ILIAD AFRICA LIMITED - CANCELLATION OF S321994 Unaudited Interim Results for the period ended 30 June 2012

Release Date: 28/08/2012 10:41
Code(s): ILA
 
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CANCELLATION OF S321994 Unaudited Interim Results for the period ended 30 June 2012

ILIAD AFRICA LIMITED
Iliad or the Group	
(Incorporated in the Republic of South Africa) 
Registered number   1997/011938/06
Share code ILA 
ISIN ZAE000015038

Unaudited Interim Results for the period ended 30 June 2012

-  Revenue	                      	  Increased 10,0%
-  HEPS movement	               	  Increased 162,5%
-  EBIT before restructuring	   	  Increased 75,9%

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 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 and 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 results
In line with the trading statement issued on 18 July 2012, the Group recorded earnings of
20,1 cents per share for the six months ended 30 June 2012, against a loss of
212,2 cents per share for the comparable 2011 period. The comparable 2011 loss includes once-
off portfolio adjustment costs of R67,9 million and a R249,5 million impairment of intangible assets.
The Group recorded an operating profit of R46,3 million compared to R11,5 million (excluding the
abovementioned portfolio adjustment costs and the impairment of intangible assets) for the
comparable 2011 period.

The impact of the 2011 portfolio adjustment on the result is as follows:

                                      Revenue                         Profitability (EBIT)*
                                   Unaudited   Unaudited              Unaudited       Unaudited
                             %                                  %
Rm                                    30 Jun     30 Jun                  30 Jun         30 Jun
                        Change          2012       2011    Change          2012           2011
                                                            
On-going portfolio       +15,5         2 175      1 883     +44,7          46,3           32,0
Affected operations                                95                                    (20,5)
Total                    +10,0         2 175      1 978    +302,6          46,3           11,5

*EBIT before restructuring costs

Revenue increased by 10,0%, mainly due to a strong performance by the Inland and Coastal
regions of the General Building Materials division. Year-on-year expenses (excluding comparable
2011 period portfolio adjustment costs and intangible asset impairments) have increased by
3,4% reflecting the focus on expense management amongst others, in order to partially negate
costs associated with investing in key strategic initiatives. A marginal decline in the gross margin
percentage reflects the intensely competitive trading environment, as well as an adjustment in
the portfolio mix.

The Group ended the reporting period with net borrowings of R93,3 million, compared to net
borrowings of R54,9 million at 30 June 2011. The increase is mainly due to investment in working
capital to fund growth.

Operational and market review
The past few years have been a challenging period for the building material supply industry. Iliads on-
going focus on cost management and the portfolio adjustment implemented in 2011, has countered
these conditions to some extent.

The residential market industry trends were positive during the period with building plans passed,
showing signs of recovery off a low base.

The non-residential market and market for additions and alterations, while having stabilised, continue
to reflect challenging macro-economic circumstances, illustrated by on-going downtrading in the
finishing end as consumers search for value against constrained disposable income.

Iliads General Building Materials division produced a satisfactory result for the period, with revenue
growth of 11,9%. The Inland regions continued their strong performance trends, while improvements
in the Eastern Cape contributed to enhanced profitability from the Coastal regions.

In the Specialised Building Materials division, improving profitability trends are continuing. The
Ironmongery cluster performed well during the period and losses in the Ceramics business were
reduced, ensuring profitability for the Retail sub-division. In the Wholesale sub-division, good results
from Equipment Hire contributed to improved profitability, despite a disappointing performance from
the Timber Wholesale business.

Strategic Initiatives
The project to integrate the Group's ERP platform is gaining momentum, with seventeen Kerridge
conversions completed in accordance with project timelines.

Iliad is consolidating its General Building Materials brand portfolio. The launch of the monolithic BUCO
brand is progressing according to plan and has been well received by stakeholders.

Prospects
Our industry continues to adjust to new trading conditions and certain key indicators reflect signs of
improvement.

The successful implementation of the portfolio alignment in 2011, stringent performance targets and
effective implementation of various key strategic initiatives, ensure that the Group is well positioned to
continue to capitalise on opportunities as growth gradually returns to the market.

The first eight weeks since 30 June 2012, reflected an increase in revenue of approximately 10,0% on
that of the comparable eight weeks in 2011.

Basis of preparation
Iliad Africa Limited ("Iliad" or the "Company") is a South African registered company. The condensed
interim consolidated financial statements of the Group comprise the Company and its subsidiaries
(together referred to as the "Group").

The condensed financial results included in this announcement have been prepared in accordance
with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS")
and its interpretations issued by the International Accounting Standards Board ("IASB") in issue and
effective for the Group at 30 June 2012 and the AC 500 standards issued by the Accounting Practices
Board or its successor. The results are in terms of IAS 34, Interim Financial Reporting, and comply
with the Listing Requirements of the JSE Limited and the Companies Act 2008, as amended.

