| Tue 10 Aug 2004, 9:39 | | Results for the six months ended 30 June 2004 |
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Iliad Africa Limited - Unaudited results for the six months ended 30 June 2004
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code ILA ISIN code ZAE000015038
Unaudited results for the 6 months ended 30 June 2004
Heps 25% up
The Group is pleased to announce its interim results for the six months ended 30
June 2004.
NATURE OF BUSINESS
Iliad Africa (`Iliad`) focuses on the sourcing, distributing and retailing of
ceramic tiles and sanitary ware, 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.
FINANCIAL HIGHLIGHTS
The Group posted a thirteenth successive six-month period of growth in earnings.
The first half of last year does not include the Corpbuild businesses which were
only incorporated from 19 September 2003. This needs to be borne in mind when
making a direct comparison with the prior year.
Headline earnings of 38,1 cents per share were 25% higher than the corresponding
period last year, while earnings per share increased by 22% for the period under
review.
Had the acquisition been in place from January 2003, turnover for this period
would have shown a 13% growth including an inflation element of around 3%. The
inflationary trend in locally supplied goods is definitely upward and gaining
momentum.
The company recorded a 165% rise in profit before taxation, which culminated in
earnings of R52,5 million (2003: R20,7 million). The effective tax rate was 32%
due to the effects of STC.
Trading profit as a percentage to turnover is slightly lower at 7,6% (2003: 8%).
The softening ratio is due to the amortisation of goodwill and the
reconstruction of the wholesale division as was reported at the end of 2003.
This division has honed its internal systems but the sourcing of product from
overseas principals has taken longer than anticipated. This division remains our
largest profit growth opportunity for 2005.
OPERATIONAL REVIEW
Our strong operating results in the first half are reflective of rising consumer
confidence and the underlying strength in the residential housing market.
Having fully settled and intergrated the Corpbuild acquisition, the group
acquired the KwaZulu-Natal based building materials retailer, D&A Timbers. This
acquisition is still subject to Competition Commission approval and the effect
of the acquisition has not been included in the financial statements. This is in
line with our stated strategic intent for the building materials division of
geographically gaining representation along the coastline from KwaZulu-Natal to
Cape Town. The building materials division now comprises 24 outlets.
Capacity constraints appearing in the supply chain are becoming evident,
particularly as regards timber supplies.
For the first time in seven years, the company`s operations have been cash
generative during their first six months of trading, which in the past was
traditionally a period of nett outflow. Cash and cash equivalents increased by
R5,6 million for the period, compared to a decrease of R13,6 million for the
same period last year. The increase in cash was primarily due to improvements in
working capital management.
PROSPECTS
With the successful integration of the Corpbuild acquisition, the group has re-
commenced its geographic roll-out of new outlets and is identifying and
concluding acquisitions in line with our stated strategy. We remain focused on
value-adding opportunities and will not deviate outside of our core
competencies.
The group is in a position where it can deploy cash generated by its operations
to fund future acquisitions and organic growth.
As stated before we do not subscribe to the housing bubble theory. The market
remains buoyant, a trend we expect to continue to 2005, although at a slower
rate of growth. The commercial market appears to have bottomed out and should
begin an upward trend from next year. This should offset any slowdown in the
residential market.
DIVIDENDS
In line with Group policy, no interim dividend has been declared.
The results comply with the South African Statements of Generally Accepted
Accounting Practice, and are consistent with accounting policies applied for the
year ended 31 December 2003.
