| Tue 10 Sep 2002, 0:00 | | Iliad Africa Limited - Unaudited Results For The S |
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Iliad Africa Limited - Unaudited results for the six months ended 30
June 2002
Turnover up 27% Earnings up 74% HEPS up 127%
COMMENTS
The Group is pleased to announce its interim results for the period
ended 30 June 2002.
NATURE OF BUSINESS
Iliad Africa focuses on the sourcing, distributing and retailing of
ceramic tiles and sanitaryware, bathroom fittings, hardware, building
materials, ironmongery, finished wood products and related accessories.
A range of customers, from large-scale companies and developers, to do-
it-yourself homeowners are serviced through a number of branded stores
each concentrating their efforts into an identified customer-focused
market niche.
Iliad Africa maintains a 60% residential customer base, with the balance
commercial. The company is a well-established supplier in its niche
markets and geographic locations.
Proven trading skills and the owner-manager philosophy at operational
level have been positive contributors to the company`s overall success
in the local building materials market.
TRADING ENVIRONMENT & OPERATIONAL REVIEW
All four operating divisions, namely General Building Materials, Ceramic
Tiles, Boards and Ironmongery, have performed exceptionally well.
Stronger growth in the residential starts, additions and renovations
market more than offset the 4% decline in the commercial building
market. Iliad Africa maintained its volumes in this market at the
expense of competitors. The build-up in sales continued within all
divisions throughout July and August this year. Should the official
interest rate remain within the current range, it is anticipated that
trading will continue at similar levels.
During this review period, the company purchased the assets of G&M
Building Supplies. Based in Lyttleton, this hardware supplier represents
the first move of the Building Materials division into the Pretoria
region. The business leans towards the cash-based retail end of the
market, but also sells goods on credit to mid-sized contractors.
Operating as Ferreira`s Buildware Express, the business benefits from
the company`s household brand name, purchasing skills, retail know-how,
IT systems and bulk buying power. Management is confident that through
the introduction of the full range of building products as well as a
delivery service the operation will double in size. Ferreira`s Buildware
Honeydew functions as the supply warehouse and logistics support to the
store, which will allow this footprint to grow into a stand-alone store
within a short time.
The upgrade of Ferreira`s Dcor World Northriding was completed in
August with a further
R1 million invested on showroom display and bathroom furniture, a market
that presents strong growth.
FINANCIAL HIGHLIGHTS
Turnover for continuing operations increased by 29% to R337,4 million
(2001: R262,5 million), of which 14% can be attributed to a combination
of market share and market size growth while 15% is as a result of
inflationary increases.
Trading profit margins improved to 7% (2001: 5%) due to stable gross
margins, as well as a
controlled expense base and a R1,6 million foreign exchange profit. In
the 2001 Annual Report management indicated that close to 50% of the
reported R4 million forex loss would be recovered
in this trading period.
The year-on-year working capital-to-sales ratio improved by 2%
demonstrating the strong operational management disciplines.
Improved cash flows resulted in borrowings declining from R22,4 million
as at the end of
June 2001 to R10 million at the end of the review period despite the
repurchase of 7 million shares at an average price of R1,08 each. Cash
flow, cyclical in nature, peaks towards year-end. Management is
confident that Iliad Africa will report substantially stronger cash and
cash equivalent levels in December, placing the company in a much
stronger position to fund future expansion.
Operating in a mature, predictable industry, store additions will be
funded from internal resources, allowing the company to accelerate its
top-line growth in tandem with the improved trading results generated by
the revamping of its larger destination stores.
For the fifth year in succession, the company posted increased earnings.
In 2002 earnings rose to R16,7 million (2001: R9,6 million). This
represents a 127% increase in headline earnings per share of 24,1 cents
(2001: 10,6 cents) on an 8% decline in the weighted average number of
shares in issue of 69 424 188 (2001: 75 490 880).
PROSPECTS
Iliad Africa has achieved the target buy-back level of 10% of shares in
issue that are to be held for future use and not cancelled. With retail
consumer spending improving, and a positive cash flow the company has re-
embarked on an acquisitive growth strategy. However, management is
mindful of keeping the company`s gearing below 30%.
DIVIDENDS
In line with the Group`s policy, no interim dividend has been declared.
The interim results comply with South African Statements of Generally
Accepted Accounting Practice and are consistent with accounting policies
applied for the year ended 31 December 2001.
