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Audited Consolidated Financial Results for the year ended 31 December 2012
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
Registered number 1997/011938/06
Share code ILA
ISIN ZAE000015038
Audited Consolidated Financial Results for the year ended 31 December 2012
- Revenue up 6,2%
- HEPS movement up 387,4%
- EBITDA before restructuring up 29,4%
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 92 stores.
FINANCIAL REVIEW
In line with the trading statement issued on 22 February 2013, the Group recorded earnings of
24,3 cents per share for the year ended 31 December 2012, compared to a loss of 174,9 cents
per share for the same 2011 period. Earnings include once-off restructuring costs of Rnil (2011:
R52,5 million) and a R30,4 million (2011: R249,5 million) impairment of intangible assets, relating
to the Thorpe Timber and National Tile Traders businesses. Excluding these once-off portfolio
rationalisation and impairment charges, the Group recorded an EBITDA of R146,5 million for the year
ended 31 December 2012, compared to R113,2 million for the 2011 period, a significant improvement.
The impact of the Thorpe Timber Wholesale portfolio adjustment (refer events after the reporting
date) on the results is as follows:
Revenue Profitability (EBITDA)*
% 31 December 31 December % 31 December 31 December
Rm change 2012 2011 change 2012 2011
Future Portfolio 5,9 4 298 4 056 30,2 160 123
Affected operations 12,8 195 173 (40,4) (14) (10)
Total 6,2 4 493 4 230 29,4 146 113
*EBITDA before restructuring costs.
Group revenue increased by 6,2%, mainly due to a strong performance by the GBM division. 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 6,2%, reflecting the focus on expense
management in order to partially negate costs associated with investing in key strategic initiatives.
An improvement in the gross margin percentage reflects the benefits of our procurement initiatives,
as well as an adjustment in the portfolio mix.
The Group finished the year with net borrowings of R76,9 million, compared to cash of R48,2 million
at the end of 2011. The reduction is mainly due to the investment in working capital, once-off costs
associated with the implementation of our key strategic projects and an increase in the tax paid.
OPERATIONAL AND MARKET REVIEW
The past few years have been a challenging period for the building material supply industry. Iliad's
ongoing focus on procurement and improving cost structures have countered these conditions to
some extent.
Iliad's GBM division produced a mixed performance under these circumstances. The Inland
subdivision recorded satisfying results, with a 7,1% increase in revenue and improved bottom-line
results. 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. Despite
this, the Retail subdivision returned to profitability, with the Ironmongery cluster delivering a
satisfactory performance and annual losses in the Ceramics business were again reduced. An
improved result by the Wholesaling subdivision, includes a notable result from Equipment Hire and
the Boards businesses, while the Timber Wholesale business continued to incur losses.
Against this background and as part of our portfolio review to maintain the strategic balance of the
Group's national footprint, the decision has been made to sell our Timber Wholesale business, as
we continue to refine the Group.
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.
CHANGES TO THE BOARD
Mr Andile Sangqu was appointed as Independent Non-executive Director effective 1 March 2013.
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 2012, the SAICA Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council. 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 14 March 2013.
The preparation of the Group's consolidated financial results for the year ended 31 December 2012
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 2012, 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 2011 statement of financial position and related notes.
EVENTS AFTER THE REPORTING DATE
At the Board meeting the disposal of the assets and liabilities of the Timber Wholesale business
was approved. Disposal agreements are to be finalised in due course and regulatory approval is
required.
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 2012. The audit was conducted
in accordance with International Standards on Auditing. These 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 Group's external auditors.
DIVIDEND TO OWNERS OF THE PARENT
The Group has declared a final dividend of 20 cents per share (2011: 20 cents per share) for the
12 month period ended 31 December 2012.
The dividend is payable from income reserves. Iliad utilised 20 cents per share secondary tax on
companies credits to cover the South African dividend tax (DT) rate of 15% on shareholders not
exempt. The net amount payable to all shareholders who are not exempt from DT is 20 cents per
share while the gross amount payable to those shareholders who are exempt from DT is 20 cents
per share. The issued share capital at the declaration date is 138 217 794 ordinary shares. Iliad
Africa Limited's tax reference number is 9269/002/71/4.
Set out below are the salient dates applicable to the dividend:
Last date to trade "cum dividend" Friday, 12 April 2013
Trading commences "ex dividend" Monday, 15 April 2013
Record date Friday, 19 April 2013
Payment date Monday, 22 April 2013
Share certificates may not be dematerialised or rematerialised between Monday, 15 April 2013
and Friday, 19 April 2013, both dates inclusive.
For and on behalf of the Board of directors.
