Accéntuate aims for recovery as political power changes hands

Flooring, water and chemicals specialist Accéntuate experienced a tough six months to December 31, 2017, with the company moving from a R3.5-million profit in the same period in 2016, to a loss of R1.78-million.Accéntuate said its business had suffered on the back of depressed macroeconomic conditions, political uncertainty and a lack of confidence in the country.

CEO Fred Platt noted, however, that the past week “hopefully signalled the end of ten years of decline” in government infrastructure spend.“At the end of last year we were forced to ask ourselves if we should continue to manufacture in South Africa.”“We believe President Ramaphosa when he talks about localisation, manufacturing and infra-structure spend.

“It is like the Reserve Bank said at Davos – the biggest stimulus package in the economy is confidence, and we can see that confidence is returning to South Africa.”Platt warned that this confidence would not have an “enormous impact on Accéntuate over the next six months. We will remain under pressure for the next year.”

Accéntuate revenue for the six months under review decreased by 1.3% to R157.3-million, owing mainly to lower sales volumes in the FloorworX business, which contributed 78% of group sales.Production volumes at the East London flooring manufacturing facility were purposefully managed down as a result of low government demand for classrooms, clinics and hospitals.

Margins were impacted by this lower level of production, as well as currency volatility, as a significant proportion of FloorworX product is imported.The Pentafloor acquisition was concluded by the end of September 2017.Pentafloor is a supplier in the access (raised) flooring market in South Africa and provides

Accéntuate with a product category currently not in its repertoire, enabling it to diversify,Accéntuate’s water treatment business, in which it owns a 40% share, is still to contribute significantly to the group. However, Platt aimed for this change in the next 12 months, as South Africa appeared to have woken up to the crisis it faced in terms of water supply.