Review
of operations

Given the adverse external environment, management's focus continued to be on the internal growth factors within our control, namely, sales, cost leadership, productivity improvements and performance culture. The lockdown provided a vital opportunity to critically and objectively appraise our progress in these key focus areas and to hone our operations to endure and flourish in the demanding new environment.

Nature of business

Leading retailer of exclusive fashionable ranges of tiles, bathware and related products.


Strategic positioning Target market Footprint
Live beautifully
  • LSM 7 – 10
  • Discerning consumers in the upper-middle and premium-end segment and Commercial Projects market.
14
 stores (2019: 13) including webstore
 
1
 store opened: Gaborone (2019: 1)
 
1
 store revamped: Pretoria
Key performance indicators Trends 2020 Trends 2019
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Trend-setter and leading buyer of exclusive high quality fashionable international and local products.
  • Widely recognised as the industry front-runner in environmentally sensitive products.
  • Well-established specialist expertise and nationwide network.
2019/20 priorities Scorecard
  • Explore, determine and implement strategic logistics improvements. This initiative is underway and will continue to receive attention in the coming months.
  • Complete the transition of the webstore to an upgraded platform with specific focus on mobile accessibility.
  • Intensify employee engagement to drive the continuous development of personnel.
  • Optimise the business model to ensure market share and resources are appropriately apportioned between the major components: retail, webstore and the Commercial Projects divisions.
2019/20 major achievements
  • Substantial investment in upgrading our showroom lighting nationally resulted in enhanced display illumination and a concomitant energy saving with the introduction of LED lighting.
  • Expansion into Africa: the Gaborone store, which opened in December 2019, has been well received.
  • Development of the omnichannel experience, including a significant upgrade of our webstore platform.
2020/21 priorities 2020/21 prospects
  • Ensure that the Commercial Projects division is well equipped and positioned to manage changes in the industry emanating from COVID-19.
  • Instil ongoing awareness and reduction of costs across the operation.
  • Intensify focus on maximising productivity throughout the business.
  • Implement strategic logistics improvements to improve efficiencies and reduce costs.
  • Leverage improvements made on the webstore platform.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Expand our residential agent footprint. This on-site consultation service, offered by our sales specialists to residential clients at their homes, has traditionally been an important contributor to the business; in the COVID-19 era, we anticipate this convenience-centred offering will grow.
  • Grow awareness of our wide range of environmentally sensitive products with a specific focus on porcelain sanitaryware and local tiles.
  • Continue to develop and upskill our personnel.

Nature of business

Leading specialist retailer of tiles, laminate boards, taps, sanitaryware, shower enclosures, bathroom furniture and accessories.


Strategic positioning Target market Footprint *includes webstores
Big savings. More style.
  • LSM 5 – 8
  • Middle income DIY customers and small builders.
72*
 stores in South Africa (2019: 72*)  
 
22
 stores in the rest of Africa (2019: 20*)  
 
59*
 corporate (2019: 49*)  
 
36
 franchised (2019: 43)  
 
2
 stores opened: Gaborone (Botswana) and Kisumu (Kenya) (2019: 4)  
 
15
 stores revamped (2019: 9)  
Key performance indicators Trends 2020 Trends 2019
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Local and international buying power.
  • Year-round value offering with strong fashion component.
  • Integrated supply chain ensuring consistent availability of stock.
2019/20 priorities Scorecard
  • Develop the people pipeline to grow capability.
  • Entrench our corporate values and culture to energise our staff and drive sales growth. While we made good progress in terms of motivation and productivity levels, we need to continue to focus on this priority area.
  • Entrench CTM as the fashion leader in our market. This is reflected by the gain in market share across our merchandise categories.
2019/20 major achievements
  • The repositioning of the brand – centred on the Sithi Wena (you deserve it) ethos – continued to drive growth.
  • Expanded the footprint into the rest of Africa with one new store in Botswana and two stores in Kenya.
  • Launched the webstore’s easy to use multi-surface tile visualiser which enables customers to digitally view our tiles in their own rooms and match wall and floor tile offerings in lifelike reality.
  • Advanced the development of our people pipeline, specifically at store operator level, through our Operator Training Programme in partnership with the University of Stellenbosch.
  • Improved productivity levels through intensifying an accountable-with-consequences culture.
  • Grew bathroomware sales to gain market share in the category.
  • Implemented rigorous health and safety protocols in-store to curb the spread of COVID-19, with zero tolerance of non-compliance.
2020/21 priorities 2020/21 prospects
  • Entrench retail excellence as our standard operating procedure.
  • Continue to develop our people pipeline.
  • Focus on our KPI visuals. The nine KPIs, displayed in-store, are aligned with action plans and measured against performance and productivity targets. The KPIs are vital to achieving growth and improved customer service.
  • Entrench our corporate values and culture.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Open three new stores.
  • Drive the customer-centric focus through all our activities.
  • Adapt our operations to the new COVID-19 era where appropriate; for example, introducing a new touchless Voice of the Customer capability (previously customers were required to type on a screen, whereas now they can scan a QR code in the store and tell us about their experience on their cell phone).
  • Introduce scanner technology in the warehouse and dispatch functions to transition to a paperless operation, which will be more efficient as well as environmentally friendly.

