| Tue 15 Mar 2011, 11:00 | | ILA - Iliad Africa Limited - Audited condensed financial results for the year |
|
ILA
ILA
ILA - Iliad Africa Limited - Audited condensed financial results for the year
ended 31 December 2010
Iliad
(Incorporated in the Republic of South Africa)
Registered number 1997/011938/06.
Share code ILA ISIN ZAE000015038.
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 112 stores.
THE MARKETPLACE
The impact of the protracted macro-economic slowdown has been significant across
our industry. While the conservative approach of financing institutions to
mortgage lending is beginning to soften, total loans and re-advances are still
around half the levels experienced at the beginning of 2008.
Although indicators looked quite positive at the half-year stage, residential
building activity continued to contract for the rest of the year, with the value
of new residential buildings constructed significantly down on 2009. The real
value of building plans passed decreased by 4,7% on the prior year. Metropolitan
areas, where the group`s greatest exposure is, were worst affected. The non-
residential market fully reflects these challenging macro-economic
circumstances. The market for additions and alterations, while still under
pressure, is showing signs of recovery.
We anticipate that the property market will gradually recover towards the end of
2011 from the lowest interest rates in three decades, a benign inflation
forecast and increases in real disposable income.
FINANCIAL REVIEW
In line with the trading statement issued on 28 February 2011, the group
recorded earnings of 38,8 cents per share for the financial year ended
31 December 2010, down 28,1% from 54,0 cents per share for 2009.
Turnover increased by 0,2%, reflecting the subdued business environment, ongoing
decline in building plans passed and completed, as well as the protracted
slowdown in the finishing end of the industry.
Year-on-year expenses (excluding new stores and the DOH acquisition) were
reduced and gross margins have improved marginally. This limited the decline in
operating profit to 38% below the prior year. A substantial reduction in the
amount of net interest paid also contributed to the overall earnings
performance.
Working capital continued to be well managed, resulting in strong cash flow for
the year. The group`s cash-generative trend is well entrenched and positions it
well for future expansion.
OPERATIONAL REVIEW
As expected, 2010 was another challenging trading period. A subdued performance
in the Timber Wholesale cluster, continued losses in the Ceramics cluster and
four new retail stores, which are not yet contributing to the bottom line, all
contributed to the decline in operating profit and earnings. This was countered
somewhat by Iliad`s ongoing focus on procurement and cost efficiencies. Iliad`s
diversification across the industry - residential, commercial and alterations -
has proved an important strength, particularly in recent volatility. As in the
past we have capitalised on growth in one sector while another slows down.
In 2010, Iliad`s general building materials division again performed well,
recording a 5,3% increase in turnover, a commendable result in difficult trading
conditions.Solid performances from Mpumalanga, Eastern Cape, the rural
cash-and-carry businesses in Limpopo and an improvement in the Gauteng market
in the second half all contributed to results. A new D&A store opened in
Ballito towards the end of 2010 and is trading to expectations. The integration
of DOH has met set objectives.
In the specialised building materials division, the trend towards trading down
in the finishing end continued during the year. This affected the performance of
the Ceramics and Timber wholesale clusters in particular. The Ceramics cluster
was a significant contributor to the 11,2% decline in divisional turnover while
the Ironmongery cluster continued to perform well.
PROSPECTS
The trading environment is expected to remain challenging in 2011, with a
gradual trading recovery towards the end of the year. This will, however, depend
on a sustainable recovery in building plans passed.
Iliad will continue to invest in its sales structures to enhance customer focus,
concentrate on the expense base and further improve its procurement capabilities
to protect gross margins.
The group is well structured and well capitalised and we believe all
stakeholders will benefit from initiatives in place to support continued growth
as our industry improves.
ACCOUNTING POLICIES
The principal accounting policies used in the preparation of the consolidated
financial results are consistent with those applied in the audited consolidated
annual financial statements for the year ended 31 December 2009 except for the
adoption of new or revised standards, interpretations and circulars and
restatements which are discussed below.
