When in Greece…

Finweek English Edition - - COMPANIES & MARKETS - SHAUN HAR­RIS

AT 580c/SHARE Iliad Africa is trad­ing a lit­tle off its low for the past year but its share price has been pum­melled through­out the year, los­ing more than a third of its value. No sur­prise in that. A cau­tion­ary an­nounce­ment ear­lier this month warned share­hold­ers Iliad is re­align­ing a por­tion of its port­fo­lio, with the costs thereof ex­pected to have a “sig­nif­i­cant ad­verse im­pact” on in­terim re­sults. Those re­sults are due on 24 Au­gust. So how bad will the costs be? Clearly, bad enough to dec­i­mate in­terim re­sults. About the best ad­vice Iliad can give share­hold­ers is to wait for a de­tailed trad­ing up­date ahead of its in­terim re­sults.

There’s more amiss at Iliad. In April the board an­nounced ex­ec­u­tive di­rec­tor Neil Goosen was re­sign­ing. No clear rea­son was given, but since the ef­fec­tive date of his de­par­ture on 30 June he’s been break­ing col­lars and sell­ing shares like crazy. It doesn’t cre­ate con­fi­dence in the share. Homer would have wept.

But in our books Iliad is a buy – a very, very spec­u­la­tive buy. The share price could well go lower. It’s of­ten harder to call the bot­tom than the top. Why is it a spec­u­la­tive buy? Be­cause – like the epic poem it’s named af­ter – Iliad may come fight­ing through this one. The Iliad was set in the Tro­jan War, a tough decade in Greece and warm up for what’s go­ing on now. But those crazy Tro­jans sur­vived.

OK, an an­cient poem isn’t a good enough rea­son to buy the share. But per­haps be­cause the build­ing in­dus­try it sup­plies ma­te­ri­als to is so run down there must be a re­cov­ery. Hor­ri­ble full-year re­sults ear­lier this year in­di­cated the main rea­son for its slump in op­er­at­ing profit and earn­ings was the res­i­den­tial prop­erty mar­ket. There seem to be ten­ta­tive signs of re­cov­ery there.

Also, de­spite its fi­nan­cial blues, its div­i­dend was main­tained at 20c/share. And cash gen­er­a­tion was up.

There are also a few ma­jor as­set man­agers and in­sti­tu­tional share­hold­ers back­ing the com­pany, in­clud­ing Corona­tion, value in­vestors RE:CM and Afena. Iliad could again re­sume its odyssey, at least once its in­ter­ims are out the way.

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