrica.co.za
Directors
HC Turner (chairman)* E Beneke (chief executive officer)
NP Goosen T Njikizana* RT Ririe* MY Sibisi* *non-executive
Group secretary
JLD Mendes
Transfer secretaries
Link Market Services South Africa (Pty) Ltd 11 Diagonal Street Johannesburg
2001 PO Box 4844
Sponsor
Bridge Capital Advisors (Pty) Ltd 27 Fricker Road Second Floor
Illovo 2196 PO Box 651010 Benmore 2010
Date: 16/03/2010 11:00:01 Produced by the JSE SENS Department.
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