Iliad lifts 2012 revenue by 6.2% on back of ‘mixed year’

18th March 2013

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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Construction materials group Iliad Africa increased its revenue by 6.2% to R4.5-billion in the year ended December 31, 2012, during a year in which the company delivered what it calls a “mixed performance”.

Iliad CEO Eugene Beneke told Engineering News Online that 2012 was a “tale of two halves” for the company, as it achieved revenue growth of some 10% at the interim, which did not continue into the latter half of the year.

“While we had good momentum in the first half of the year, the softening of the contractual work sector in the second half resulted in a relatively flat final quarter for the year, and reduced our overall growth,” he said.

Iliad recorded earnings of 24.3c a share for the year, which included the R30.4-million impairment of intangible assets in its wholesale timber business, which the company this week sold to York Timber for R45.5-million.

Year-on-year expenses increased by 6.2%, which Beneke considered a good performance considering the company’s extensive investment in its strategic projects.

The group closed the year with net borrowings of R76.9-million owing chiefly to the investment in working capital, one-off costs associated with the implementation of key strategic projects and an increase in tax.

Operations and Market
The group said on Monday that, while the last few years had been a challenging period for the building materials supply industry, Iliad's ongoing focus on procurement and the improvement of cost structures had countered these conditions to some extent. 

The general business materials division produced a mixed performance under these circumstances, with the inland subdivision recording a 7.1% increase in revenue and improved bottom-line results, while results from the coastal subdivision were more subdued but still profitable. 

Meanwhile, in the specialised buildings division, the down-trading 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 yearly losses in the ceramics business again reduced.

An improved result by the wholesaling subdivision included a notable result from equipment hire and the boards businesses, while the newly offloaded timber wholesale business continued to incur losses. 

Looking ahead, the group believed that the infrastructural efficiencies implemented during the year, along with stringent performance targets, the realignment of the portfolio and the implementation of various key strategic initiatives would ensure it could respond in future as growth gradually returned to the market.

However, Beneke cautioned that, as the subdued market trends of the last quarter were continuing into 2013, the company expected gradual, not exponential growth, and would focus on filling the company’s pipeline for new store roll-outs into 2014.

Iliad declared a final dividend of 20c a share for the period.

Edited by Creamer Media Reporter

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