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ILA - Iliad Africa Limited - Audited Condensed Consolidated Financial Results
for the year ended 31 December 2011
Iliad Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/011938/06)
Share code: ILA & ISIN: ZAE000015038
("Iliad" or "the Group")
Audited Condensed Consolidated Financial Results for the year ended 31
December 2011
NATURE OF BUSINESS
Iliad Africa Limited, listed on the JSE in 1998, focuses on sourcing,
distributing, wholesaling and retailing general and specialised building
materials. The Group operates through two focused divisions leveraging common
pools of expertise, enabling each division to focus on its core market.
General Building Materials (GBM) markets a comprehensive range of products,
primarily sourced locally. Specialised Building Materials (SBM) trades in
differentiated or value-added products. A range of customers, from large-
scale development and construction groups to do-it-yourself homeowners are
serviced country-wide from an established base of 93 stores.
FINANCIAL REVIEW
In line with the trading statement issued on 28 February 2012, the Group
recorded an earnings loss of 174,9 cents per share for the year ended 31
December 2011, compared to earnings of 38,8 cents per share for the same 2010
period. This loss includes once-off restructuring costs of R52,5 million and
a R249,5 million impairment of intangible assets, mainly relating to the
Campwell Hardware and Thorpe Timber businesses. Excluding these once-off
portfolio rationalisation and impairment charges, the Group recorded an
EBITDA of R113,2 million for the year ended 31 December 2011, compared to
R115,0 million for the 2010 period and the relevant EBITDA improved by 20,2%
on the second half of the 2010 period.
The impact of the portfolio adjustment on the results is as follows:
Revenue Profitability (EBITDA)*
Rm % 31 Dec 31 Dec % 31 Dec 31 Dec
Change 2011 2010 Change 2011 2010
Future portfolio 10,4 4 070 3 688 0,8 157 156
Affected operations (33,6) 160 241 7,3 (44) (41)
Total 7,7 4 230 3 929 (1,5) 113 115
*EBITDA before restructuring costs.
Group revenue increased by 7,7%, mainly due to a strong performance by the
Inland regions of the GBM division. The Group delivered comparable growth for
the second half of the year, of 10,5%. The rest of the Group reflects the
continued subdued trading environment, marginal recovery in building plans
passed and the protracted slowdown in the finishing end of the industry.
Year-on-year expenses (excluding once-off portfolio adjustment costs and
intangible asset impairments, including depreciation) have increased by 4,9%,
reflecting the focus on expense management in order to partially negate costs
associated with investing in key strategic initiatives.
A decline in the gross margin percentage reflects the intensely competitive
trading environment, as well as an adjustment in the portfolio mix.
The Group finished with net cash and cash equivalents of R48,2 million,
compared to cash of R130,9 million at the end of 2010. The reduction is
mainly due to the investment in working capital and once-off costs associated
with the restructuring costs.
OPERATIONAL AND MARKET REVIEW
The past three years have been a challenging period for the building material
supply industry. Iliad`s ongoing focus on procurement and improving cost
structures has countered these conditions to some extent.
Against this background and as part of our portfolio review to maintain the
strategic balance of the Group`s national footprint, a number of branches
were rationalised during the year and the assets of the specialised Q-Lite
Lighting and SDT Wholesale Hinges businesses were sold by the end of
September 2011.
Iliad`s GBM division produced a mixed performance under these circumstances.
The Inland subdivision recorded satisfying results, with a double-digit
increase in revenue and improved bottom-line results (excluding once-off
restructuring costs). Results from the Coastal subdivision were more subdued
but profitable.
In the SBM division, the downtrading trend in the finishing end continued
during the year. This negatively affected the performance of the Retail
subdivision in particular, although the Ironmongery cluster delivered a
satisfactory performance and annual losses in the Ceramics business were
reduced. In the Wholesaling subdivision, a notable result came from Equipment
Hire, while the Timber Wholesale business continued to incur losses.
PROSPECTS
This industry is adjusting to new trading conditions after the unsustainable
levels of 2004 to 2008. The infrastructural efficiencies implemented during
the year, stringent performance targets, realignment of the portfolio and
implementation of various key strategic initiatives ensure the Group is well
positioned to capitalise on opportunities as growth gradually returns to the
market.
The first ten weeks since financial year-end reflected an increase in revenue
of approximately 9% on that of the comparable ten weeks of 2011.
CHANGES TO THE BOARD
The following changes in the directorate occurred during the year under
review:
- Ms M Sibisi resigned as a director on 3 January 2011
- Mr NP Goosen resigned as a director on 30 June 2011
- Mr CP Booyens was appointed as an executive director and Chief
Financial Officer of the Group on 1 November 2011
- Prof F Abrahams and Ms A Kalyan were both appointed as independent
non-executive directors on 19 December 2011.
