Review
of operations

Overview and performance matrix

E-COMMERCE

Nature of business

To provide our customers with a seamless, omnichannel shopping experience, enabling them to easily view and purchase our products and services online and smoothly transition between online shopping and our brick-and-mortar stores.


Target market   Footprint
  • The Group's retail operations and its customers.
 
The Group's online shopping stores are:
 
CTM South Africa – www.ctm.co.za; CTM Kenyawww.ctm.co.ke; CTM Tanzania - www.ctm.co.tz;
 
Italtile Retail South Africa – www.italtile.co.za; TopT – www.TopT.co.za; U-Light - www.u-light.co.za
  Trends % increase
Key performance indicators 2020 2019 2020 2019
Online sales (Rand)        
  CTM SA 18 17
  CTM Kenya 9 146
  CTM Tanzania 89 182
  Italtile Retail upwards arrow (6) 37
  TopT # 25 #
  U-Light # # # #
Quotes generated for all stores (Rand)        
  CTM SA 47 24
  CTM Kenya 35 40
  CTM Tanzania 107 #
  Italtile Retail 66 43
  TopT # 56 #
  U-Light # # # #
Visitor sessions        
  CTM SA 14 18
  CTM Kenya 36 41
  CTM Tanzania 177 53
  Italtile Retail 47 26
  TopT # # 60 #
  U-Light # # # #
# No full-year comparable data available.
2019/20 priorities Scorecard
  • Launch the U-Light webstore to support the new brand.
  • Enhance the shopping experience across all the newly established Magento 2 e-commerce platforms.
  • Launch an online retail concept and shopping tools platform for Italtile Retail, centred on driving the shopping experience via inspiration.
2019/20 major achievements
  • Successful launch of CTM's easy-to-use multi-surface tile visualiser, which enables customers to digitally view the brand's tiles in their own rooms and match wall and floor tile offerings in lifelike reality.
  • Launch of the U-Light online webstore.
  • Implementation of an artificial intelligence online marketing methodology across several of our webstores, which dramatically increased the volume of quotes generated online.
  • Developed CTM SA's webstore platform to retail the U-Light product range specifically as an online-only purchase option.
  • Migrated all webstores from our original web software onto the latest technology, which enables scalability and enhances growth prospects.
2020/21 priorities 2020/21 prospects
  • Enhance and differentiate our specialist online shopping experience from other generalist online retailers. Our focus on specific niche categories and product lines enables convenient ease of purchase for our customers and sets us apart from other generalist offerings.
  • Enhance and grow digital augmented reality tools to improve our online shopping experience.
  • Rapidly grow quotes and sales conversions across all brand webstores.
  • Effectively utilise conversion rate tools and methods to optimise different user journeys on our online stores.
  • Better implementation of delivery tracking, giving customers greater visibility over their delivery timeframes.
  • Continue to enforce health and safety protocols for employees and customers with regard to COVID-19.
  • Enhance and grow digital augmented reality tools to improve our online shopping experience.

INFORMATION TECHNOLOGY (IT)

Nature of business

  • The IT department generates value for the organisation through implementing incremental innovation that enables the Group to remain relevant by improving the customer experience, thereby increasing loyalty to the brands and supporting revenue growth.
  • The division's primary objective is to provide a seamless experience between the online and offline shopping offerings to ensure the Group remains a trailblazer in the digital era. The Group's culture of agility and continuous improvement is leveraged to deliver tangible applications for our customers.

