Accentuate poised to grow
Accentuate looks at opportunities for its flooring business in developed markets.
|||Johannesburg - Accentuate, the AltX-listed flooring and chemicals manufacturer, distributor and water treatment solutions provider, is poised to expand its flooring business to developed markets, including the US, Europe and Australia.
But chief executive Fred Platt stressed yesterday that Accentuate would be working with partners to penetrate these markets and did not intend to open branches in these developed countries. He said a decision on this expansion would be taken within the next three months.
Donald Platt, the managing director of Floorworx, said it had realised there was a huge opportunity in the US, European and Australian markets. He also confirmed that the group’s water solutions business, a joint venture with Ion Exchange of India, was starting to make inroads into the domestic market.
Water projects
Platt confirmed the business had been awarded contracts worth between R25 million and R30m, but had submitted bids for some sizeable water infrastructure projects. He said the award of these major contracts would be staggered and they would only know about the outcome of some of them by the end of the current financial year.
“Ion Exchange Safic is very uniquely positioned to take advantage of the water treatment and infrastructure projects within South Africa and has the potential to become a major contributor towards the performance of Accentuate,” he said.
A dispute with a group of shareholders, which delayed the payment of fees owing to non-executive directors, affected the earnings in the year to June.
Accentuate yesterday reported an 11 percent decline in headline earnings a share to 3.97c from 4.46c in the previous year.
Normalised earnings a share, which includes adjustment for directors fees paid, increased by 27 percent to 5.07c from 4c.
Accentuate disclosed earlier this month that private investment company Trustee Board Investments (TBI) had acquired a 25.23 percent stake in the group, with this shareholding acquired from the group of disgruntled shareholders.
Platt expressed confidence yesterday that shareholder relations had normalised.
The increase in operating expenses was limited to 2.4 percent, which included directors’ fees of R1.8m for the 2012, 2013 and 2014 years being paid in arrears during the year under review. Revenue rose by 3.4 percent to R318.6m from R308.1m.
Platt said revenue was negatively impacted by “serious industrial action”, currency volatility that impacted on project pricing and raw material input costs and “an incredible impact” from electricity load shedding by Eskom. A dividend was not declared. Platt was optimistic about the group’s prospects.
Critical mass
“We believe that will change the way Accentuate looks over the next couple of years, because it allows us to implement a number of strategic initiatives we identified, but which we were never able to execute,” he said.
Platt said it was important for Accentuate to grow in size and to get the critical mass as an organisation to be able to make a real impact and its first milestone was to grow annual revenue to R1 billion. “We are working towards that as our first objective and there are a number (of) initiatives that are geared towards achieving that,” he said.
These initiatives included filling its production capacity at its East London and Steeledale facilities, exploring opportunities in developed markets, appropriate acquisitions to bulk up the size of the group and the major focus over the next couple years was on providing design and technology for major water projects.
Shares in Accentuate remained unchanged yesterday to close at 60c.
BUSINESS REPORT