14 March 2013
Johannesburg
Howard Turner Eugene Beneke Chris Booyens
Independent Non-executive Chairman Chief Executive Officer Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
R'000 2012 2011
Assets
Non-current assets
Property, plant and equipment 134 158 108 660
Intangible assets 234 161 267 103
Deferred taxation 43 933 40 760
Total non-current assets 412 252 416 523
Current assets
Inventories 694 452 719 634
Trade and other receivables 461 581 467 418
Taxation 15 866 2 009
Cash and cash equivalents 212 958 381 059
Assets classified as held-for-sale 72 711
Total current assets 1 457 568 1 570 120
Total assets 1 869 820 1 986 643
EQUITY AND LIABILITIES
Equity
Ordinary share capital 122 122
Retained income 789 826 783 827
Equity attributable to owners of the parent 789 948 783 949
Non-controlling interest
Total equity 789 948 783 949
Non-current liabilities
Long-term borrowings 3 971 2 519
Total non-current liabilities 3 971 2 519
Current liabilities
Trade and other payables 757 355 865 784
Bank overdraft 289 875 332 841
Short-term borrowings 1 503 1 550
Liabilities classified as held-for-sale 27 168
Total current liabilities 1 075 901 1 200 175
Total equity and liabilities 1 869 820 1 986 643
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
R'000 2012 2011
Revenue 4 493 085 4 229 538
Cost of sales 3 283 864 3 115 669
Gross margin 1 209 221 1 113 869
Administration, selling and distribution expenses 1 062 727 1 000 637
EBITDA before restructuring costs 146 494 113 232
Loss on disposal of business assets 6 547
Restructuring costs 45 992
EBITDA 146 494 60 693
Depreciation 38 618 44 352
Amortisation of intangibles 2 523
Intangible impairment 30 419 249 530
Operating profit/(loss) before investment income (EBIT) 74 934 (233 189)
Investment income 18 591 22 767
Operating profit/(loss) before finance charges 93 525 (210 422)
Finance charges (29 919) (36 071)
Profit/(loss) before taxation 63 606 (246 493)
Taxation (29 963) 4 709
Profit/(loss) for the year 33 643 (241 784)
Other comprehensive income for the year
Total comprehensive income/(loss) for the year 33 643 (241 784)
Attributable to:
Non-controlling interest
Owners of the parent 33 643 (241 784)
33 643 (241 784)
HEADLINE EARNINGS RECONCILIATION
Attributable to owners of the parent 33 643 (241 784)
Adjusted for:
Impairments of intangibles 30 419 249 530
Loss on disposal of components of businesses (net of tax) 4 714
(Profit)/loss on disposal of property, plant and equipment (net of tax) (103) 689
Headline earnings for the year 63 959 13 149
Number of ordinary shares in issue at year end 138 217 794 138 217 794
Basic and diluted earnings/(loss) per share (cents) 24,3 (174,9)
Headline earnings per share (cents) 46,3 9,5
Dividends to owners of the parent (cents per share) 20,0 20,0
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
R'000 2012 2011
Cash flows from operating activities (30 334) (1 728)
Operating profit adjusted for non cash items 137 994 51 940
Working capital changes during the year (121 336) (49 466)
Taxation paid (46 992) (4 202)
Cash flows from investing activities (68 562) (52 175)
Cash flows from financing activities (26 239) (28 762)
Net decrease in cash and cash equivalents for the year (125 135) (82 665)
Cash and cash equivalents at the beginning of the year 48 218 130 883
Cash and cash equivalents at end of the year (76 917) 48 218
SUPPLEMENTARY INFORMATION
Audited Audited
2012 2011
Net asset value per share (cents) 571,5 567,2
Net tangible asset value per share (cents) 402,1 373,9
Capital expenditure (R'000) 71 242 47 590
Purchase of new businesses (R'000) 22 710
Proceeds on disposal of business assets (R'000) 13 300
Capital commitments (R'000)
approved and contracted 4 477 10 036
approved not contracted 48 028 37 284
Depreciation 38 618 44 352
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
R'000 2012 2011
Total equity at the beginning of the year 783 949 1 053 377
Movement in retained income/(loss) 5 999 (269 428)
Attributable to owners of the parent 33 643 (241 784)
Dividends to owners of the parent (27 644) (27 644)
789 948 783 949
CONDENSED CONSOLIDATED SEGMENT REPORT
Group General Building Materials Specialised Building Materials
Audited Audited Audited Audited Audited Audited
R'000 2012 2011 2012 2011 2012 2011
Revenue 4 493 085 4 229 538 3 454 283 3 226 192 1 038 802 1 003 346
EBITDA before restructuring 146 494 113 232 116 351 113 165 30 143 67
Loss on disposal of business assets 6 547 6 547
Restructuring costs 45 992 24 581 21 411
EBITDA 146 494 60 693 116 351 88 584 30 143 (27 891)
Depreciation and amortisation 41 141 44 352 22 050 20 054 19 091 24 298
Impairments 30 419 249 530 164 627 30 419 84 903
EBIT 74 934 (233 189) 94 301 (96 097) (19 368) (137 092)
Total assets* 1 869 820 1 986 643 1 080 926 1 203 475 788 894 783 168
Total liabilities* 1 079 872 1 202 694 640 269 765 543 439 603 437 151
Capital expenditure 71 242 47 590 45 757 28 461 25 485 19 129
* Recompiled due to the portfolio adjustments during the current and prior financial year.
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* AH Sangqu*
*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) Limited 27 Fricker Road Second Floor Illovo 2196
PO Box 651010 Benmore 2010
www.iliadafrica.co.za
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