BASIS OF PREPARATION
The condensed consolidated financial results included in this announcement
have been prepared in accordance with the measurement and recognition
criteria of International Financial Reporting Standards ("IFRS") and its
interpretations issued by the International Accounting Standards Board in
issue and effective for the Group at 31 December 2011, the AC 500 standards
issued by the Accounting Practices Board or its successor. The results are
presented in terms of IAS 34, Interim Financial Reporting, and comply with
the Listing Requirements of the JSE Limited and the Companies Act 2008. The
board of directors approved these condensed consolidated financial statements
on 22 March 2012.
The preparation of the Group`s consolidated financial results for the year
ended 31 December 2011 was supervised by the Chief Financial Officer: Chris
Booyens CA(SA).
ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the condensed
consolidated annual financial statements are in terms of IFRS and are
consistent with those applied in the Group annual financial statements for
the year ended 31 December 2010, except for the adoption of new or revised
accounting standards and interpretations, that became applicable during the
current reporting period. None of these have had a significant impact on the
Group`s accounting policies and methods of computation, nor have they
resulted in a restatement or re-presentation of the 31 December 2010
statement of financial position and related notes.
EVENTS AFTER THE REPORTING DATE
There have been no material events after the reporting period.
AUDIT OPINION
The Group`s external auditors, Deloitte & Touche, have issued their
unmodified opinion on the Group annual financial statements for the year
ended 31 December 2011. The audit was conducted in accordance with
International Standards on Auditing. These summarised condensed consolidated
financial statements have been derived from the Group annual financial
statements and are consistent in all material respects with the Group annual
financial statements. A copy of their opinion is available for inspection at
the registered offices of Iliad Africa Limited.
Any reference to future financial performance included in this announcement,
has neither been reviewed nor is it reported on by the Company`s external
auditors.
DIVIDEND TO OWNERS OF THE PARENT
In view of the strong statement of financial position the Group has declared
a final dividend of 20 cents per share (2010: 20 cents per share) for the 12
month period ended 31 December 2011.
Set out below are the salient dates applicable to the dividend:
Last date to trade "cum dividend" Friday, 13 April, 2012
Trading commences "ex dividend" Monday, 16 April 2012
Record date Friday, 20 April 2012
Payment date Monday, 23 April 2012
Share certificates may not be dematerialised or rematerialised between
Monday, 16 April 2012 and Friday, 20 April 2012, both dates inclusive.
For and on behalf of the Board of directors.
27 March 2012, Johannesburg
Howard Turner
Independent Non-executive Chairman
Eugene Beneke
Chief Executive Officer
Chris Booyens
Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
R000 2011 2010
ASSETS
Non-current assets
Property, plant and equipment 108 660 112 420
Intangible assets 267 103 516 633
Deferred taxation 40 760 33 446
Total non-current assets 416 523 662 499
Current assets
Inventories 719 634 698 320
Trade and other receivables 467 418 424 863
Cash and cash equivalents 381 059 401 366
Taxation 2 009 412
Total current assets 1 570 120 1 524 961
Total assets 1 986 643 2 187 460
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 122 122
Retained income 783 827 1 053 255
Equity attributable to owners of the parent 783 949 1 053 377
Non-controlling interest - -
Total equity 783 949 1 053 377
Non-current liabilities
Long-term borrowings 2 519 2 825
Total non-current liabilities 2 519 2 825
Current liabilities
Trade and other payables 865 784 858 413
Bank overdraft 332 841 270 483
Short-term borrowings 1 550 2 362
Total current liabilities 1 200 175 1 131 258
Total equity and liabilities 1 986 643 2 187 460
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
R000 2011 2010
Revenue 4 229 538 3 928 761
Cost of sales 3 115 669 2 855 383
Gross margin 1 113 869 1 073 378
Administration, selling and distribution
expenses 1 000 637 958 390
EBITDA before restructuring costs 113 232 114 988
Loss on disposal of business assets 6 547 -
Restructuring costs 45 992 -
EBITDA 60 693 114 988
Depreciation 44 352 37 918
Impairments of intangibles 249 530 -
