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Unaudited Interim Results for the six months ended 30 June 2014
ILIAD AFRICA LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1997/011938/06.
Share code ILA ISIN ZAE000015038.
Unaudited Interim Results for the six months ended 30 June 2014
Up EPS increase to 30,3 cents
Up HEPS increase to 30,0 cents
Up Revenue from
comparable stores up 4,6%
Up Period-on-period
improvement in cash R59m
and cash equivalents
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 72 stores.
Financial Review
In line with the trading statement issued on 29 July 2014, the group recorded earnings per share
(EPS) of 30,3 cents per share for the six months ended 30 June 2014, compared to a loss of
39.0 cents per share for the same 2013 period. Headline earnings per share as at 30 June 2014
are 30,0 cents in comparison with 0,4 cents in the prior year. During the period under review, an
additional 1,8% of issued shares were acquired by the Group. The total held as treasury shares
is now 3,0% of issued shares. As per the trading update the improvement in earnings reflects the
continuing benefits of the Group's portfolio adjustments made in 2013.
The Group recorded EBITDA on the comparable stores of R78,2 million for the period ended
30 June 2014, compared to R77,7 million for the 2013 period.
The impact of the 2013 portfolio adjustments on the results are as follows:
Revenue Profitability (EBITDA)*
% 30 June 30 June % 30 June 30 June
change 2014 (Rm) 2013 (Rm) change 2014 (Rm) 2013 (Rm)
Comparable stores 4,6 2 111 2 019 0,7 78 78
Affected portfolio - - 166 - - (27)
Total (3,3) 2 111 2 185 53,7 78 51
*EBITDA before portfolio adjustments
Following various portfolio adjustments in 2013 the total Group revenue declined by 3,3%.
Comparable store Group revenue increased by 4,6%, which reflects the continued subdued
trading environment and marginal recovery in building plans passed. Despite a challenging
trading environment, an improvement in the gross margin percentage has been achieved.
Year-on-year expenses (excluding prior year once-off portfolio adjustment costs and depreciation)
have decreased by 4,4%, reflecting the focus on expense management and the impact of
the 2013 disposals. This partially negates the costs associated with investing in key strategic
initiatives.
The Group finished with net overdraft of R68,2 million, compared to net overdraft of R127,1
million for the comparable period of 2013. The net movement is mainly due to disposal proceeds
received, the investment in working capital, the acquisition of treasury shares and taxation
payments as the Group returns to profitability.
Operational and Market Review
The past few years have been a challenging period for the building material supply industry
against a background of low GDP growth and increasing inflation. Iliad's ongoing focus on
procurement efficiency, improving cost structures and the implementation of various portfolio
adjustments, has countered these conditions to some extent.
Iliad's GBM division produced a mixed performance under these circumstances. The Inland
subdivision recorded enhanced results compared to 2013, with a 4,9% increase in revenue and
a gross margin percentage recovery contributing to improved bottom-line results. The Coastal
subdivision results were more subdued but profitable. The GBM division will continue to identify
opportunities to leverage the BUCO brand.
In the SBM division, the comparable stores reported commendable revenue growth, with
all business clusters contributing to a satisfactory result. The benefits of the various portfolio
adjustments in 2013 have contributed considerably to the turnaround profit performance of this
division.
Prospects
It is expected that the macro economy will continue to be impacted by increasing interest rates,
slow GDP growth and increasing consumer inflation. Whilst the industry continues to adjust to
evolving trading conditions, the market remains very competitive. The infrastructural efficiencies
implemented during the period, stringent performance targets, realignment of the portfolio in 2013
and the 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
There was no changes to the Board for the period under review.
Basis of preparation
The condensed consolidated interim financial results included in this announcement have been
prepared in accordance with the measurement and recognition criteria of International Financial
Reporting Standards ("IFRS"), (IAS 34) Interim Financial Reporting, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as
issued by the Financial Reporting Standards Council and the requirements of the JSE Limited
and the Companies Act of South Africa. 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 Group's annual financial statements as at 31 December 2013.
