Iliad Africa records flat growth for Q2 - CNBC Africa

Iliad Africa records flat growth for Q2

Southern Africa

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The group, which released its results for the six months ended 30 June 2013, reported a 0.4 per cent rise in revenue due to a subdued trading environment. The group also recorded a 30 cents per share loss on its bottom line.

“The loss is directly attributable to the portfolio adjustments we’ve made. The marginal revenue growth is reflective of the fact that the industry remains very challenging, and under those circumstances we’re pleased to have sustained the gross margins,” Iliad Africa CEO Eugene Beneke told CNBC Africa.

“Expenses are always controllable, up 3.7 per cent, which is well below inflation.  That results in negative leverage. Ultimately the big impacting factor on these results is the portfolio adjustment, which, as far as we’re concerned, is a culmination of various strategic initiatives that we’ve implemented in order to reposition the business.”

The Group recorded headline earnings of 0.4 cents per share for the six months ended 30 June 2013, compared to headline earnings of 20.0 cents per share for the same period in 2012.

Despite the overall flat growth recorded for the period, the group’s national portfolio has had positive productivity, specifically in the Eastern Cape, Free State and Northern Cape.

The additions and alterations segment also showed increased productivity levels from DIY customers.

“The contractor segment of the market, where we have a strong presence in, has been under pressure. But we do believe that some of the changes we’re making, inclusive of having completed the BUCO launch, which we will now support with a significant national marketing campaign for the balance of the year, that single identity positions us to benefit from any gradual growth that may come from the market in time to come,” Beneke explained. .

The pressure on consumer disposable income and the unsecured lending sector also attributed to the group’s flat growth, and its rural market remained subdued.

“We benefit indirectly from infrastructure spend and in areas where infrastructure spend takes place, roofs follow that, houses follow that. Ultimately we need house, offices and warehouses and the growth is there, albeit gradual. There’s no exponential growth around the corner,” he said.