| Mon 12 Mar 2007, 12:22 | | ILA - Iliad - Press Release - Iliad Africa Records |
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ILA
ILA
ILA - Iliad - Press Release - Iliad Africa Records Strong Growth
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA & ISIN: ZAE000015038
("Iliad" or "the company")
Iliad Africa records strong growth
Iliad Africa Ltd, the listed supplier of general and specialised building
materials, has posted its ninth successive year of earnings growth for the 12
months to 31 December 2006. In line with expectations, earnings per share rose
24% above 2005 to 138,3 cents. Turnover increased by 25% to R3,4 billion while
earnings increased 25,5% to R202 million. The operating margin was stable at
8,3%. The directors note that working capital remained tightly managed, with the
working capital to sales ratio dropping to 6,7% (2005 7,9%).
Given the cash flows from operating activities, the potential expansion and the
strength of its balance sheet, Iliad`s directors have declared a 25% increase
in its distribution to shareholders to 40 cents per share.
Iliad focuses on sourcing, distributing, wholesaling and retailing general and
specialised building materials. A range of customers from large-scale
contractors and developers to do-it-yourself home owners are serviced through
104 stores.
Chief executive officer Ralph Patmore says, "Following several years of strong
organic and acquisitive growth, we have restructured the group into two focused
divisions - general building materials and specialised building materials - to
fully leverage procurement opportunities, common pools of expertise and improve
logistical efficiencies in our importing activities."
Patmore believes Iliad`s solid operating results reflect its unfolding strategic
thrust, smooth integration of recent acquisitions and continued demand in the
marketplace.
The general buildings materials division recorded strong growth in sales and
operating profits. The R165-million Campwell Hardware acquisition was finalised,
although Patmore notes that to coincide with the completion of the conditions
precedent, these results were only consolidated into group results from December
2006.
The organic roll out of the Building Centre (cash-and-carry) stores gained
momentum with six outlets opened during the year.
The specialised building materials division had a mixed year with the
ironmongery and plumbing clusters producing solid profit growth and a
restructured wholesale cluster returning to profitability. The ceramic and
boards clusters continued to experience relatively flat results due to a
deflationary environment and a slow release of commercial contracts
respectively. The newly acquired lighting cluster, QLite, exceeded its warranted
profit target.
Commenting on the trading environment, Patmore says, "The middle-income market
remains the driving force in the residential sector and continues to impress
given its underlying strength and resilience. The overall growth rate in the new
residential housing market continued to slow. Activity levels at the luxury end
were below the prior year while those in the lower end of the market continue to
rise, albeit slowly given pedestrian growth in state-subsidised housing. The
additions, refurbishment and alterations sector is showing growth which is
normal as the pace of new residential activity tapers off."
Patmore says the commercial market continued its steady growth pattern from
2005, to a large extent offsetting slowing growth in the residential market .
"Inflationary pressures in the marketplace are beginning to be felt and this
could be the single most significant factor that caps the industry`s growth.
While the overall inflation figure was around 8%, we experienced inflation in
some areas of closer to 14%. This was offset by deflation in product lines
imported from eastern countries. Supply problems, particularly cement, are also
constraining growth, although the loss of turnover due to shortages is difficult
to quantify. "
Commenting on prospects, Patmore says, "Iliad enters 2007 on a sound footing and
is well positioned to continue delivering improved results. We believe Iliad`s
continued growth will be driven by ongoing geographic expansion in both
divisions, growth in the wholesale cluster from a solid new base, rolling out
cash-and-carry outlets in both divisions and efficiency improvements in the
specialised building material division."
Ends
Date: 12/03/2007 12:22:54 Produced by the JSE SENS Department.