For and on behalf of the Board
5 August 2004
Ralph Patmore Chief Executive Officer
Neil Goosen Financial Director
BALANCE SHEET
Unaudited Unaudited Audited
R000s 30 June 2004 30 June 2003 31 Dec 2003
ASSETS
Property, plant and equipment 38 837 19 372 42 318
Financial assets 1 996
Intangible assets 64 461 3 994 66 144
Deferred taxation 8 357 10 882 9 158
Total non-current assets 111 655 36 244 117 620
Inventories 318 754 140 310 325 039
Trade and other receivables 286 633 108 692 209 646
Cash and bank balances 75 588 7 495 69 990
Total current assets 680 975 256 497 604 675
Total assets 792 630 292 741 722 295
EQUITY AND LIABILITIES
Stated capital 221 612 16 868 220 585
Retained income 191 191 119 921 165 742
Total shareholders equity 412 803 136 789 386 327
Long-term borrowings 613 1 547 992
Total non-current liabilities 613 1 547 992
Trade and other payables 357 612 149 352 316 375
Short-term borrowings 2 527 2 298 2 575
Taxation 19 075 2 755 16 026
Total current liabilities 379 214 154 405 334 976
Total equity and liabilities 792 630 292 741 722 295
ABRIDGED INCOME STATEMENT
Unaudited Unaudited % Audited
R000s 30 June 2004 30 June 2003 change 31 Dec 2003
Turnover 993 930 379 157 162% 1 140 019
Trading profit 76 150 30 553 149% 92 740
Net interest received
paid) 751 (1 502) (1 508)
Profit before taxation 76 901 29 051 165% 91 232
Taxation 24 448 8 320 24 680
Earnings for the period 52 453 20 731 153% 66 552
Number of ordinary shares
in issue (including 7 358 879
treasury
shares) 149 404 519 75 402 000 147 200 000
Weighted average
number of ordinary
shares in issue 141 088 279 67 976 621 88 478 042
Headline earnings
per share (cents) 38,1 30,5 25% 76,4
Earnings per share (cents) 37,2 30,5 22% 75,2
Diluted headline earnings
per share (cents) 37,0 28,2 31% 71,7
Diluted earnings per
share (cents) 36,1 28,2 28% 70,5
Dividend per share (cents) 19,0
Headline earnings reconciliation
Earnings for the period 52 453 20 731 66 552
Exceptional items 1 266 1 021
Amortisation of goodwill 1 683 1 173
Profit on disposal of
property, plant and
equipment (417) (152)
Headline earnings for
the period 53 719 20 731 159% 67 573
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
R000s 30 June 2004 30 June 2003 31 Dec 2003
Cash flows from operating
activities 8 735 (3 540) 83 465
Operating profit before working
capital changes 85 802 31 956 100 676
Working capital changes for
the period (29 465) (18 496) 1 154
Taxation paid (20 598) (8 835) (10 200)
Dividends paid (27 004) (8 165) (8 165)
Cash flows from investment
activities (3 737) (10 810) (266 051)
Cash flows from financing activities 600 716 204 154
Increase/(Decrease) in cash and
cash equivalents 5 598 (13 634) 21 568
Cash and cash equivalents at
beginning of the period 69 990 21 129 21 129
Cash and cash equivalents acquired 27 293
Cash and cash equivalents at end
of the period 75 588 7 495 69 990
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
R000s 30 June 2004 30 June 2003 31 Dec 2003
Net tangible asset value per
share (cents) 245,2 195,2 229,0
Capital expenditure (R000s) 4 922 8 021 13 147
Purchase of new businesses (R000s) 258 130
Capital commitments (R000s)
- approved and contracted 6 331 600 8 000
- approved not contracted 6 500 1 200 7 900
Depreciation (R000s) 7 635 2 757 8 423
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Stated Retained
R000s capital income Total
Balance at 1 January 2004 220 585 165 742 386 327
2 280 000 options exercised
and shares allotted and issued 1 460 1 460
Issue of shares in terms of
odd lot offer 40 40
Repurchase and cancellation of
Shares in terms of odd lot offer (473) (473)
Earnings for the period 52 453 52 453
Dividends paid (27 004) (27 004)
Balance at 30 June 2004 221 612 191 191 412 803
Ferreira`s Buildware
Rietpan Hardware & Building Supplies
Builders Market
Lowveld Building Supplies
Benoni Builders Supplies
Rustenburg Building Material
F & F Building Supplies
The Knob & Knocker
B&B Distributors
B&B Locksmith Distributors
Keylock Supplies
Ferreiras Decor World
Just Tiles
The Tile Depot
Citiwood
Building Centre
W&B Hardware
Buchel
Design Hardware
Bildware
Conways
Saflok
Registered address First Floor East Block Pineslopes Office Park
c/o The Straight & Witkoppen Road Lonehill PO Box 2572 Honeydew 2040
Directors G Psillos (Chairman)* RB Patmore (Chief Executive Officer) NP
Goosen RT Ririe* HC Turner* *Non-executive
Transfer secretaries Ultra Registrars (Pty) Limited 11 Diagonal Street
Johannesburg 2001 PO Box 4844 Johannesburg 2000
Sponsors Bridge Capital Services (Pty) Ltd First Floor Building 22A
The Woodlands Office Park Woodlands Drive Woodmead
PO Box 651010 Benmore 2010