The financial statements are prepared in thousands of South African Rands (R000) on the historical
cost basis. The condensed consolidated interim financial statements do not include all the information
and disclosures required in the annual financial statements, and should be read in conjunction with
the Groups annual financial statements as at 31 December 2011.

The Board of directors approved these condensed consolidated financial results on 23 August 2012.
The preparation of the Groups consolidated financial results for the period ended 30 June 2012 was
supervised by the Chief Financial Officer, Chris Booyens CA(SA).

Accounting policy
The accounting policies adopted in the preparation of the condensed consolidated interim
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 2011, 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 Groups accounting policies
and methods of computation, nor have they resulted in a restatement or re-presentation of the
30 June 2011 statement of financial position and related notes.

Audit opinion
These consolidated interim financial statements have not been reviewed or audited by the
Groups auditors.

Board
No changes were made to the Board of directors during the reporting period.

Subsequent events
There have been no material events after the reporting date.

Distribution
In keeping with the Group policy, no dividend was declared for the interim period.
For and on behalf of the Board of directors.

28 August 2012, Johannesburg

Howard Turner	                              Eugene Beneke	                Chris Booyens	
Independent Non-executive Chairman	      Chief Executive Officer	        Chief Financial Officer

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
	                                                            Unaudited    Unaudited	      Audited
R000	                                                                 2012         2011               2011
	                                                               30 Jun       30 Jun	       31 Dec
ASSETS
Non-current assets
Property, plant and equipment	                                      120 004      100 396	      108 660
Intangible assets	                                              265 841      267 103	      267 103
Deferred taxation	                                               39 538	    63 043	       40 760
Total non-current assets	                                      425 383      430 542	      416 523

Current assets
Inventories	                                                      694 481      692 559	      719 634
Trade and other receivables	                                      595 498      532 617	      467 418
Taxation	                                                        6 695	     2 079	        2 009
Cash and cash equivalents	                                      234 437      244 305	      381 059
Assets classified as held for sale	                                    	    21 256	            
Total current assets	                                            1 531 111    1 492 816	    1 570 120
Total assets	                                                    1 956 494    1 923 358	    1 986 643

EQUITY AND LIABILITIES
Equity
Stated capital	                                                          122	       122                122
Retained income	                                                      783 968      732 251	      783 827
Total equity	                                                      784 090      732 373	      783 949

Non-current liabilities 	
Long-term borrowings	                                                3 329        1 766	        2 519
Total non-current liabilities	                                        3 329	     1 766	        2 519

Current liabilities 		
Trade and other payables and provisions	                              840 206	   880 711	      865 784
Short-term borrowings	                                                1 101	     1 894	        1 550
Bank overdraft	                                                      327 768      299 249	      332 841
Liabilities directly associated with assets held for sale	            	     7 365	            
Total current liabilities	                                    1 169 075    1 189 219	    1 200 175
Total equity and liabilities	                                    1 956 494	 1 923 358	    1 986 643

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                    Unaudited 	     Unaudited 	       Audited
R000	                                                     %	         2012	          2011	           2011
                                                   	change	       30 Jun	        30 Jun	         31 Dec

Revenue	                                                  10,0      2 175 214	     1 977 582	      4 229 538
Cost of sales		                                          (1 595 478)	   (1 443 379)	    (3 115 669)
Gross margin	                                           8,5	      579 736	       534 203	      1 113 869
Administration, selling and distribution expenses	   3,4	    (513 186)	     (496 367)	    (1 000 637)
EBITDA before restructuring costs	                  75,9	       66 550	        37 836	        113 232
Restructuring costs		                                            	      (67 918)	       (45 992)
Loss on disposal of components of business 	 	                    	             	        (6 547)
EBITDA	                                                 321,2	       66 550	      (30 082)	         60 693
Depreciation		                                             (19 003)         (26 287)	       (44 352)
Amortisation		                                              (1 262)                	              
Intangible impairment		                                                    (249 530)	      (249 530)
Operating profit/(loss) before investment
income (EBIT)	                                         115,1	       46 285        (305 899)        (233 189)
Investment income 		                                        8 858           12 085           22 767
Operating profit/(loss) before finance charges	         118,8	       55 143	     (293 814)	      (210 422)
Finance charges		                                             (17 290)	      (25 007)	       (36 071)
Profit/(loss) before taxation (EBT)	                 111,9	       37 853	     (318 821)	      (246 493)
Taxation		                                             (10 068)	        25 461	          4 709
Total comprehensive income/(loss) for
the period	                                         109,5	       27 785	     (293 360)	      (241 784)
Attributable to:
Non-controlling interest		                                                                    
Owners of the parent		                                       27 785	     (293 360)	      (241 784)
                                    		                       27 785	     (293 360)	      (241 784)
Basic and diluted earnings/(loss) per share	         109,5	         20,1          (212,2)	        (174,9)
Headline and diluted headline earnings per share	 162,5	         20,0	        (32,0)	            9,5
Number of ordinary shares in issue		                  138 217 794	   138 217 794	    138 217 794
Dividends to owners of the parent (cents per share)		            	             	           20,0
Reconciliation of headline earnings (R000)
Attributable profits/(loss) for the period		               27 785	     (293 360)	      (241 784)
Impairment of goodwill and trademarks		                            	       249 530	        249 530
Profit/(loss) on disposal of plant and equipment
(net of taxation)		                                        (129)	         (414)	            689
Loss on disposal of components of businesses
(net of taxation)		                                            	             	          4 714                                                            	
Headline earnings (R000)			                       27 656         (44 244)           13 149
Ratios		
Gross margin percentage		                                         26,7             27,0	           26,3
Operating margin percentage (EBIT)		                          2,1     	(15,5)	          (5,5)
Effective tax rate		                                         26,6              8,0	          (1,9)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
	                                                            Unaudited	     Unaudited	       Audited
R000	                                                                 2012	          2011	          2011
	                                                               30 Jun	        30 Jun	        31 Dec