Operating (loss)/profit before investment
income (EBIT) (233 189) 77 070
Investment income 22 767 18 086
Operating (loss)/profit before finance charges (210 422) 95 156
Finance charges (36 071) (31 032)
(Loss)/profit before taxation (246 493) 64 124
Taxation 4 709 (10 455)
Total comprehensive (loss)/income for the year (241 784) 53 669
Attributable to:
Non-controlling interest - -
Owners of the parent (241 784) 53 669
(241 784) 53 669
HEADLINE EARNINGS RECONCILIATION
Attributable to owners of the parent (241 784) 53 669
Adjusted for:
Impairments of intangibles 249 530 -
Loss on disposal of components of businesses
(net of tax) 4 714 -
Loss on disposal of property, plant and
equipment (net of tax) 689 326
Headline earnings for the year 13 149 53 995
Number of ordinary shares in issue 138 217 794 138 217 794
Basic and diluted (loss)/earnings per
share (cents) (174,9) 38,8
Headline earnings per share (cents) 9,5 39,1
Dividends to owners of the parent
(cents per share) 20,0 20,0
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
R000 2011 2010
Cash flows from operating activities (1 728) 210 551
Operating profit adjusted for non cash items 51 940 102 495
Working capital changes for the year (49 466) 124 176
Taxation paid (4 202) (16 120)
Cash flows from investing activities (52 175) (48 246)
Cash flows from financing activities (28 762) (32 686)
(Decrease)/increase in cash and cash
equivalents (82 665) 129 619
Cash and cash equivalents at beginning of
the year 130 883 (3 883)
Cash and cash equivalents acquired - 5 147
Cash and cash equivalents at end of the year 48 218 130 883
SUPPLEMENTARY INFORMATION
Audited Audited
2011 2010
Net asset value per share (cents) 567,2 762,1
Net tangible asset value per share (cents) 373,9 388,3
Capital expenditure (R000) 47 590 39 716
Purchase of new businesses (R000) 22 710 11 982
Proceeds on disposal of business assets (R000) 13 300 -
Capital commitments (R000)
- approved and contracted 10 836 7 438
- approved not contracted 37 284 50 502
Depreciation (R000) 44 352 37 918
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
R000 2011 2010
Total equity at the beginning of the year 1 053 377 1 027 352
Movement in retained income (269 428) 26 025
Attributable to owners of the parent (241 784) 53 669
Dividends to owners of the parent (27 644) (27 644)
783 949 1 053 377
CONDENSED CONSOLIDATED SEGMENT REPORT
Group
Audited Audited
R000 2011 2010
Revenue 4 229 538 3 928 761
EBITDA before restructuring 113 232 114 988
Loss on disposal of business assets 6 547 -
Restructuring costs 45 992 -
EBITDA 60 693 114 988
Depreciation 44 352 37 918
Impairments of intangibles 249 530 -
EBIT (233 189) 77 070
Total assets 1 986 643 2 187 460
Total liabilities 1 202 694 1 134 083
Capital expenditure 47 590 39 716
CONDENSED CONSOLIDATED SEGMENT REPORT (continued)
General Building
Materials
Audited Audited
R000 2011 2010
Revenue 3 226 192 2 866 202
EBITDA before restructuring 113 165 125 908
Loss on disposal of business assets - -
Restructuring costs 24 581 -
EBITDA 88 584 125 908
Depreciation 20 054 19 173
Impairments of intangibles 164 627 -
EBIT (96 097) 106 735
Total assets 1 203 475 1 373 054
Total liabilities 532 877 742 459
Capital expenditure 28 461 18 613
CONDENSED CONSOLIDATED SEGMENT REPORT (continued)
Specialised Building
Materials
Audited Audited
R000 2011 2010
Revenue 1 003 346 1 062 559
EBITDA before restructuring 67 (10 920)
Loss on disposal of business assets 6 547 -
Restructuring costs 21 411 -
EBITDA (27 891) (10 920)
Depreciation 24 298 18 745
Impairments of intangibles 84 903 -
EBIT (137 092) (29 665)
Total assets 783 168 814 406
Total liabilities 669 817 391 624
Capital expenditure 19 129 21 103
CORPORATE INFORMATION
Iliad or the Group (Incorporated in the Republic of South
Africa) Registered number 1997/011938/06.
Share code ILA ISIN ZAE000015038.
Registered address Iliad House Block 7 Thornhill Office
Park 94 Bekker Road Midrand
Postnet Suite 566 P/Bag x 29 Gallo Manor
2052
Directors HC Turner (Chairman)*
E Beneke (Chief Executive Officer)
CP Booyens (Chief Financial Officer)
T Njikizana* RT Ririe* Prof F Abrahams*
S Kalyan*
*Non-executive
Group Secretary SC O`Connor
Transfer secretaries Link Market Services South Africa
(Pty) Limited 13th Floor Rennie House
19 Ameshoff Street Braamfontein 2001
PO Box 4844 Johannesburg 2000
Sponsor Bridge Capital Advisors (Pty) Ltd 27
Fricker Road Second Floor Illovo 2196
PO Box 651010 Benmore 2010
www.iliadafrica.co.za
Date: 27/03/2012 10:00:01 Supplied by www.sharenet.co.za
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