Accentuate lays down polished results

FLOORING and infrastructure services specialist Accéntuate is managing to grow its earnings, thanks to very effective cost management and a patient rollout of its new businesses, says CEO Fred Platt.

Accéntuate achieved strong results for the year to June, increasing revenue 1.3% to R322.7m and gross profit 2.6% to R162.1m.

The company’s diluted headline earnings per share climbed from R0.05 to R5.73.

“Our ongoing focus on containing costs meant operating expenditure fell 3.7% compared with the previous year. Our operating profit increased to R13.4m,” said Platt.

He said the AltX-listed manufacturing group had to place most of its focus on cost containment while macroeconomic conditions were poor in SA.

“Macroeconomic conditions are stacked against us and will continue to be for some years yet. We are looking at cost structures constantly in order to sustain profit growth. As long as we keep our costs down, we will have room to look for business in other markets,” said Platt.

Accéntuate’s FloorworX subsidiary contributed 79% of group sales during the period.

“FloorworX again showed resilience in coping admirably during extremely difficult trading conditions. Management’s ongoing focus on operating efficiency, flexible work practices and exploring new products and markets, resulted in operating profit increasing to R109m. Turnover had increased 1.7% and the gross margin had increased 1.3%,” Platt said.

Accéntuate also resolved fraud at FloorworX, which had cost the company about R70m over a decade.

“The perpetrator has been found guilty of fraud and theft and will be sentenced soon. We are trying to recover as much of the loss as we can. I accept that I must live with the fact that this happened under my watch and use the experience to create positives for Accéntuate in the future. We have put into place more control measures so as to avoid anything like this happening again,” said Platt.

Accéntuate restated its 2015 results as a result of the fraud.

Accéntuate’s investment in the Ion Exchange Safic watertreatment business was making progress. This was a partnership between Accéntuate and Ion Exchange India.

“I’d like the water-treatment business to grow substantially in the coming years so that the group becomes less reliant on FloorworX,” said Platt.

FloorworX again showed resilience in coping admirably during extremely difficult trading conditions