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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').
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