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ILA
ILA
ILA - Iliad Africa Limited - Unaudited Results for the six
Months Ended 30 June 2010
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
Registered number 1997/011938/06.
Share code ILA ISIN ZAE000015038
"Iliad" or "the Group"
Unaudited Results For The Six Months Ended 30 June 2010
NATURE OF BUSINESS
Iliad focuses on sourcing, distributing, wholesaling and
retailing general and specialised building materials.
Through 113 stores countrywide, the Group services a range
of customers, from large-scale contractors to do-it-yourself
homeowners.
FINANCIAL HIGHLIGHTS
In line with the trading statement issued on 22 July 2010,
Iliad`s earnings per share of 15,1 cents for the six months
to 30 June 2010 are 29,7% below the 21,4 cents per share
recorded for the six months to June 2009.
Turnover was 2,6% below the comparative period at R1,89
billion, reflecting the subdued business environment,
ongoing decline in building plans passed and the protracted
slowdown in the finishing end of the industry.
Year-on-year expenses (excluding new store costs and the DOH
acquisition) were reduced and gross margins have improved.
This limited the decline in profit before tax to 34,4% below
the prior period. A substantial reduction in the amount of
net interest paid also contributed to the overall earnings
performance.
Strong cash flows were generated for the period. The focus
on cost efficiencies and working capital management
underscores the Group`s cash-generative nature and positions
it well for ongoing strategic expansion.
OPERATIONAL AND MARKET REVIEW
As expected, the half-year to 30 June 2010 was another
challenging trading period. Lower sales, continued losses in
the Ceramics cluster and three new retail stores in Gauteng
which are not yet contributing to the bottom line, were key
drivers behind the decline in operating profit and, hence,
earnings. This result was countered somewhat by Iliad`s
ongoing focus on procurement, improved cost structures and
operating efficiencies. The balance of the Group (excluding
the Ceramic cluster, Timber Wholesale and the three new
stores in Gauteng), delivered year-on-year operating profit
growth.
The residential market continued to slow during the period,
evidenced by a continued decline in building plans passed
off the low base of 2009 and subdued new residential
construction activity. Despite early signs of stabilisation
in this market, the period ahead is expected to remain
challenging.
Similarly, the non-residential market now fully reflects the
adverse macro-economic circumstances. The market for
additions and alterations whilst showing signs of recovery,
remains under pressure. This is perhaps best illustrated by
the ongoing and intensified downtrading in the finishing end
as consumers search for value against constrained disposable
income.
Iliad`s General Building Materials division performed well
under these circumstances, with turnover growth of 3%
reflecting the ability to meet the needs of its selected
markets through prudent inventory management while
maintaining its comprehensive range of products. The
integration of DOH, an established general building
materials supplier in the North West Province acquired in
2010, has proceeded smoothly. A new D&A store in Ballito to
service KwaZulu-Natal`s North Coast will be opened in the
fourth quarter of the year, whilst a store in Mpumalanga has
been rationalised from the portfolio. Store openings and
closures are integral to maintaining the strategic balance
of the Group`s national footprint, and the portfolio is
under ongoing review.
In the Specialised Building Materials division, the trend
towards trading down in the finishing end continued during
the review period. This affected the performance of the
Ceramics and Timber Wholesale clusters in particular. The
Ceramics cluster was a significant contributor to the 15%
decline in divisional turnover while the Ironmongery cluster
continued its growth trajectory during the period.
PROSPECTS
Results for the first half confirm that the 2010 trading
environment is expected to remain difficult. While
conditions should improve in 2011, we believe any recovery
will be gradual.
Supported by a solid balance sheet and the group`s cash-
generative nature, Iliad has strong teams managing stable
and diversified operations. We remain confident of our
ability to capitalise on opportunities when growth returns
to the market and deliver on longer-term strategic
objectives.
ACCOUNTING POLICIES
The principal accounting policies used in the preparation of
the condensed consolidated interim financial results for the
half-year ended 30 June 2010 have been applied consistently
over the current year and are consistent with those applied
in the audited financial statements for the year ended 31
December 2009, except for the adoption of the following
standards as of 1 January 2010:
- IFRS 3 (revised), Business combinations
- IAS 27 (revised), Consolidated and separate financial
statements
- Improvements to IFRS 2009.
BASIS OF PREPARATION
The board acknowledges its responsibility for the
preparation of the condensed consolidated interim financial
statements in accordance with the Companies Act, Act 61 of
1973 as amended, international Financial Reporting Standards
(IFRS), International Accounting Standards 34 (IAS 34) and
the Listings Requirements of the JSE Limited.
These condensed interim financial statements have not been
reviewed or audited by the Group`s auditors.
DIVIDEND
In line with Group policy, no interim dividend has been
declared.
