| Mon 15 Aug 2005, 12:10 | | Iliad - Media Release - Strong interim results |
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Iliad - Media Release - Strong interim results to 30 June 2005
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code ILA ISIN ZAE000015038
MEDIA RELEASE
15 August 2005
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Iliad Africa Limited
Strong interim results to 30 June 2005
Iliad Africa Limited, the JSE-listed building materials supplier, has posted an
eighth successive period of half-year growth in earnings for the six months to
30 June 2005. Prior-year results have been restated for the transition to
International Financial Reporting Standards (IFRS), which were adopted with
effect 1 January 2005.
In line with consensus expectations, results for the period showed a 24%
increase in earnings per share to 42,9 cents against the comparable period in
2004. Turnover increased by 22% to R1,2 billion and the operating margin
improved to 7,3% (2004: 7,1%).
Ralph Patmore, chief executive officer of Iliad Africa, says, `Cash flow was
well managed during the period, finishing with cash and cash equivalents of over
R128 million. The working capital to sales ratio dropped below 10% for the first
time for a half-year reporting period.`
Patmore says the major outflows over and above an increased dividend in 2004 and
higher tax payments for H12005 were the acquisition of businesses (R54 million)
and the share buyback programme (R44 million). `The share buyback programme,
concluded mostly at a price of around R9,80 per share, saw Iliad buy back 2,9%
of the total issued shares, reflecting the board`s confidence in the group`s
prospects.`
Through acquisitions, Iliad has added some 9% to turnover during the period, in
line with its strategy of expanding its geographical presence and increasing
market share. Patmore notes, `Iliad has recently completed acquisitions in its
plumbing, wholesale and boards divisions, respectively Suncol, Cachet
International and SDT, and Timland. Initial results have exceeded expectations
and the full impact will become apparent in FY2006.`
All acquisitions have been internally funded to date. Patmore says, `Several
additional acquisitive opportunities are under investigation, which will also be
funded from internal resources. The impact of acquisitions on group turnover in
FY2006 will be over R200 million.`
Commenting on Iliad`s trading environment, Patmore notes that the residential
housing market is slowing, evidenced by a flat market at the luxury end.
`Qualitative and quantitative indicators show that the middle-income market is
moving towards an affordability test point at the end of calendar 2005 and
growth in mortgage advances is projected to slow into 2006. Industry forecasters
project a 6% decline in real volume for 2006 in the total residential market,
while the commercial market has bottomed and is projected to increase by some
10% in that year. This should offset the slowdown in the residential market to a
large extent - a trend Iliad is well placed to capitalise on.`
Patmore says Iliad`s solid operating results reflect its unfolding strategic
thrust, acquisitive activity and continued demand in the marketplace.
`Building materials, boards and ceramics (cumulatively 85% of turnover and 92%
of profit before interest and tax) showed significant growth against the
comparable period in 2004, underpinned by increased market share through
acquisitions and growth in store numbers.
`The exceptional results of the boards and ceramics divisions clearly
demonstrate their ability to capitalise on growth in the commercial market.`
The ironmongery division, which was downsized following the sale of the non-core
Conways businesses at the end of FY2004, produced an acceptable return in a
slowing luxury market.
Following regulatory approval of the Cachet International acquisition, Patmore
says the wholesale division is consolidating operations in regional warehouses
in Durban and Johannesburg. `The Cachet International acquisition has provided
access to a quality imported product range using wholly-owned Iliad moulds. This
division now has an appropriate product range, and the right people and
facilities in place. Cost structures have been addressed and the division is
geared for profitable growth in FY2006.`
Iliad`s new plumbing division, a complementary activity established with the
regulatory approval of the acquisition of Suncol, contributed only two months`
performance to the trading period but exceeded expectations, according to
Patmore. `The benefits of expanding by rolling out two additional stores into
this sector, primarily serving the needs of the insurance industry, are expected
to unfold in 2006.`
Commenting on prospects, Patmore says, `Iliad enters the second half of FY2005
on a sound footing: the wholesale division has been optimally structured for
sustainable growth and additional acquisitive growth is nearing finalisation.
The roll out of Iliad`s cash & carry strategy through its building materials
division began in July 2005 and a similar model is being developed for the
ceramics division. The benefits of capitalising on Iliad`s core competencies and
existing cost base are expected to emerge in the next financial year.
`With its broad reach across the building materials supply sector, and strong,
fruitful relationships with its empowerment partners (Women Private Equity Fund
and Vunani Capital Holdings), Iliad is well positioned to capitalise on emerging
trends in the property market and continue to deliver improved results.`
Ends
PREPARED ON BEHALF OF ILIAD AFRICA BY CATHY FINDLEY PUBLIC RELATIONS ON
(011) 463-6372
OR EMAIL CATHY@FINDLEYPR.CO.ZA
OR CELL 082 9006477
Editor`s note: Iliad has annual turnover of some R2.2 billion, and trades
through five divisions that focus on the sourcing, distribution and retailing of
a comprehensive range of building and related materials. Iliad has a well-
established geographic footprint and strong regional brands. Its major
shareholder is Rand Merchant Bank. Iliad`s economic empowerment shareholding has
been independently verified at over 26%.
Date: 15/08/2005 12:01:03 PM
Produced by the JSE SENS Department
