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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%
- EBITDA 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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