In the current year, the group has adopted the following accounting standards
and interpretations that became applicable in this financial year,IFRS 3,
Business Combinations; IFRS 5, Non-current Assets Held for Sale and Discontinued
Operations; IAS 1, Presentation of Financial Statements; IAS 7, Statement of
Cash Flows; IAS 17 Leases; IAS 27, Consolidated and Separate Financial
Statements; and IAS 36, Impairment of assets.
Implementing these standards has not materially impacted the financial results.
RESTATEMENT
The 2009 and 2008 statement of financial position has been re-presented to show
the group`s bank overdraft separately to the cash and cash equivalents.
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 its interpretations issued by the
International Accounting Standards Board in issue and effective for the group at
31 December 2010, the AC 500 standards issued by the Accounting Practices Board
or its successor. The results are presented in terms of IAS 34, Interim
Financial Reporting, and comply with the Listing Requirements of the JSE
Limited. These condensed consolidated financial statements were approved by the
board of directors on 10 March 2011.
SUBSEQUENT EVENTS
There were no material subsequent events and no material change in the group`s
contingent liabilities since the year end.
CHANGE IN THE SECRETARY
Mr JLD Mendes has resigned as the company secretary effective
1 April 2011.
Mr SC O`Connor will take over as the company secretary from 1 April 2011.
AUDIT OPINION
The group`s external auditors, Deloitte & Touche, have issued their unmodified
opinion on the group annual financial statements for the year ended 31 December
2010. The audit was conducted in accordance with International Standards on
Auditing. A copy of their opinion is available for inspection at the registered
offices of Iliad Africa Limited.
DIVIDEND TO OWNERS OF THE PARENT
In view of the strong statement of financial position and positive cash flow
generated, the group has declared a final dividend of 20 cents per share
(2009:20 cents per share)for the 12 month period ending 31 December 2010.
Set out below are the salient dates applicable to the dividend:
Last date to trade "cum dividend", Friday, 8 April 2011
Trading commences "ex dividend", Monday,11 April 2011
Record Date, Friday, 15 April 2011
Payment Date, Monday,18 April 2011
Share certificates may not be dematerialised or rematerialised between Monday,
11 April 2011 and Friday,15 April 2011, both dates inclusive.
15 March 2011, Johannesburg
Howard Turner
Independent non-executive chairman
Eugene Beneke
Chief executive officer
Neil Goosen
Group financial director
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
Audited Restated Restated
R000 31 Dec 2010 31 Dec 2009 31 Dec 2008
ASSETS
Non-current assets
Property, plant and equipment 112 420 111 162 108 861
Intangible assets 516 633 503 075 580 703
Deferred taxation 33 446 23 648 19 246
Total non-current assets 662 499 637 885 708 810
Current assets
Inventories 698 320 632 798 800 250
Trade and other receivables 424 863 445 347 519 985
Cash and cash equivalents 401 366 170 926 156 170
Taxation 412 4 545 8 372
Total current assets 1 524 961 1 253 616 1 484 777
Total assets 2 187 460 1 891 501 2 193 587
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 122 122 122
Share based payment reserve - - 40 247
Retained income 1 053 255 1 027 230 984 239
Equity attributable to owners of
the parent 1 053 377 1 027 352 1 024 608
Non controlling interest - - 1 157
Total equity 1 053 377 1 027 352 1 025 765
Non-current liabilities
Long-term borrowings 2 825 5 148 65 981
Total non-current liabilities 2 825 5 148 65 981
Current liabilities
Trade and other payables 858 413 680 150 920 850
Bank overdraft 270 483 174 809 175 868
Short-term borrowings 2 362 4 042 4 234
Taxation - - 889
Total current liabilities 1 131 258 859 001 1 101 841
Total equity and liabilities 2 187 460 1 891 501 2 193 587
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% Audited Audited
R000 Change 31 Dec 2010 31 Dec 2009
Revenue 0,2 3 928 761 3 920 511
Cost of sales 2 855 383 2 855 170
Gross margin 0,8 1 073 378 1 065 341
