Review of operations

Nature of business

Manufacturer of tiles (South Africa and Australia) and bathroomware (South Africa).

Strategic positioning	Target market
Preferred supplier of tiles and bathroomware.	Retailers and wholesalers of fashionable and affordable tiles and bathroomware in South Africa, Australia and selected export markets.

Key differentiators

Leader in design and fashion, creating desirable products. Low-cost manufacturing ensures affordable products. Local supply ensures an understanding of customer requirements and a short, reliable supply chain. This supports our ′always in stock′ policy, with consistent volume supply of fashionable well-priced product. Complementary products for bathroom and complete home tiling solutions. Ceramic′s factories use the latest technology in their operations and rank among the most energy efficient in the world. The majority of our clay requirements are supplied by our own quarries, which have adequate reserves to meet medium to long-term requirements. Raw material quarries are rehabilitated concurrently and once the end of productive life is reached.

TILE DIVISION

South Africa: Samca Wall (monoporosa wall tiles); Samca+ (hardbody rectified floor tiles); Pegasus (ceramic floor tiles); Vitro (extruded fully vitrified tiles); and Gryphon (glazed porcelain tiles). Australia: Centaurus (glazed porcelain tiles).

	South Africa		Australia
Key performance indicators	Trends 2024	Trends 2023	Trends 2024	Trends 2023
Sales
Production volumes
Average selling price
Margins
Net profit
Closing inventory

2023/24 priorities	Scorecard
Increase market share. Market share declined due to the weak trading environment and increased competition.
Improve manufacturing efficiency to reduce costs and improve margins.	Ongoing
Enhance the management team. Key senior management positions were filled and management depth improved.
Improve Samca+ volumes and yields.	↔
Increase the polished production capacity at Gryphon and expand the range. Given intensified competition in this market segment, and management′s focus on improving plant and skills capability in the factory, a strategic decision was made to postpone expanding the polished product range.	Ongoing
Commission Vitro′s third production line upgrade.	Underway
Commission 0,6 MW solar power purchasing agreement at Samca+ and 1,0 MW at Samca Wall. 1,1 MW solar power was commissioned at the Samca Wall factory; the Samca+ agreement is currently under negotiation.

2023/24 major achievements	2024/25 priorities and prospects
Reduction in clay raw material costs. Completion of the Vitro production line upgrade is planned to go live in the first quarter of FY2025. A significant reduction in glaze costs was achieved through waste reduction across all tile factories. 1,1 MW solar power was commissioned at Samca Wall.	Improve the quality of the product and customer service to defend and grow market share. Continue to improve efficiencies including the reduction of waste across all factories to mitigate against high input cost inflation and continued selling price deflation. Improve productivity. Resolve the threat to LNG supply and safeguard business continuity. Strengthen the sales and commercial team.

BATHROOMWARE DIVISION

Betta Sanitaryware (Betta) and Betta Baths.

Key performance indicators	Trends 2024	Trends 2023
Sales
Production volumes
Average selling price
Margins
Net profit
Closing inventory

2023/24 priorities	Scorecard
Continue to grow market share through import-replacement products and increased production of fashionable, popular products.	↔
Improve manufacturing efficiency to contain cost increases below inflation and recover margins. While the Betta Baths factory reported excellent yields and delivered flat year-on-year cost growth, Betta′s Sanitaryware′s improvement process is still underway.
Complete commissioning of the new Betta warehouse and reduce product lead-times to customers. This project has experienced significant delays and remedial action is currently being implemented. The delayed commissioning has no impact on existing operations.
Increase capacity to manufacture free-standing baths.

2023/24 major achievements

2024/25 priorities and prospects

Betta Baths reported double digit profit growth, through cost reduction initiatives, improved yields and product mix. An import-substitute basin range was successfully introduced to the market. The existing heat-recovery system at Betta Sanitaryware was expanded; by re-using excess heat from the kilns, the need for gas-fired boiler systems for processing was eliminated. Betta′s water-use licence application was approved. An improvement in waste-water management resulted in the reduction of the water-use footprint.

Improve products and customer service to defend and grow market share. Improve efficiencies, including the reduction of waste and increase in yields. Drive cost rationalisation initiatives to recover margin. Improve productivity.

Nature of business

Manufacturer of cement-based adhesives, grouts, water-based paints and related products. Comprises nine manufacturing facilities in Johannesburg, Durban, Gqeberha, Cape Town, Bloemfontein, Mokopane, Mombasa, Lusaka and Harare.

Strategic positioning	Target market
Africa′s preferred tiling solutions.	Primarily the Group′s retail networks: Italtile Retail, CTM and TopT, as well as select open market customers including speciality tile retailers and big-box hardware stores.

Key performance indicators	Trends 2024	Trends 2023
Sales
Average selling price
Margins
Net profit
Stock turn
Closing inventory

Key differentiators

A national footprint of manufacturing plants which underpins Ezee Tile′s ′always in stock′ policy with consistent supply of products. Strong strategic partnerships with key raw material suppliers who provide access to latest technologies to improve quality while reducing costs. Largest producer status affords economies of scale. Vertical backward integration through our own silica quarry.

2023/24 priorities	Scorecard
Realise efficiencies in the new Vulcania factory.
Recruit critical skills and continue upskilling staff.
Entrench core elements of the Group′s culture into the business.	Underway
Complete the sand quarry purchase to secure long-term supply for the Vulcania factory.
Complete integration into the Group′s TMS to improve on-time-in-full (″OTIF″) deliveries and reduce costs.	Underway
Capitalise on opportunities to continue to build market share in the specifications market and with independent/open market customers.	Underway

2023/24 major achievements

2024/25 priorities and prospects

Completed commissioning of all production lines at the new Vulcania facility, realising cost and efficiency benefits. Successful restructuring of the management and operational teams. Addition of core competencies into the business, to further enhance efficiencies. Making steady progress in embedding the core elements of the Group′s culture into the business. Completed the sand quarry purchase and significantly increased supply of sand from this quarry to the Vulcania facility. Completed integration of the Group′s TMS at the Vulcania facility and concluded planning for roll out to other branches.

Continue to entrench core elements of the Group′s culture into the business. Complete recruitment for key vacancies. Revisit and rationalise the product range to improve production efficiencies and costs. Improve efficiencies at the sand quarry and further increase supply to the Vulcania facility and other markets. Complete roll out of the Group′s TMS to all branches in South Africa. Implement SAP warehouse management system at all branches in South Africa. Reinvigorate our drive to build market share in the specifications and projects market. Introduce a new partner into the Zambian entity and improve performance of the operation.