2023INTEGRATED ANNUAL REPORT
Logo

Currently viewing: PERFORMANCE REVIEW | Support services | Next: Chief Financial Officer's report

REVIEW OF OPERATIONS

SUPPORT SERVICES
OVERVIEW AND PERFORMANCE MATRIX

Property investment portfolio

Retail properties Manufacturing properties Environmental sustainability
  • This portfolio affords strategic advantage to the retail brand operations by ensuring stores are well located, well-presented and maintained, and contribute to an inspirational 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 that are supplied with high-quality raw materials sourced from productive quarries in close proximity to the plants.
  • 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, boreholes and environmentally sensitive building materials is prioritised.
Target market
  • Italtile Retail, CTM, TopT and U-Light store networks.
Key statistics   2023   2022  
Total number of stores   209* 206*
– Italtile Retail   14* 14*
– CTM   97* 95*
– TopT   92* 89*
– U-Light   6* 7*
– ELK#   6   3  
Ceramic Industries  
Number of factories   8   8  
Number of quarries   6   10  
Retail property capex incurred (new and refurbishments) R338 million   R398 million  
Portfolio changes  
– Properties acquired   7   6  
– Properties sold   2   1  
New stores opened  
– Italtile Retail   0   1  
– CTM   2   4  
– TopT   5   3  
– U-Light   0   2  
– ELK#   3   1  
Stores closed  
– TopT   2   3  
– U-Light   1   2  

* Excludes webstores.
# Lease in Group-owned property.

2022/23 priorities Scorecard
  • Continue roll out of stores to gain market share and service new markets (10 - 15 new stores).
right
  • Sell unproductive sites to ensure the portfolio remains healthy and retains optimal value.
 right
  • Review opportunities to convert leased sites to owned properties for high-performing TopT stores in proven markets.
right
  • In the context of materially higher land and construction costs, improve returns through optimising store size and construction costs. Inflation remained very high on materials and building costs, providing significant challenges.
 wrong
  • Continue to maintain and refurbish older properties in the portfolio to ensure relevant market value and support customer experience.
right
  • Drive green initiatives to improve environmental sustainability and reduce dependency on municipal services.
right
  • Continue to source and develop new suitable sites in Southern and East Africa to facilitate the Group's expansion programme.
 right
  • Continue to support the Group's expansion programme by incorporating ELK offerings into our existing properties where appropriate.
 right
2022/23 major achievements 2023/24 priorities and prospects
  • Goal to sell unproductive sites was achieved with the sale of two properties and the lodging of transfer of another.
  • Expanded the Group's footprint in East Africa with the opening of CTM Nakuru in Kenya.
  • Goal to convert leased sites to owned properties for high-performing TopT stores was achieved with the successful sourcing of three new sites.
  • Opened ELK stores in Westgate, Bryanston and Southgate in Gauteng.
  • We have commenced installing smart electricity and water meters in our stores. Thus far installations in Gauteng and the Eastern and Western Cape have been completed.
  • Increase returns by optimising store size and input costs; relocating non-performing stores; and ensuring keen negotiations on rental renewals.
  • Sell non-profitable/non-viable sites.
  • Drive green initiatives to ensure environmental sustainability and reduced dependency on municipal services through our programmes to implement solar and battery back-up, rain water harvesting and boreholes.
  • Continue to source and develop new suitable sites.
  • Continue to support the Group's expansion programme by incorporating ELK offerings into our current properties.