Review of operations

Italtile

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

Strategic positioning	Target market	Footprint
Live beautifully.	LSM 8 - 10 Discerning consumers in the upper-middle and premium-end segment and Commercial Projects market.		stores (2020: 14) including webstore.
Key performance indicators	Trends 2021	Trends 2020
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.
2020/21 priorities			Scorecard
Ensure the Commercial Projects division is well equipped and positioned to manage changes in the industry emanating from Covid-19.			Partially achieved- ongoing
Instil ongoing awareness and reduction of costs across the operation.
Intensify focus on maximising productivity throughout the business.
Implement strategic logistics improvements to enhance 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.
2020/21 major achievements
Achieved a substantial reduction in transport costs through improved processes, awareness and management. Increased profitability of all second-tier stores. Expanded the residential agent footprint, which has been particularly well received during the pandemic, since it offers consultations at our clients' homes. Increased public awareness of our wide range of environmentally sensitive products, with specific focus on porcelain sanitaryware and local tiles. Continued to develop and upskill our personnel. Achieved very pleasing results in the new Gaborone store, our first store in the rest of Africa region. Opened a new format franchise store in George, Western Cape (subsequent to year-end).
2021/22 priorities	2021/22 priorities
Undertake a major revamp of our store in KZN. Upgrade the departmental showroom in Nelspruit. Relocate our Boksburg store. Continue to improve our digital and omnichannel presence. Build a bench of trained, proficient managers. Position our marketing to further differentiate us from our competitors. Advance the post-Covid Commercial Projects positioning strategies, underpinned by the recruitment of competent high calibre commercial agents. Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.	Revisit our sanitaryware offering which will unlock additional value in terms of price-laddering and design. Recommence several large-scale commercial developments which were temporarily postponed due to the pandemic. Implement learnings from our new small-format store in George. Based on the success of our Gaborone store, explore further opportunities for expansion in the rest of Africa region.

CTM

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

Strategic positioning	Target market	Footprint
Big savings. More style.	LSM 5 - 8. Middle income DIY customers and small builders.		stores (2020: 72) in South Africa and 23 (2020: 22*) in the rest of Africa.
			corporate: (2020: 59) Franchised: 33 (2020: 35). includes webstores.
			stores revamped and two relocated (2020: 15).
Key performance indicators	Trends 2021		Trends 2020
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.

2020/21 priorities			Scorecard
Entrench retail excellence as our standard operating procedure.
Continue to develop our people pipeline.
Focus on our nine KPIs which are aligned with action plans and measured against performance and productivity targets.
Entrench our corporate values and culture. While we made good progress in terms of motivation and productivity levels, we need to continue to focus on this priority area. We have developed a "CTM Way" booklet for each staff member to entrench our values and culture, supported with monthly training by the brand's leaders.
Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.

2020/21 major achievements
21 stores were revamped and two relocated. Adapted our operations for the Covid-era with better presentation, touchless Voice of the Customer capabilities, as well as new pre-retailing in stores to encourage social distancing and improve the overall customer experience. Advanced the development of our people pipeline, specifically at store operator level, through our Operator Training Programme in partnership with the University of Stellenbosch and Henley Business School. Grew sales through our customer-centric focus and range improvements. Improved productivity levels by intensifying an accountable-with-consequence culture. Introduced scanner technology in the warehouse and dispatch functions to transition to a more efficient, paperless operation. Grew bathroomware sales and market share through our new Bathroom Boulevard look in the stores; the pre-retailing has substantially improved the shopping experience in this area. Entrenched diligent implementation of Covid protocols and regulations.
2021/22 priorities			2021/22 priorities
Continue to entrench retail excellence as our standard operating procedure. Continue to develop our people pipeline. Focus on our KPI visuals which are vital to achieving growth and improved customer service. Entrench our corporate values and culture through the CTM Way booklet and monthly training. Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.			Open six new stores, three in South Africa and three in the rest of Africa. Drive the customer-centric focus through all our activities. Improve operational efficiencies through innovation and enhanced productivity. Maintain Covid-modified practices and introduce further innovation and technology to improve the customer experience. Improve our employee engagement score, customer sentiment score and brand health rating.

