Accentuate earnings hit by low trading in December - CNBC Africa

Accentuate earnings hit by low trading in December


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SAFIC, chemical company. PHOTO: SAFIC

“After seeing some signs of improved activity between September and November, trading in December was noticeably the lowest in recent years,” said [DATA ACE:Accéntuate Limited.], a supplier and manufacturer of floor covering materials and fine chemical blending, in a statement.

Earnings before interest, tax depreciation and amortisation fell from 12.8 million rand in 2012 to 8.3 million rand this year while operating profit declined 47 per cent from 10 million rand to 5.3 million rand.

Earnings per share fell from 6 cents to 2.86 cents while headline earnings per share also declined 53 per cent from 6 cents to 2.8 cents.

The group didn’t declare an interim dividend for the period.

Total revenue however increased from 146 million rand to 157 million rand while gross profit rose from 78 million rand to 82 million rand.

FloorworX, their flooring products manufacturer, contributed 78 percent to group revenue however sales at their East London facility were lower than the previous period due to a reduced public demand.

Production volumes declined by six percent

“This was offset by increased sales of imported flooring products, especially in the area of commercial office and retail developments,” continued the statement.

SAFIC, their environmental solutions division that manufactures chemical and cleaning products, contributed 22 per cent to group revenue

“The division made further progress towards its stated objectives of increasing revenue in areas which provide recurring and contract based income, broadening the customer base and adding more specialised chemical products. This assisted the division in achieving a 7.7 per cent increase in revenue despite the extremely tough trading conditions experienced in the mining and heavy industrial sectors traditionally serviced by Safic,” explained the company.

“It was pleasing to note that both FloorworX and Safic continued to make progress on expanding their market base during the very tough market conditions prevalent in the industrial and construction sectors.”

The group made two acquisitions during the period, Degrachem Limited and Suntups Wooden Flooring.

The Degrachem business acquired is principally involved in the supply of specialty metal treatment products and the Suntups business acquired is a supplier of engineered wooden flooring and decking products.

“Suntups and Degrachem acquisitions concluded during the period are both settling in very well into the existing group structures and are contributing in line with initial expectations,” said the company.

Accentuate believes that the effect of South Africa’s National Election scheduled for May 2014, coupled with the volatility of the rand, are likely to result in the economic climate for the group remaining challenging for the second half of the financial year.

However, they anticipate that trading levels for the second half will be better than those experienced in the previous corresponding period.