Review
of operations

Nature of business

Importer and distributor of brassware and accessories.


Strategic positioning Target market
Experience water’s inspiration.
  • Italtile Retail, CTM and TopT store networks.
Key performance indicators Trends 2020 Trends 2019
Sales down
Average selling price up down
Margins up down
Net profit up down
Stock turn up balanced
Closing inventory down
Key differentiators
  • Integral component of the Group's supply chain.
  • Long-standing relationships with international suppliers and extensive import experience.
  • State-of-the-art robotic warehouse facility.
  • ITD's Tivoli range is the only major Italian brassware brand available in South Africa.
2019/20 priorities Scorecard
  • Leverage BOP to improve stock turn and in-stocks, while simultaneously reducing overall stockholding across the integrated supply chain in line with targets.
tick
  • Enhance buying to ensure a more competitive, higher margin offering.
  • Grow market share through increased sales to existing customers. Prior to the lockdown, sales volumes had grown and the business was on track to achieve this goal.
cross
2019/20 major achievements
  • Improved stock turn and total stockholding, and substantially reduced slow-moving and obsolete stock.
  • Consistent improvement of the in-stock position, specifically of business-critical items.
  • Despite deferring price increases, grew margins and average selling price through improvement in range offering and better buying.
  • Further enhanced efficiencies in the robotic warehouse, which reduced downtime during the year and achieved a new record for single-day pickings.
2020/21 priorities 2020/21 prospects
  • Leverage BOP to improve stock turn and in-stocks, while simultaneously reducing overall stockholding.
  • Keener negotiations on supply price agreements to offset some of the impact of the weaker exchange rate.
  • Complete the software and hardware upgrade of the robotic warehouse which will improve stock management and stock losses, and reduce downtime.
  • Complete the automation of all manual warehouse processes, which will result in significant improvements in efficiencies and inventory control, and enhance service to customers. The paperless system will also reduce overheads and simultaneously deliver environmental benefits.
  • Implement stringent cost-containment measures to achieve profit growth targets.
  • Grow market share through increased sales to existing retail customers, new cross-border customers and once-off commercial opportunities.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • The goal to grow market share will be determined by the business's ability to ensure optimal levels of competitively priced stock.
  • Margins will face extreme pressure due to the volatility and deterioration of the local currency. Following a year of margin sacrifice in the business, price inflation will be implemented in the forthcoming period.
  • Improved productivity and intensification of rigorous cost-containment measures will be imperative to achieve profit growth targets.

Nature of business

Importer and distributor of laminate and vinyl floor boards, bathroom furniture, shower enclosures, sanitaryware, décor and other home finishing products.


Strategic positioning Target market
Where service is the point
  • Italtile, CTM and TopT store networks.
Key performance indicators Trends 2020 Trends 2019

Sales

DOWN

Average selling price

Margins

Net profit

DOWN UP

Stock turn

DOWN

Closing inventory

DOWN
Key differentiators
  • Integral component of the Group's supply chain across merchandise categories.
  • Strong relationships with international stakeholders.
  • Leading South African importer and distributor of high-quality European laminates and bathroom furniture, vinyl floor boards, shower enclosures and décor.
2019/20 priorities Scorecard
  • Explore opportunities to launch a select shower range for the open market. This initiative will be pursued when market conditions and stock availability stabilise.
  • Rationalise product ranges according to trends and customer expectations.
tick
  • Increase efficiencies through our supply chain partners.
2019/20 major achievements
  • Management of the Vereeniging DC, which was previously outsourced, has been brought in-house, which should improve service levels to our integrated retail partners.
  • Successful commissioning of our new Durban DC warehouse facility which services the KwaZulu-Natal and Eastern Cape regions.
  • Introduction of a software application to assist the Cedar Point agents to streamline communication and activities between the back-office and integrated retail partners.
  • Reduced distribution costs by integrating into the Ceramic distribution model.
2020/21 priorities 2020/21 prospects
  • Improve warehouse efficiencies and standardise operations in all three DC warehouse facilities.
  • Convert to full automation and paperless systems in all three DC warehouse facilities by the end of FY2021. This programme will improve productivity, reduce costs and simultaneously deliver environmental benefits.
  • Remain competitive by prioritising cost-saving initiatives and managing margins through enhanced buying.
  • Reduce transport costs as a percentage of sales.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Continue to investigate opportunities to supply products to open market retailers.
  • Rationalise product ranges in line with market trends and customer expectations.
  • Explore opportunities to expand product ranges in partnership with local suppliers.
  • Investigate new, competitive supply opportunities out of Turkey.

Nature of business

Procures stock for the Group and is one of the largest importers of porcelain tiles in South Africa. Provides warehousing, distribution and logistics services to the Group.


Target market
  • The Group's retail store networks and integrated suppliers.
Key performance indicators Trends 2020 Trends 2019

Sales

DOWN DOWN

Average selling price

Margins

Net profit

DOWN UP

Stock turn

Closing inventory

DOWN
Key differentiators
  • Long-standing relationships with international suppliers and transport agents.
  • Extensive multi-decade import experience.
  • Strong financial position which facilitates optimal investment in inventory.
2019/20 priorities Scorecard
  • Rationalise the tile ranges for CTM and Top T.
TICK
  • Explore and implement initiatives to reduce distribution/freight costs.
  • Continue to improve stockholding levels and stock turn.
2019/20 major achievements
  • Optimised the procurement process to source more competitively priced products, including concluding agreements with new suppliers in India.
  • Implemented the Transport Management System ("TMS") to improve logistics efficiencies and reduce costs.
  • Reduced the average stock holding to more optimal levels.
2020/21 priorities 2020/21 prospects
  • Maintain the benefits achieved in the procurement process and continue to identify new opportunities.
  • Continue to improve and expand the TMS.
  • Source alternative ranges of porcelain tiles for CTM and TopT from India.
  • Continue to improve stock turn.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Implement a control tower solution and visibility within the import process.
  • Redesign the shipping front-end process to synchronise with the control tower solution.
  • Achieve savings on sea freight costs.
  • Explore opportunities to source more competitively priced product from new markets.