The Board of Directors approved these condensed consolidated financial statements on 21 August 2014.
The preparation of the Group's consolidated interim financial results for the period ended 30 June
2014 was supervised by the Chief Financial Officer: Chris Booyens CA (SA).
Accounting Policies
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 2013, 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 2013 statement of financial position and related notes.
Events after the reporting date
There have been no material events after the reporting date.
Audit Opinion
These consolidated Interim financial statements have not been reviewed or audited by the Group's
external auditors.
Dividend to owners of the Parent
In keeping with the Group policy, no dividend was declared for the Interim period.
For and on behalf of the Board of Directors.
21 August 2014, Johannesburg
Andile Sangqu Eugene Beneke Chris Booyens
Independent Non-executive Chairman Chief Executive Officer Chief Financial Officer
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
June June December
R'000 2014 2013 2013
Assets
Non-current assets
Property, plant and equipment 140 945 130 358 140 309
Intangible assets 232 241 233 521 232 881
Long-term receivable 5 270 5 573 6 074
Deferred taxation 52 559 60 041 48 849
Total non-current assets 431 015 429 493 428 113
Current assets
Inventories 593 264 520 222 609 246
Trade and other receivables 581 453 552 675 459 817
Taxation – 6 214 –
Cash and cash equivalents 48 716 208 149 48 515
Short-term portion of long-term receivable 6 043 1 227 22 131
Assets classified as held-for-sale – 129 410 –
Total current assets 1 229 476 1 417 897 1 139 709
Total assets 1 660 491 1 847 390 1 567 822
EQUITY AND LIABILITIES
Equity
Stated capital 122 122 122
Retained income 742 689 708 257 746 621
Total equity 742 811 708 379 746 743
Non-current liabilities
Long-term borrowings 5 962 6 088 5 592
Total non-current liabilities 5 962 6 088 5 592
Current Liabilities
Trade and other payables and provisions 784 531 761 881 801 890
Bank overdraft 116 875 335 263 9 732
Taxation 8 359 – 1 341
Short-term borrowings 1 953 1 552 2 524
Liabilities directly associated with assets held-for-sale – 34 227 –
Total current liabilities 911 718 1 132 923 815 487
Total equity and liabilities 1 660 491 1 847 390 1 567 822
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
June June December
R'000 2014 2013 2013
Revenue 2 111 327 2 184 494 4 464 056
Cost of sales (1 523 997) (1 601 198) (3 272 662)
Gross margin 587 330 583 296 1 191 394
Administration, selling and distribution expenses (509 139) (532 417) (1 042 179)
EBITDA before restructuring costs 78 191 50 879 149 215
Loss on disposal of business assets – (5 986) (15 197)
Fair value adjustment on available-for-sale assets – (70 232) (70 232)
Restructuring costs – (14 699) (14 699)
EBITDA 78 191 (40 038) 49 087
Depreciation (18 866) (21 233) (40 900)
Amortisation (640) (640) (1 280)
Operating profit /(loss) before investment income (EBIT) 58 685 (61 911) 6 907
Investment income 3 375 8 403 16 335
Operating profit/(loss) before finance charges 62 060 (53 508) 23 242
Finance charges (8 887) (16 525) (30 752)
Profit/(loss) before taxation 53 173 (70 033) (7 510)
Taxation (12 108) 16 108 919
Total comprehensive income/(loss) for the period 41 065 (53 925) (6 591)
Attributable to:
Non-controlling interest – – –
Owners of the parent 41 065 (53 925) (6 591)
41 065 (53 925) (6 591)
Number of ordinary shares in issue 138 217 794 138 217 794 138 217 794
Number of ordinary shares in issue (excl treasury shares) 134 071 260 138 217 794 136 612 229
Weighted number of ordinary shares in issue 135 312 085 138 217 794 138 140 011
Basic and diluted earnings/(loss) per share (cents) 30,3 (39,0) (4,8)
Basic and diluted headline earnings per share (cents) 30,0 0,4 40,0
