ACCENTUTE LTDFollowing a strong showing of revenue and pro� - PDF document

ACCENTUTE LTDFollowing a strong showing of revenue and pro�tability in the interim results for the six months ended December 2008, demand FloorworX con�nued its strong performance, with the comple�on of the Natalspruit Hospital project ensuring record turnover in the months of January and February. Signi�cant margin improvement was a�ained as a result of the implementa�on of a general price increase together with an easing in the price of diesel and polymers. A number of stadiums were completed further contribu�ng to solid sales turnover. March however saw a rapid deteriora�on in ac�vity and can be ascribed to Government’s prepara�on for the elec�ons with the malaise con�nuing into April, compounded by the string of public holidays.The successful launch of the Global 3 Marmoleum range has seen renewed interest in this superior �oor covering. We are currently working on a number of Marmoleum projects in Cape Town (Khayalitcha and Mitchells Plain hospitals) and major hospitals in Botswana and Namibia. Nora rubber is presently being installed at the Durban stadium and the Cape Town stadium has Marmoleum in addi�on to the Nora rubber speci�ed.The compe��ve situa�on has intensi�ed with some of the opposi�on displaying desperate ac�ons presently. We have decided to respond forcefully both in terms of aggressive pricing and increased marke�ng ac�vity which we hope will result in bringing some sanity back to the playing �eld.The FloorworX training centre has been a hive of ac�vity with all the courses being substan�ally over subscribed. At our training centre, students are taught e�ec�ve and e�cient installa�on regimes and techniques, e�ec�vely raising the level of pro�ciency in the industry while going some way towards addressing the skills shortage. We are hopeful that the current market condi�ons should be short lived and that the new Government will shortly deliver on their promises of aggressive infrastructural spend, in par�cular refurbs of hospitals and school classrooms. Despite FloorworX being involved in a number of completed stadiums, there are as many that s�ll need to be completed. We are also awai�ng the outcome of a number of projects including a signi�cant transport �ooring tender.Donald E Pla�Managing Director : FloorworXFLOOWO The period January to March 2009 has seen a steady start to the year. Factors a�ec�ng this are the tradi�onally slow start in the industry as well as the pressure on the general economy, as a result of the global and local economic downturn. Having said that, we believe we have weathered the storm well thus far and are con�dent that we will con�nue to do so in the months to come.Market condi�ons, with speci�c reference to the construc�on industry are such that there is a marked increase in compe��on as a result of the slow down in the housing market in par�cular. Not withstanding these challenges, we are con�dent that, whilst the same level of expansive growth of the past three years may not be achieved, we will come through this period sa�sfactorily. We have been awarded a number of large contracts such as Travena o�ce development (in associa�on with G D Irons construc�on) and Freedom Park (in associa�on with Ste�anu� Stocks), both of which have a mul�ple phase roll out prospects. Further por�ons of the Natalspruit Hospital are currently underway.We concluded our �rst contract in Angola to the value of R1.5 million which included the shipping of balustrade and windows. These are to be used in the �rst phase of a large mixed use development in Luanda. We are con�dent that this will be the start of future projects in that country.Comments from key suppliers indicate that o� takes are down as much as 30 % with margins under pressure as well, with bad debt becoming an increasing problem. This indicates that in our sector there is signi�cant pressure on both volume and margin.The period ahead will pose further challenges and we will meet and rise to them through innova�ve marke�ng to architects and speci�ers as well as making prudent use of our well established network in the Accentuate Group.Alex KerrodManaging Director: CGA The �nancial period under review has seen a shi� of focus from the successful restructuring of the �nance, opera�onal, and administra�on departments to focus more on the revenue side of the business. We are well in the process of rede�ning our sales, marke�ng and distribu�on strategy. This has translated into a segmented and branded product range into the following sectors namely: Food and Beverage, Industrial and Transport, Commercial and Flooring, Retail and the Export markets. Products are now packaged and o�ered for these speci�c markets, allowing more specialisa�on of these market segments going forward.Further alignment of all departments has taken place within the division, to support the same major objec�ves namely revenue, cash �ow and return on investment. To sustain these objec�ves in the long-term our Human Resources Department has worked closely with Management in the recruitment, development and reten�on of talent within our division. We have already seen a major improvement on all the above objec�ves over the last three months.We are de�nitely seeing that the downturn in the economy, caused by the interna�onal credit crunch, has had a nega�ve impact on our tradi�onal markets namely the manufacturing and industrial sectors. This has also challenged us to di�eren�ate our market o�ering going forward and we have expanded our Research and Development capabili�es to support this strategy. We are excited about the poten�al in our local market. We are focusing on blue chip clients and will build strong sustainable rela�onships going forward. The export market has shown steady growth over the last three months and we are expec�ng further growth going forward. We have also iden��ed good opportuni�es, extrac�ng the synergies between our sister company FloorworX and Sa�c, speci�cally in the areas of adhesives and �oor coa�ngs and maintenance. This rela�onship will be developed over the next few months. A�er a slow and challenging launch, the domes�c cleaning chemical “Magic Maid” range has been established in major retailers such as Pick ‘n Pay and Spar and current take-up is promising. Eric Pla�Managing Director: SAFIC