For and on behalf of the board of directors
24 August 2010, Johannesburg
Eugene Beneke, Chief executive officer
Neil Goosen, Group financial director
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
ASSETS
Non-current assets
Property, plant and 112 336 106 061 111 162
equipment
Intangible assets 503 724 533 034 503 075
Deferred taxation 25 046 18 958 23 648
Total non-current assets 641 106 658 053 637 885
Current assets
Inventories 609 930 664 039 632 798
Trade and other 493 557 523 057 445 347
receivables
Bank and cash 16 272 - -
Taxation 4 827 10 473 4 545
Total current assets 1 124 586 1 197 569 1 082 690
Total assets 1 765 692 1 855 622 1 720 575
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 122 122 122
Share based payment - 40 247 -
reserve
Retained earnings 1 020 423 942 006 1 027 230
Equity attributable to
owners of the parent 1 020 545 982 375 1 027 352
Non controlling interest - - -
Total equity 1 020 545 982 375 1 027 352
Non-current liabilities
Long-term borrowings 4 477 8 087 5 148
Total non-current 4 477 8 087 5 148
liabilities
Current liabilities
Trade and other payables
and provisions 737 803 749 865 680 150
Bank overdraft - 112 432 3 883
Short-term borrowings 2 867 2 602 4 042
Taxation - 261 -
Total current liabilities 740 670 865 160 688 075
Total equity and 1 765 692 1 855 622 1 720 575
liabilities
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
R000 % 30 Jun 30 Jun 31 Dec
2010 2009 2009
Revenue (2,6) 1 891 111 1 942 199 3 920
511
Cost of sales (1 367 (1 414 (2 855
926) 658) 170)
Gross margin (0,8) 523 527 541 1 065
185 341
Administration,
selling and 4,3 (487 975) (467 655) (941
distribution 105)
expenses
Operating profit
before investment (41,2) 35 210 59 886 124 236
income
Investment income 6 732 13 384 22 388
Operating profit
before finance 41 942 73 270 146 624
charges
Finance charges (14 847) (31 980) (51 114)
Profit before (34,4) 27 095 41 290 95 510
taxation
Taxation (6 258) (12 807) (22 050)
Profit for the 20 837 28 483 73 460
period
Other comprehensive
income for the - - -
period
Total comprehensive
income for the (26,8) 20 837 28 483 73 460
period
Attributable to:
Non controlling - (1 157) (1 157)
interest
Owners of the (29,7) 20 837 29 640 74 617
parent
Total comprehensive
income for the (26,8) 20 837 28 483 73 460
period
HEADLINE EARNINGS
RECONCILIATION FOR
THE PERIOD
Attributable to
owners of the 20 837 29 640 74 617
parent
Adjusted for:
Profit on disposal
of property, plant (331) (370) (743)
and equipment
Headline earnings
for the period (29,9) 20 506 29 270 73 874
Number of ordinary
shares in issue 138 217 138 217 138 217
794 794 794
Weighted average
number of ordinary
shares in issue 138 217 138 217 138 217
794 794 794
Diluted weighted
average number of
ordinary shares in 138 217 138 217 138 217
issue 794 794 794
Headline earnings
per share (cents) (29,9) 14,8 21,2 53,4
Earnings per share (29,7) 15,1 21,4 54,0
(cents)
Diluted headline
earnings per share (29,9) 14,8 21,2 53,4
(cents)
Diluted earnings
per share (cents) (29,7) 15,1 21,4 54,0
Dividend to owners
of the parent - - 20,0
(cents per share)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
Cash flows from operating
activities 81 372 (1 295) 142 875
Operating profit adjusted
for non cash items 46 236 58 800 131 293
Working capital changes
for the period 43 074 (44 847) 35 096
Taxation paid (7 938) (15 248) (23 514)
Cash flows from investing
activities (35 835) (14 710) (49 269)
Cash flows from financing
activities (30 529) (76 729) (78 334)
Increase/(decrease) in
cash and cash equivalents 15 008 (92 734) 15 272
Cash and cash equivalents
at beginning of the period (3 883) (19 698) (19 698)
Cash and cash equivalents 5 147 - 543
acquired
Cash and cash equivalents
at end of the period 16 272 (112 432) (3 883)
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2010 2009 2009
Net asset value per share 738,4 710,7 743,3
(cents)
Net tangible asset value
per share (cents) 373,9 325,1 379,3
Capital expenditure 20 541 16 245 37 845
(R000)
Purchase of new 18 885 - 15 000
businesses (R000)
Capital commitments
(R000)
- approved and contracted 3 680 5 868 9 285
- approved not contracted 8 914 6 950 23 849
Depreciation (R000) 19 600 18 024 36 815
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
Total equity at the
beginning of the period 1 027 352 1 025 765 1 025 765
Movement in share based
payment reserve: - - (40 247)
Reduction in share based
payment reserve - - (40 247)
Movement in retained (6 807) (43 390) 41 834
income:
Attributable to owners of
the parent 20 837 29 640 74 617
Dividend to owners of the (27 644) (71 873) (71 873)
parent
Attributable to non
controlling interest - (1 157) (1 157)
Reduction in share based
payment reserve - - 40 247
Total equity at the end
of the period 1 020 545 982 375 1 027 352
CONDENSED SEGMENTAL REPORTING
Group
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
Revenue 1 891 111 1 942 199 3 920 511
Profit before interest 35 210 59 886 124 236
and tax
Total assets 1 765 692 1 855 622 1 720 575
Total liabilities 745 147 873 247 693 223
Capital expenditure 20 541 16 245 37 845
Depreciation 19 600 18 024 36 815
CONDENSED SEGMENTAL REPORTING (CONTINUED)
General Building Materials
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
Revenue 1 375 717 1 337 438 2 724
018
Profit before interest 49 889 59 823 144 666
and tax
Total assets 1 034 218 966 923 959 947
Total liabilities 472 038 498 938 401
016
Capital expenditure 9 163 6 920 20 003
Depreciation 9 168 7 743 15 825
CONDENSED SEGMENTAL REPORTING (CONTINUED)
Specialised Building Materials
Unaudited Unaudited Audited
R000 30 Jun 30 Jun 31 Dec
2010 2009 2009
Revenue 515 394 604 761 1 196 493
Profit before interest (14 679) 63 (20
and tax 430)
Total assets 731 474 888 699 760 628
Total liabilities 273 109 374 309 292 207
Capital expenditure 11 378 9 325 17 842
Depreciation 10 432 10 281 20 990
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 Link Market Services South Africa (Pty)
secretaries 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
24 August 2010
www.iliadafrica.co.za
FOCUS
ENERGY
PASSION
PERFORMANCE
Date: 24/08/2010 11:00:01 Produced by the JSE SENS Department.
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