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Accentuate announces lower revenue

Cape Town - Accentuate [JSE:ACE] announced on Monday that revenue for the interim period to the end of December 2016 lowered to R159.3m and gross profit decreased to R73.0m.

Operating profit decreased to R6.1m. Profit and total comprehensive income attributable to owners slipped to R3.5m. In addition, headline earnings per share fell to 2.66 cents per share.

Dividend

The board deemed it prudent not to declare an interim dividend.

Prospects

Management believes that the extended lag in the implementation of government infrastructure projects, particularly in transitioning metros, is over.

However, although some infrastructure spending decisions are imminent and the pipeline for FloorworX is looking somewhat improved, the financial pressures within the fiscus are still resulting in a number of planned projects not being undertaken.

"For some time Accentuate was prohibited from achieving a level of growth the market would have liked to see. Most of the factors which contributed to this are now behind the group and management look forward to notifying the market of exciting developments as the company designs a new way forward," the company said in a statement.

"Management is taking active steps to grow the businesses to ensure critical mass is achieved, particularly in the chemicals and water treatment sectors. The growth path identified will be elaborated on as soon as possible, with the main objective being to position Accentuate against the vulnerability of reduced spend by government on infrastructure and upgrade projects."

Volatility will be further smoothed out and with a change in focus of the flooring business to access export markets as well as further expansion into new product ranges, exposure to the private sector will increase. Notwithstanding, the FloorworX manufacturing facility is structured to quickly ramp up local manufacturing should this be required for large public sector projects.

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