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ILIAD AFRICA LIMITED - Unaudited Interim Results for the period ended 30 June 2015

Release Date: 25/08/2015 10:00
Code(s): ILA     PDF:  
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Unaudited Interim Results for the period ended 30 June 2015

ILIAD AFRICA LIMITED
(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 2015

- Operating profit                R59,2 m       (2014: R58,7 m)
- Earnings per share              31,8 cents    (2014: 30,3 cents)
- Headline earnings per share     31,4 cents    (2014: 30,0 cents)
- Period-on-period improvement 
  in cash and cash equivalents    R97,4 m

Headline earnings per share (cents)
2015 - 31,4
2014 - 30,0  
2013 - 0,4
2012 - 20,0

NATURE OF BUSINESS
Iliad Africa Limited, listed on the JSE in 1998, focuses on sourcing,
retailing and redistributing 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 70 stores.

FINANCIAL REVIEW
In line with the trading statement issued on 29 July 2015, the Group 
recorded earnings of 31,8 cents per share for the six months ended 
30 June 2015, compared to earnings of 30,3 cents per share for the 
comparable 2014 period. Headline earnings per share as at 30 June 2015 was 
31,4 cents in comparison with 30,0 cents in the prior year. The Group 
recorded an EBIT of R59,2 million for the 6 months to June 2015, 
compared to R58,7 million for the 2014 period.

The Group revenue declined by 0,9%, which reflects the continued subdued
trading environment.

Year-on-year expenses have increased by 1,2%, reflecting the focus on
expense management in order to partially negate costs associated with
investing in key strategic initiatives.

The Group ended the period with net cash of R29,2 million, compared to a
net overdraft of R68,2 million at 30 June 2014. The movement is mainly due
to improved working capital management.

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 efficiency and
improving cost structures has countered these conditions to some extent.

Iliad's GBM division produced a mixed performance under the circumstances.
The Inland subdivision recorded pleasing improved bottom-line results. The
Coastal subdivision results were more subdued but profitable.

In the SBM division, all business clusters were profitable and contributed to
the result. The Cachet business delivered a notable result.

PROSPECTS
As previously reported, we will continue to leverage our newly integrated
ERP platform to facilitate various projects that will improve our competitive
position. We expect various initiatives to assist in protecting gross margins.
Our brands will enjoy further exposure through various marketing campaigns
and we aim to continue to optimise our portfolio and conduct feasibility
studies to expand into new geographic locations. Expanding our footprint
and enhancing customer satisfaction will remain a priority going forward.

We anticipate marginal 2015 revenue growth, in a period that will continue to
be challenging and competitive. We remain convinced that we have set the
foundation for sustainable growth into the future.

This industry has adjusted to evolving trading conditions and the market
remains very competitive. The infrastructural efficiencies implemented
during the period, stringent performance targets, realignment of the portfolio
and implementation of various key strategic initiatives ensure the Group is
well positioned to capitalise on opportunities when growth gradually returns
to the market.

CHANGES TO THE BOARD
There were no changes to the Board of Directors 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 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 2014.

The Board of directors approved these condensed consolidated financial
statements on 20 August 2015.

The preparation of the Group's consolidated financial results for the period
ended 30 June 2015 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 2014, 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
2014 statement of financial position and related notes.

EVENTS AFTER THE REPORTING DATE
In the Firm Intention Announcement published on SENS on 23 July 2015,
shareholders were informed of the firm intention of Steinhoff International
Holdings Ltd to make an offer to acquire the entire issued ordinary share
capital of Iliad (net of Treasury Shares) by way of a Scheme of Arrangement,
in terms of section 114 read with section 115 of the Companies Act, to be
proposed by the Board between Iliad and Iliad Shareholders. Following the
successful implementation of the Scheme, Iliad will be delisted from the JSE
in terms of paragraph 1.16(b) of the JSE Listing requirements.

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.

20 August 2015, Johannesburg

Andile Sangqu                    Eugene Beneke                Chris Booyens
Independent Non-executive        Chief Executive              Chief Financial
Chairman                         Officer                      Officer

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                           Unaudited      Unaudited        Audited
                                                                June           June       December
R'000                                                           2015           2014           2014
Assets
Non-current assets
Property, plant and equipment                                154 298        140 945        152 524
Intangible assets                                            230 961        232 241        231 601
Long-term receivable                                           5 548          5 270          4 482
Deferred taxation                                             56 986         52 559         56 896
Total non-current assets                                     447 793        431 015        445 503
Current assets
Inventories                                                  566 170        593 264        603 687
Trade and other receivables                                  545 338        581 453        446 636
Taxation                                                       1 487              –              –
Cash and cash equivalents                                    132 538         48 716        142 501
Short-term portion of long-term receivable                     1 463          6 043          2 293
Total current assets                                       1 246 996      1 229 476      1 195 117
Total assets                                               1 694 789      1 660 491      1 640 620
EQUITY AND LIABILITIES
Equity 
Stated capital                                                   122            122            122
Retained income                                              813 417        742 689        800 341
Total equity                                                 813 539        742 811        800 463
Non-current liabilities 
 
Long-term borrowings                                           8 190          5 962          8 537
 