Dividend per share (cents) – – 20,0
Reconciliation OF Headline Earnings
Attributable profit/(loss) for the period 41 065 (53 925) (6 591)
Adjusted for: (465) 54 538 61 891
Loss on disposal of business assets (net of tax) – 4 310 10 942
Fair value adjustment on available-for-sale assets (net of tax) – 50 567 50 567
(Profit)/loss on disposal of property, plant and equipment (net of tax) (465) (339) 382
Headline earnings for the period (000) 40 600 613 55 300
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
June June December
R'000 2014 2013 2013
Cash flows from operating activities (58 889) 2 128 140 039
Operating profit adjusted for non-cash items 69 983 42 188 135 183
Working capital changes during the period (117 311) (49 713) (8 355)
Taxation (paid)/refund (11 561) 9 653 13 211
Cash flows from investing activities (702) (26 847) 14 316
Cash flows from financing activities (47 351) (25 478) (38 655)
Net (increase)/decrease in cash and cash equivalents for
the period (106 942) (50 197) 115 700
Cash and cash equivalents at the beginning of the period 38 783 (76 917) (76 917)
Cash and cash equivalents at end of the period (68 159) (127 114) 38 783
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
June June December
R'000 2014 2013 2013
Net asset value per share (cents) 554,0 512,5 546,6
Net tangible asset value per share (cents) 380,8 343,6 376,1
Proceeds on disposal of business assets (R'000) 18 154 100 63 880
Capital commitments (R'000)
– approved and contracted 4 350 4 976 691
– approved not contracted 35 099 25 607 59 180
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
June June December
R'000 2014 2013 2013
Total equity at the beginning of the period 746 743 789 948 789 948
Movement in retained income/(loss) (3 932) (81 569) (43 205)
Attributable to owners of the parent 41 065 (53 925) (6 591)
Treasury shares (18 183) – (8 970)
Dividends to owners of the parent (26 814) (27 644) (27 644)
Total equity at the end of the period 742 811 708 379 746 743
SUMMARISED CONSOLIDATED SEGMENT REPORT
Group General Building Materials Specialised Building Materials
Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited
June June December June June December June June December
R'000 2014 2013 2013 2014 2013 2013 2014 2013 2013
Revenue 2 111 327 2 184 494 4 464 056 1 707 386 1 677 190 3 540 396 403 941 507 304 923 660
EBITDA before restructuring 78 191 50 879 149 215 45 483 42 107 106 214 32 708 8 772 43 001
Loss on disposal of business assets – (5 986) (15 197) – – – – (5 986) (15 197)
Fair value adjustment on available-for-sale assets – (70 232) (70 232) – – – – (70 232) (70 232)
Restructuring costs – (14 699) (14 699) – (14 699) (14 699) – – –
EBITDA 78 191 (40 038) 49 087 45 483 27 408 91 515 32 708 (67 446) (42 428)
Depreciation (18 866) (21 233) (40 900) (14 001) (13 255) (27 400) (4 865) (7 978) (13 500)
Amortisation (640) (640) (1 280) – – – (640) (640) (1 280)
EBIT 58 685 (61 911) 6 907 31 482 14 153 64 115 27 203 (76 064) (57 208)
Total assets 1 660 491 1 847 390 1 567 822 1 011 284 1 132 673 1 003 012 649 207 714 717 564 810
Total liabilities 917 680 1 139 010 821 079 551 718 706 184 515 611 365 962 432 826 305 468
Capital expenditure 20 428 21 922 54 074 7 939 10 684 37 194 12 489 11 238 16 880
CORPORATE INFORMATION
Registered address Iliad House Block 7 Thornhill Office Park 94 Bekker Road Midrand
Postnet Suite 566 P/Bag x 29 Gallo Manor 2052
Directors A Sangqu (Chairman)* E Beneke (Chief Executive Officer) CP Booyens (Chief
Financial Officer) Prof F Abrahams* A Kalyan* T Njikizana* RT Ririe*
*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
Auditors Deloitte & Touche
www.iliadafrica.co.za
Date: 26/08/2014 09:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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