Strategic positioning Target market
Future proofing business through strategic digital investments.
  • The Group's retail, distribution and manufacturing operations and key business units including HR, Marketing, Finance and Supply Chain Logistics, as well as the Group's end customers.
Key performance indicators Scorecard
  • Ensure business continuity through business application that enables individuals or business units to work productively and efficiently from remote locations.
  • Proactively pursue emerging technologies such as artificial intelligence and social platforms to enhance current revenue streams.
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  • Complete the migration of IT Infrastructure to the cloud.
2019/20 priorities Scorecard
  • Tighten cybersecurity policies and implement robust preventative measures.
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  • Launch the enhanced mobile point-of-sale functionality.
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  • Relaunch Italtile Retail's e-commerce site.
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  • Launch the new U-Light webstore.
2019/20 major achievements
  • Implementation of the Group's Smart Sales CRM solution into the e-commerce brands' webstores as well as the in-store mobile point of sale, to further enrich the omnichannel customer experience.
  • Implementation of interactive platforms to facilitate improvement of the digital customer experience.
  • Upgrade of the existing SAP database management system to enable the migration path and readiness of the solution for cloud.
  • Implementation of an application framework that enhances business agility by allowing rapid development and deployment of applications in response to evolving business requirements.
2020/21 priorities 2020/21 prospects
  • Execute the digital strategy by enhancing online customer experiences to drive the quote conversion rate.
  • Support supply chain integration through the use of internet of things solutions and leveraging existing IT landscape to fast track business productivity and efficiency.
  • Refresh in-store hardware and software for our mobile point of sale solution. This will leverage newer technology platforms and enable contactless payments.
  • Digitise the warranty and return process to streamline the workflow and introduce service level agreements and KPIs that can be managed by the business.
  • Extend the e-commerce footprint into the Group's rest of Africa operations.
  • Broaden the Group's online augmented reality capabilities to further advance our lead in the digital space and introduce the application to our in-store experience.

PROPERTY INVESTMENT PORTFOLIO

Nature of business

 


Retail properties   Manufacturing properties   Environmental sustainability
  • This portfolio affords strategic advantage to the retail brand operations by ensuring stores are easily accessible, well-presented and maintained, and contribute to an aspirational shopping experience. The portfolio is continuously evaluated and enhanced to ensure optimal returns.
 
  • The Group's manufacturing operations comprise well-maintained state-of-the-art factories which are supplied with high-quality raw materials sourced from productive quarries in close proximity to the plants. Raw material quarries are rehabilitated concurrently and once end-of-productive-life is reached.
 
  • The Group's sustainability agenda is promoted through the use of cost-effective, energy efficient practices in the construction of new buildings and the renovation of older buildings. Optimal use of natural light, solar technology, new-generation lighting, water-saving taps, rain water harvesting, and environmentally sensitive building materials is prioritised.
  • Our factories at Ceramic Industries use the latest technology in their operations and rank among the most energy efficient in the world.
Target market
  • Italtile Retail, CTM, TopT and U-Light store networks.
Key statistics 2020    2019   
Retail portfolio market value R3,3 billion    R3,0 billion   
Manufacturing portfolio market value R1,0 billion    R0,8 billion   
Total number of stores 192*   184*  
  Italtile Retail 13*   12*  
  CTM 91*   89*  
  TopT 83*   82*  
  U-Light 5*   1*  
Number of factories    
Capex incurred (new and refurbishments)
  Retail R274 million    R312 million   
  Manufacturing R180 million    R189 million   
Portfolio changes
  Properties acquired    
  Properties sold –     
New stores opened
  Italtile Retail    
  CTM    
  TopT    
  U-Light    
Stores closed
  TopT    
* Excluding webstores.
2019/20 priorities Scorecard
  • Review opportunities to convert leased sites to owned properties for high-performing TopT stores in proven markets.
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  • In the context of materially higher land and construction costs, improve returns through optimising store size and input costs.
  • Sell non-profitable/non-viable sites to ensure the portfolio remains healthy and retains optimal value. This was not fully achieved due to the lockdown, which delayed transfer of properties.
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  • Continue to maintain and refurbish older properties in the portfolio to ensure relevant market value.
2019/20 major achievements
  • Despite the pandemic-related challenges, 12 new stores were opened and we advanced the ongoing store upgrade programme.
  • We continued to support the Group's expansion programme into East Africa with the acquisition of a property in Rwanda and the opening of two stores in Kenya.
  • We have sourced land to relocate Italtile Boksburg, CTM Mthatha and CTM Maun.
2020/21 priorities 2020/21 prospects
  • Sell non-viable sites to ensure the portfolio remains healthy and retains optimal value. Our target is three to five properties.
  • Review opportunities to convert leased sites to owned properties for high-performing TopT stores in proven markets. Our target is three to five stores.
  • Given materially higher land and construction costs, improve returns through optimising store size and input costs.
  • Continue to maintain and refurbish older properties in the portfolio to ensure relevant market value.
  • Source suitable new sites in Southern Africa to facilitate the network expansion programme.
  • Support the Group's expansion programme into East Africa.
  • Optimise returns through relocating non-performing stores and ensuring keen negotiations on rental expenses.
  • Support the Group`s proposed programme to incorporate the Easylife Kitchens offering into selected existing properties. Three pilot stores will be developed on existing CTM sites in the forthcoming year.