Total non-current liabilities                                  8 190          5 962          8 537
Current Liabilities 
Trade and other payables and provisions                      766 055        784 531        776 139
Bank overdraft                                               103 302        116 875         45 374
Taxation                                                           –          8 359          5 969
Short-term borrowings                                          3 703          1 953          4 138
Total current liabilities                                    873 060        911 718        831 620
Total equity and liabilities                               1 694 789      1 660 491      1 640 620

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                           Unaudited      Unaudited        Audited
                                                                June           June       December
R'000                                                           2015           2014           2014
Revenue                                                    2 093 160      2 111 327      4 365 448
Cost of sales                                            (1 498 857)    (1 523 997)    (3 145 531)

Gross margin                                                 594 303        587 330      1 219 917
Administration, selling and distribution expenses          (515 500)      (509 139)    (1 051 036)
EBITDA                                                        78 803         78 191        168 881

Depreciation                                                (18 985)       (18 866)       (34 651)
Amortisation                                                   (640)          (640)        (1 280)

Operating profit before investment income (EBIT)              59 178         58 685        132 950
Investment income                                              1 860          3 375         5 617

Operating profit before finance charges                       61 038         62 060        138 567
Finance charges                                              (7 149)        (8 887)       (14 754)
Profit before taxation                                        53 889         53 173        123 813
Taxation                                                    (11 317)       (12 108)       (25 096)
Total comprehensive income for the period                     42 572         41 065         98 717
Attributable to:
Non-controlling interest                                           –              –              –
Owners of the parent                                          42 572         41 065         98 717
                                                              42 572         41 065         98 717
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    134 071 260    134 071 260
Weighted average number of ordinary shares in issue
(excl treasury shares)                                   134 071 260    135 312 085    134 686 573

Basic and diluted earnings per share (cents)                    31,8           30,3           73,3
Headline earnings and diluted headline earnings per
share (cents)                                                   31,4           30,0           72,3

Dividends per share (cents)                                        –              –           22,0
RECONCILIATION OF HEADLINE EARNINGS
Attributable profit for the period                            42 572         41 065         98 717
Adjusted for :
Profit on disposal of property, plant and equipment
(net of tax)                                                   (469)          (465)        (1 369)
Headline earnings for the period (R'000)                      42 103         40 600         97 348

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                           Unaudited      Unaudited        Audited
                                                                June           June       December
R'000                                                           2015           2014           2014
Cash flows from operating activities                        (17 388)       (58 889)        123 385
Operating profit adjusted for non-cash items                  70 702         69 983        164 046
Working capital changes during the period                   (69 227)      (117 311)       (12 146)
Taxation paid                                               (18 863)       (11 561)       (28 515)
Cash flows from investing activities                        (20 108)          (702)       (23 410)
Cash flows from financing activities                        (30 395)       (47 351)       (41 631)
Net (decrease)/increase in cash and cash equivalents for
the period                                                  (67 891)      (106 942)         58 344
Cash and cash equivalents at the beginning of the period      97 127         38 783         38 783
Cash and cash equivalents at the end of the period            29 236       (68 159)         97 127


SUPPLEMENTARY INFORMATION 
                                                           Unaudited     Unaudited        Audited
                                                                June          June       December
                                                                2015          2014           2014
Net asset value per share (cents)                              606,8         554,0          597,0
Net tangible asset value per share (cents)                     434,5         380,8          424,3
Proceeds on disposal of business assets (R'000)                    –        18 154         51 105
Capital commitments (R'000) 
  – approved and contracted                                    3 754         4 350          1 063
  – approved not contracted                                   35 689        35 099         57 033


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                           Unaudited     Unaudited        Audited
                                                                June          June       December
R'000                                                           2015          2014           2014
Total equity at the beginning of the period                  800 463       746 743        746 743
Movement in retained income/(loss)                            13 076       (3 932)         53 720
Attributable to owners of the parent                          42 572        41 065         98 717
Treasury shares                                                    –      (18 183)       (18 183)
Dividends to owners of the parent                           (29 496)      (26 814)       (26 814)
Total equity at the end of the period                        813 539       742 811        800 463

CONDENSED 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                                2015          2014         2014          2015           2014           2014           2015           2014           2014
Revenue                         2 093 160     2 111 327    4 365 448     1 706 667      1 707 386      3 540 894        386 493        403 941        824 554
Gross margin                      594 303       587 303    1 219 917       447 399        434 337        908 619        146 904        152 966        311 298
EBITDA                             78 803        78 191      168 881        50 950         45 483         98 783         27 853         32 708         70 098
Depreciation                     (18 985)      (18 866)     (34 651)      (12 793)       (14 001)       (24 010)        (6 192)        (4 865)       (10 641)
Amortisation                        (640)         (640)      (1 280)            –               –              –          (640)          (640)        (1 280)
EBIT                               59 178        58 685      132 950        38 157         31 482         74 773         21 021         27 203         58 177
Total assets                    1 694 789     1 660 491    1 640 620     1 108 477      1 011 284      1 080 031        586 312        649 207        560 589
Total liabilities                 881 250       917 680      840 157       590 370        551 718        620 161        290 880        365 962        219 996
Capital expenditure                22 396        20 428       51 105        15 169          7 939         21 781          7 227         12 489         29 324

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              AH 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) Ltd 13th Floor Rennie House
                       19 Ameshoff Street Braamfontein 2001
                       PO Box 4844 Johannesburg 2000
Sponsor and
Corporate Advisor      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: 25/08/2015 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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