| Mon 7 Mar 2005, 14:09 | | RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 |
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Iliad Africa Limited - Audited Results For The Year Ended 31 December 2004
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code ILA
ISIN ZAE000015038
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
Strong cash flow
- HEPS 28% up
- Dividend 26% up
NATURE OF BUSINESS
Iliad Africa Limited (`Iliad` or `the Group`) 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 seventh successive year of growth in earnings. Since listing,
the Group has generated an increase in headline earnings per share at an annual
compounded growth rate in excess of 28%.
When making direct comparisons with the prior year, one needs to bear in mind
that the acquisition of the Corpbuild businesses were only accounted for from 19
September 2003.
Had the acquisition of the Corpbuild businesses been in place from January 2003,
turnover for this period would have shown a 16% growth, including an average
inflation level of around 4%. Inflationary trends for locally produced products
are definitely on the increase.
Headline earnings per share of 97,4 cents were 27% higher than the corresponding
period last year.
The Group finished the year with cash and cash equivalents of R 226 million, an
increase of R 156 million during the year.
Trading profit, as a percentage of turnover, increased to 8,5% reflecting the
benefits derived from economies of scale and purchasing power as a result of the
larger group.
The effective tax rate increased to 28,5% (2003:27,2%) due mainly to the effects
of Secondary Tax on Companies.
Earnings for the period increased 104% to R 135,5 million (2003:R 66,5 million.
THE MARKET PLACE
Quantitative and qualitative indicators show that the building upswing is broad
based and has gained full momentum. Confidence levels which broke into positive
territory (above 50%), as measured by the Bureau for Economic Research (BER)
amongst participants in the industry, are now sitting firmly above the 90% mark
in the residential sector.
Supply bottlenecks are being experienced, contractors are being hampered by a
skills shortage and developers are complaining of delays in obtaining municipal
approvals.
Indications are that the level of activity in the residential market is peaking.
The rental market has slowed down and luxury housing investment has peaked but
there is still some room for growth left in the middle income housing market.
Entry level housing is languishing at the bottom of the growth curve but
prospects are positive.
We reiterate that we do not subscribe to the housing bubble theory, but we do
believe that the residential market will start to show signs of slowing in 2005.
The non-residential market has shown growth which appears to be sustainable for
the next couple of years. This should offset the residential slowdown to a great
extent.
OPERATIONAL REVIEW
The Group`s solid operating results reflect the strong demand patterns in the
market place.
Building materials, boards, ironmongery and ceramics all performed admirably
from a profit and working capital perspective.
The wholesale division underperformed as a result of the time it has taken to
effect internal changes.
The post year-end acquisition of Cachet International, subject to Competition
Commission approval, provides the division with access to imported product
ranges on an exclusive basis. This will provide the impetus for divisional
growth in 2005.
In line with the Group`s stated strategic intent, a number of acquisitions were
made in the last quarter of the period under review. These acquired operations
made no material contribution to Group profits. D&A Timbers in KZN was
successfully integrated producing results above expectations.
The building materials and boards divisions both acquired cash-strapped under-
performing businesses in East London and Port Elizabeth, respectfully. On the
back of the Group`s purchasing power, both acquisitions will produce solid
results in 2005.
The wholesale division purchased the assets and liabilities of SDT, a hinge and
draw slide supplier to the kitchen manufacturers and cabinet making sectors. The
business operated under severe cash flow constraints and is expected to produce
a strong performance in 2005.
The Group made its first move into the plumbing market segment via the
acquisition of Suncol. This is a focused business serving the needs of the
insurance industry.
PROSPECTS
Trading activity in the new year has started on a very positive note. The market
remains buoyant and the number of strategic opportunities being pursued makes
for a positive outlook for the Group in the foreseeable future.
ACCOUNTING POLICIES
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice on a basis consistent with those applied
in the annual financial statements for the year ended 31 December 2003.
AUDIT REPORT
The results for the year have been audited by Grant Thornton, and their
unqualified audit report on the 31 December 2004 annual financial statements and
the abridged financial statements contained herein, are available for inspection
at the company`s registered office.
DIVIDEND
In line with the Group`s policy of a four times cover, the dividend has been
increased by 26% to 24 cents per share (2003:19 cents).