Top T

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

Strategic positioning	Target market	Footprint
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.		stores (2020: 83*) in South Africa and 0 (2020: 1) in the rest of Africa.
			corporate: (2020: 49) Franchised: 36 (2020: 35). includes webstores.
			stores opened (2020: 5): Sibasa; Bochum; Mankweng; Bela-Bela; Tshilamba and Namakgale (Limpopo); Ganyesa (Northern Cape); Wynberg (Western Cape); Jozini (KZN) and Lusikisiki (Eastern Cape).
Key performance indicators	Trends 2021		Trends 2020
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.

2020/21 priorities	Scorecard
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 (target customers shopping-down due to financial constraints).
Address inefficiencies and secure improved cost management in the supply chain.
Intensify focus on improving our human capital and productivity by achieving more with fewer resources.
Strengthen the operations team, with specific focus on the buying capability.
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.

2020/21 major achievements
Achieved strong double-digit sales and profit growth. Opened 11 new stores and closed under-performing stores. Concluded equity agreements with two partners - being the incumbent Managing Director and a new Merchandise Director. Launched the upgraded webstore to facilitate online sales and increased website traffic. Successfully launched the Woza Ekhaya campaign culminating in one lucky customer winning a home. Launched the Makhi initiative, a CSI project comprising donations of solar backpacks to children in primary schools close to TopT stores. The backpacks feature road safety reflectors, a rechargeable solar light and rain poncho.
2021/22 priorities	2021/22 prospects
Develop a leadership pipeline at regional and store operator levels. Drive the core range and business critical in-stocks consistently with the latest fashion at affordable prices. Improve the store layout, presentation and customer experience in our stores. Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.	Open 10 new stores. Appoint additional JV partners to enhance the depth of management capacity. Launch a new look and feel for our stores.

U-Light

Nature of business
Specialist retailer of lighting solutions to complete the total customer shopping experience.

Strategic positioning	Target market	Footprint
Lighting the way for U.	LSM 6 - 9. Residential and commercial markets.		stores (2020: six*) in South Africa.
			corporate (2020: six) Franchised: two (2020: 0). includes webstores.
			stores opened in Tzaneen and Polokwane (Limpopo) (2020: five).
Key performance indicators	Trends 2021		Trends 2020**
Sales			–
Average basket growth			–
Average selling price			–
Margins			–
Net profit			–
Stock turn			–
Average store inventory			–
**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 indoor and outdoor products. Categories include chandeliers, pendants, ceiling fittings, wall fittings, downlighters, LED lighting, smart product and automation. Unique brand shopping experience with exceptional customer service.

2020/21 priorities	Scorecard
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 product range.
Execute opportunities to bring the import function in-house.
Enhance the brand's online presence.
Implement improved systems for stock management and consistent supply.
Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.

2020/21 major achievements
Opened two franchise stores. Launched a dedicated website, supported by online webstore. Achieved a bigger contribution to lighting sales in TopT outlets. Introduced a direct-source programme which led to improved margins and control over supply. Improved merchandise range and replenishment practices.
2021/22 priorities	2021/22 prospects
Enhance the operating model, build scale and progress from pilot mode to roll out. Develop sourcing capabilities to improve pricing, availability and uniqueness of our offering. Develop a merchandise range which is unique in the market place. Grow sales in TopT to be a meaningful category. Create a compelling online offering comparable to the best in our market. Continue to enforce health and safety protocols for employees and customers with regard to Covid-19.	Open additional franchise stores. Develop a commercial sales team with product to support this offering. Introduce new merchandise categories. Enhance integration of lighting into the Easylife Kitchens sales offering.