Cash flows from operating activities	                             (83 961)	     (120 238)	       (1 728)
Operating profit adjusted for non cash items	                       62 775	      (43 579)	        51 940
Working capital changes for the period	                            (131 387)	      (70 856)	      (49 466)
Taxation paid	                                                     (15 349)	       (5 803)	       (4 202)
Cash flows from investing activities	                             (30 305)	      (36 418)	      (52 175)
Cash flows from financing activities	                             (27 283)	      (29 171)	      (28 762)
Net decrease in cash and cash equivalents for the period	    (141 549)	     (185 827)	      (82 665)
Cash and cash equivalents at beginning of the period	               48 218	       130 883	       130 883
Cash and cash equivalents at end of the period	                     (93 331)	      (54 944)	        48 218

SUPPLEMENTARY INFORMATION
	                                                 Unaudited	 Unaudited	  Audited
	                                                      2012	      2011           2011
	                                                    30 Jun	    30 Jun	   31 Dec

Net asset value per share (cents)	                     567,3	     529,9	    567,2
Net tangible asset value per share (cents)	             375,0	     336,6	    373,9
Capital expenditure (R000)	                            30 774	    16 520	   47 590
Purchase of new businesses (R000)	                         	    21 182	   22 710
Proceeds on disposal of business assets (R000)	                 	         	   13 300
Capital commitments (R000)	
 approved and contracted	                             1 582	     3 950	   10 836
 approved not contracted	                            18 292	    12 751	   37 284
Depreciation (R000)	                                    19 003	    26 287	   44 352

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	                                                 Unaudited	 Unaudited	  Audited
R000	                                                      2012            2011   	     2011
	                                                    30 Jun  	    30 Jun         31 Dec

Total equity at the beginning of the period	           783 949	 1 053 377      1 053 377
Movement in retained income	                               141	 (321 004)	(269 428)
Attributable income/(loss) for the period	            27 785	 (293 360)	(241 784)
Dividends to owners of the parent	                  (27 644)	  (27 644)	 (27 644)
	                                                   784 090	   732 373	  783 949

CONDENSED CONSOLIDATED SEGMENTAL RESULTS
                                                                 Group                                   General Building Materials                               Specialised Building Materials
	                                      Unaudited	     Unaudited 	        Audited       Unaudited        Unaudited	          Audited	     Unaudited        Unaudited	           Audited
R000 	                                    30 Jun 2012	   30 Jun 2011	    31 Dec 2011	    30 Jun 2012	     30 Jun 2011	      31 Dec 2011	   30 Jun 2012 	    30 Jun 2011	       31 Dec 2011
Revenue 	                              2 175 214	     1 977 582	      4 229 538	      1 678 168	       1 500 130	        3 226 192	       497 046	        477 452	         1 003 346	
EBITDA before restructuring costs	         66 550	        37 836	        113 232	         54 960	          42 378	          113 165	        11 590	        (4 542)	                67
Restructuring costs	                              	      (67 918)	       (52 539)	             	        (22 581)	         (24 581)	            	       (45 337)	          (27 958)	
EBITDA	                                         66 550	      (30 082)	         60 693	         54 960	          19 797	           88 584	        11 590	       (49 879)	          (27 891)	
Total assets*	                              1 956 494	     1 923 358	      1 986 643	      1 175 300	       1 153 766	        1 203 475	       781 194	        769 592	           783 168	
Total liabilities*	                      1 172 404	     1 190 985	      1 202 694	        499 647	         536 388	          532 877	       672 757	        654 597	           669 817
Capital expenditure	                         30 774	        16 520	         47 590	         18 576	           8 716	           28 461	        12 198	          7 804	            19 129
*Unaudited 30 June 2011 recompiled.

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 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* A 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

Website	                www.iliadafrica.co.za



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