Nature of business

Retailer of home-finishing products including tiles, paint, ceiling décor, taps, sanitaryware, lighting, hardware and accessories.


Strategic positioning Target market Footprint *includes webstores
Every price a LOW price.
  • LSM 4 – 7 (lower).
  • Entry-level value offering strategically situated in underserviced rural areas and outlying markets in close proximity to urban townships.
83*
 stores in South Africa (2019: 82*)  
 
1
 in the rest of Africa (2019: 1)  
 
49*
 corporate (2019: 16)  
 
35
 franchised (2019: 67)  
 
5
 stores opened: Ga-Rankuwa (Gauteng); Lethlabile (North West); Siyabuswa (Mpumalanga); Lebowakgomo (Limpopo); Port Elizabeth (Eastern Cape) (2019: 10)  
Key performance indicators Trends 2020 Trends 2019
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Low cost model.
  • Flexible, opportunistic home-finishing product range.
  • Affordability and availability of stock and accessibility to market.
  • Strong community relationships and local marketing.
2019/20 priorities Scorecard
  • Implement a Franchise Partner Development Programme to address succession planning in the business.
  • Implement and monitor the business-critical framework to ensure consistent stockholding and range across all stores to improve the complete solution offering to every customer.
  • Increase participation in regional community projects to raise brand awareness.
  • Activate market disruptor deals and promotional campaigns
2019/20 major achievements
  • Opened five new stores (COVID-19 constraints limited achieving a higher number).
  • Implemented the Franchise Partner Development Programme with Henley Business School to address succession planning in the business.
  • Used social media content to engage and establish active interaction with our customers online.
  • Held high profile community-based competitions which awarded 10 cars as major prizes.
  • Achieved sales and profit growth despite the national lockdown and subsequent restrictions.
2020/21 priorities 2020/21 prospects
  • Progress the conversion of non-performing franchised stores to Company-owned or JV stores to improve oversight and profitability.
  • Grow sales by attracting new customers. In the current environment of limited discretionary spend, we will target opportunities to gain market share among those customers shopping down due to financial constraints.
  • Address inefficiencies and secure improved cost management in relationships with the integrated supply chain.
  • Intensify focus on improving our human capital productivity by achieving more, with fewer resources.
  • Improve the customer shopping experience through better store layouts, merchandising and displays.
  • Improve our range through redeveloping and launching new products.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Ensure better in-stocks.
  • Open 10 new stores.
  • Launch our upgraded webstore to facilitate online sales and better manage the increased traffic experienced over recent months.
  • Implement more impactful community projects in the education sector, focusing on assisting local schools with donations of sanitaryware products to overcome poor sanitation facilities. Our goal is to assist with improving hygiene standards, which is a key priority during the pandemic. In addition, each store will support 10 schools with learning materials.

Nature of business

Specialist retailer of innovative lighting fixtures to complete the total customer shopping experience.


Strategic positioning Target market Footprint *includes webstores
Lighting the way for U
  • LSM 6 – 10.
  • Primarily residential (basic to high-end), with a commercial/light industrial component (product-specified and Commercial Projects).
6*
 stores (2019: 1)  
5
 stores opened: four in Gauteng – Northriding, Southgate, Westgate and Bryanston, as well as the webstore  
Key performance indicators
Only one store open in the prior corresponding period, therefore no comparable data available.
Key differentiators
  • Offering ranges from affordable to custom-designed fashionable lighting fixtures and accessories suitable for all rooms and settings.
  • Extensive selection of imported and locally manufactured product. Categories include chandeliers, pendants, ceiling fittings, wall fittings, downlighters, LED lighting, outdoor, smart product and automation.
  • Unique brand shopping experience with exceptional customer service.
2019/20 priorities Scorecard
  • Employ, train and upskill staff to ensure optimal engagement and shopping experience for customers.
  • Develop and expand ranges for U-Light stores and TopT stores to meet customer expectations.
  • Create market awareness through various channels.
2019/20 major achievements
  • Opened four new stores (Southgate, Northriding, Westgate and Bryanston, each with a unique format, layout and range).
  • Launched the first phase of our webstore.
  • Launched the TopT lighting range (a new merchandise category for the TopT brand).
  • Gained market share in a new market segment for the Group.
2020/21 priorities 2020/21 prospects
  • Increase the contribution of the lighting category to TopT sales.
  • Introduce a franchise component to complement the Company-owned model.
  • Expand the local and imported range.
  • Enhance the brand’s online presence.
  • Implement improved systems for stock management and consistent supply across the two brands.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Open four new U-Light stores.
  • Build relationships with industry professionals in the Commercial Projects segment.
  • Refine the distribution model.
  • Continue growing and driving new content on social media channels.