Last date to trade `cum dividend` Wednesday, 23 March 2005
Trading commences `ex-dividend` Thursday, 24 March 2005
Record date Friday, 1 April 2005
Payment date Monday, 4 April 2005
Share certificates may not be dematerialised or rematerialised between Thursday,
24 March 2005 and Friday, 1 April 2005, both dates inclusive.
For and on behalf of the Board of Directors
3 March 2005
Ralph Patmore Chief Executive Officer Neil Goosen Financial Director
BALANCE SHEET
Audited Audited
R000s 31 Dec 2004 31 Dec 2003
ASSETS
Property, plant and equipment 41 645 42 318
Intangible assets 69 342 66 144
Deferred taxation 9 406 9 158
Total non-current assets 120 393 117 620
Inventories 359 271 325 039
Trade and other receivables 250 648 209 646
Cash and bank balances 225 895 69 990
Total current assets 835 814 604 675
Total assets 956 207 722 295
EQUITY AND LIABILITIES
Stated capital 222 429 220 585
Retained income 274 270 165 742
Total shareholders` equity 496 699 386 327
Long-term liabilities 2 210 992
Total non-current liabilities 2 210 992
Trade and other payables 417 915 316 375
Short-term liabilities 1 472 2 575
Taxation 37 911 16 026
Total current liabilities 457 298 334 976
Total equity and liabilities 956 207 722 295
ABRIDGED INCOME STATEMENT
% Audited Audited
R000s change 31 Dec 2004 31 Dec 2003
Turnover 90 2 168 337 1 140 019
Trading profit 100 185 382 92 740
Net interest income (costs) 4 041 (1 508)
Profit before taxation 189 423 91 232
Taxation 53 891 24 680
Earnings for the year 104 135 532 66 552
Headline earnings reconciliation
Earnings for the year 135 532 66 552
Adjusted for: 2 795 1 021
Amortisation of goodwill 3 366 1 173
Profit on disposal of property,
plant and equipment (571) (152)
Headline earnings for the year 105 138 327 67 573
Number of ordinary shares in issue
(including 7 358 879 treasury shares) 150 737 519 147 200 000
Weighted average number of ordinary
shares in issue 141 995 454 88 478 042
Headline earnings per share (cents)27 97,4 76,4
Earnings per share (cents) 26 95,4 75,2
Diluted headline earnings
per share (cents) 33 95,2 71,7
Diluted earnings per share (cents) 32 93,3 70,5
Dividend per share (cents) 26 24,0 19,0
ABRIDGED CASH FLOW STATEMENT
Audited Audited
R000s 31 Dec 2004 31 Dec 2003
Cash flows from operating activities 189 158 83 465
Operating profit before
working capital changes 208 346 100 676
Working capital changes for the year 39 524 1 154
Taxation paid (31 708) (10 200)
Dividends paid (27 004) (8 165)
Cash flows from investment activities (24 490) (266 051)
Cash flows from financing activities (8 593) 204 154
Increase in cash and cash equivalents 156 075 21 568
Cash and cash equivalents at beginning
of the year 69 990 21 129
Cash and cash equivalents acquired (disposed) (170) 27 293
Cash and cash equivalents at end of the year 225 895 69 990
SUPPLEMENTARY INFORMATION
Audited Audited
31 Dec 2004 31 Dec 2003
Net tangible asset value per share (cents) 298,1 229,0
Capital expenditure (R000`s) 10 984 13 147
Purchase of new businesses (R000`s) 20 454 258 130
Capital commitments (R000`s)
- new aquisitions 29 000
- approved and contracted 12 500 8 000
- approved not contracted 6 300 7 900
Depreciation (R000`s) 16 129 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
3 613 000 options exercised and
shares allotted and issued 2 307 2 307
Issue of shares in terms of
odd lot offer 40 40
Share issue expenses (30) (30)
Repurchase and cancellation of
shares in terms of odd lot offer (473) (473)
Earnings for the year 135 532 135 532
Dividends paid (27 004) (27 004)
Balance at 31 December 2004 222 429 274 270 496 699
Ferreirs buildware, Rietpan hardware, BM builders market, Lowveld building
supplies, Benoni builders supplies, Rustenburg building material, F & F building
supplies, D & A timbers, Ferreiras decor world, Just tiles, The tile depot,
Citiwood, B & B locksmoth distributors, B & B distributors, SDT, W & B hardware,
Building centre, Keylok, Buchel, DH design hardware, The Knob & Knocker,
Bildware, 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
Date: 07/03/2005 02:01:04 PM
Produced by the JSE SENS Department