Administration, selling and
distribution expenses 5,9 996 308 941 105
Operating profit before investment
income (38,0) 77 070 124 236
Investment income 18 086 22 388
Operating profit before finance
charges 95 156 146 624
Finance charges (31 032) (51 114)
Profit before taxation (32,9) 64 124 95 510
Taxation (10 455) (22 050)
Total comprehensive income for
the year (26,9) 53 669 73 460
Attributable to:
Minority shareholders - (1 157)
Owners of the parent (28,1) 53 669 74 617
(26,9) 53 669 73 460
HEADLINE EARNINGS RECONCILIATION
FOR THE YEAR
Attributable to owners of the 53 669 74 617
parent
Adjusted for :
Loss /(profit) on disposal of
property, plant and equipment 326 (743)
Headline earnings for the year (26,9) 53 995 73 874
Number of ordinary shares in issue 138 217 794 138 217 794
Weighted average number of ordinary
shares in issue 138 217 794 138 217 794
Diluted weighted average number of
ordinary shares in issue 138 217 794 138 217 794
Headline earnings per share (cents) (26,8) 39,1 53,4
Earnings per share (cents) (28,1) 38,8 54,0
Diluted headline earnings per share
(cents) (26,9) 39,1 53,4
Diluted earnings per share (cents) (28,1) 38,8 54,0
Dividends to owners of the parent
(cents per share) 20,0 20,0
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
R000 31 Dec 2010 31 Dec 2009
Cash flows from operating activities 210 551 142 875
Operating profit adjusted for non cash items 102 495 131 293
Working capital changes for the year 124 176 35 096
Taxation paid (16 120) (23 514)
Cash flows from investing activities (48 246) (49 269)
Cash flows from financing activities (32 686) (78 334)
Increase in cash and cash equivalent 129 619 15 272
Cash and cash equivalent at beginning of the (3 883) (19 698)
year
Cash and cash equivalent acquired 5 147 543
Cash and cash equivalent at end of the year 130 883 (3 883)
SUPPLEMENTARY INFORMATION
Audited Audited
31 Dec 2010 31 Dec 2009
Net asset value per share (cents) 762,1 743,3
Net tangible asset value per share (cents) 388,3 379,3
Capital expenditure (R000) 39 716 37 845
Purchase of new businesses (R000) 31 794 15 000
Capital commitments (R000)
- approved and contracted 7 438 9 285
- approved not contracted 50 502 23 849
Depreciation (R000) 37 918 36 815
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
R000 31 Dec 2010 31 Dec 2009
Total equity at the beginning of the year 1 027 352 1 025 765
Transactions with owners: - -
Movement in share based payment reserve - (40 247)
Reduction in share based payment reserve - (40 247)
Movement in retained earnings 26 025 41 834
Attributable to owners of the parent 53 669 74 617
Dividend to owners of the parent (27 644) (71 873)
Reduction in share based payment reserve 40 247
Attributable to non controlling interest (1 157)
Total equity at the end of the year 1 053 377 1 027 352
CONDENSED SEGMENT REPORT
Group
Audited
Audited Restated
31 Dec 31 Dec
R000 2010 2009
Revenue 3 928 761 3 920 511
Profit before interest and tax 77 070 124 236
Total assets 2 187 460 1 891 501
Total liabilities 1 134 083 864 149
Capital expenditure 39 716 37 845
Depreciation 37 918 36 815
CONDENSED SEGMENT REPORT (continued)
General Building
Materials
Audited
Audited Restated
31 Dec 31 Dec 2009
R000 2010
Revenue 2 866 202 2 724 018
Profit before interest and tax 106 735 144 666
Total assets 1 373 054 1 117 205
Total liabilities 742 459 558 274
Capital expenditure 18 613 20 003
Depreciation 19 240 15 825
CONDENSED SEGMENT REPORT (continued)
Specialised Building
Materials
Audited
Audited Restated
31 Dec 31 Dec
R000 2010 2009
Revenue 1 062 559 1 196 493
Profit before interest and tax (29 665) (20 430)
Total assets 814 406 774 296
Total liabilities 391 624 305 875
Capital expenditure 21 103 17 842
Depreciation 18 678 20 990
CORPORATE INFORMATION
Iliad or the Group
(Incorporated in the Republic of South Africa)
Registered number 1997/011938/06.
Share code ILA ISIN ZAE000015038.
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* (Resigned January 2011) *non-executive
Group secretary
JLD Mendes
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
www.iliadafrica.co.za
Date: 15/03/2011 11:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