On behalf of the Board
Ralph Patmore Neil Goosen
Chief Executive Officer Financial Director
10 September 2002
ABRIDGED BALANCE SHEET
Unaudited Unaudited Audited
R000s 30 June 2002 30 June 2001 31 Dec 2001
ASSETS
Non-current assets
Tangible assets 13 445 12 361 13 643
Financial assets 3 423 4 973 3 622
Deferred taxation 14 171 13 981 14 972
Current assets 223 973 194 986 195 303
Total assets 255 012 226 301 227 540
EQUITIES AND LIABILITIES
Capital and reserves 98 835 80 510 96 568
Interest-bearing non-current
liabilities 897 956 1 048
Interest-bearing current
liabilities 11 034 31 812 4 966
Non interest-bearing
current liabilities 144 246 113 023 124 958
Total equity and liabilities 255 012 226 301 227 540
ABRIDGED INCOME STATEMENT
Unaudited Unaudited % Audited
R000s 30 June 2002 30 June 2001 change 31 Dec 2001
Turnover 337 416 264 052 27 593 757
Continuing operations 337 416 262 488 29 592 193
Terminated operations 1 564 1 564
Trading profit 24 025 12 714 33 473
Continuing operations 24 025 15 112 59 36 594
Terminated operations (2 398) (3 121)
Capital item - see below 1 599 1 592
Financing charges (net) 1 744 1 911 4 465
Profit before taxation 22 281 12 402 30 600
Taxation 5 570 2 784 4 911
Earnings for the period 16 711 9 618 74 25 689
Number of ordinary shares in issue
(including 7 358 879
treasury shares) 73 820 000 74 658 982 74 658 982
Weighted average number of
ordinary shares in issue 69 424 188 75 490 880 74 582 728
Headline earnings per
share (cents) 24,1 10,6 127 32,3
Earnings per share (cents) 24,1 12,7 90 34,4
Diluted headline earnings
per share (cents) 22,6 10,4 31,0
Diluted earnings per
share (cents) 22,6 12,5 33,0
Dividend per share (cents) 9,0
Headline earnings reconciliation
Earnings for the year 16 711 9 618 25 689
Capital item
Profit on sale of steel
forming assets -
United Steel & Pipe Supplies
(Pty) Limited (1 599) (1 592)
Headline earnings 16 711 8 019 108 24 097
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
R000s 30 June 2002 30 June 2001 1 Dec 2001
Cash flows from operating
activities (279) 539 25 481
Cash utilised in investment
activities (2 334) (2 321) (4 206)
Cash effect on financing activities (8 446) (4 748) (4 357)
Increase/(decrease) in cash
and cash equivalent (11 059) (6 530) 16 918
Cash and cash equivalent at
beginning of period 1 025 (15 893) (15 893)
Cash and cash equivalent
at end of period (10 034) (22 423) 1 025
SUPPLEMENTARY INFORMATION
R000s 30 June 2002 30 June 2001 31 Dec 2001
Tangible net asset value
per share (cents) 133,9 107,8 129,3
Capital expenditure (R000s) 2 725 2 336 6 065
Capital commitments (R000s)
- approved and contracted 2 125 1 606 500
- approved not contracted 834 558 4 000
Contingent liabilities (R000s) 7 205 5 403 6 404
Depreciation (R000s) 2 427 2 053 4 338
STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY
for the period ended 30 June 2002
Stated Retained
R000s capital income Total
Balance at 1 January 2002 23 742 72 826 96 568
Shares re-acquired per Special Resolution
and cancelled (891) (891)
Treasury shares acquired (6 915) (6 915)
Earnings for the period 16 711 16 711
Dividend paid (6 638) (6 638)
To shareholders (5 976) (5 976)
To subsidiary company (662) (662)
Balance at 30 June 2002 15 936 82 899 98 835
Registered address First Floor East Block Pineslopes Shopping Centre
& Office Park c/o The Straight & Witkoppen Road Lonehill PO Box 2572
Honeydew 2040
Transfer secretaries Ultra Registrars (Pty) Limited 11 Diagonal Street
Johannesburg 2001 PO Box 4844 Johannesburg 2000
(Incorporated in the Republic of South Africa) (Registration number
1997/011938/06) Share code ILA ISIN code ZAE000015038
Citiwood
Rietpan Hardware & Building Supplies
Ferreira`s Buildware
Ferreira`s Decor World
The Tile Depot
Just Tiles
The Knob & Knocker
Date: 10/09/2002 12:00:00 PM Produced by the JSE SENS Department
