The future

Improved cash utilisation will be a priority as high interest rates become the defining feature of the new business landscape. Many of our products and services fulfil basic customer needs and are only “discretionary” to a limited extent. It will be a challenge to maintain current levels of revenue and trading profit growth. However, that is our target for 2009.

To achieve this goal we will leverage our key strengths – national representation and closeness to customers. The process of branch relocation, refurbishment and the opening of new outlets will continue. Simultaneously, we will institute a wide-ranging review of all product ranges; supporting proven winners, replacing “tired” lines and introducing new solutions.

To leverage the breadth of our resources and expertise, Voltex plans to further develop a project-ownership concept whereby we take overall responsibility for a major initiative on behalf of large customers and integrate the contributions of other suppliers and contractors until a total solution is offered. We have already piloted this concept. Initial results were highly encouraging, indicating strong potential for further development of project-driven business.

Voltex will pursue higher margin business through the creation of a national centre of excellence dedicated to the supply of new-generation solutions demanding a high level of technical expertise.

The clothing industry will remain challenging. Further diversification may be necessary to counteract increasing competitive activity in core business areas.

Our stationery and office furniture businesses maintained solid momentum, but indications are that the trading environment will soon be impacted by falling business confidence, consumer pressure and the cash-flow constraints facing our customers. However, the flagship Waltons brand is well positioned for continued growth in a tighter market thanks to the success of recent restructuring and the introduction of additional product categories.

The corporate project sector of the office furniture market has enjoyed strong growth for two years, but there are increasing signs of a slowdown. Efforts will be redoubled to strengthen the order book.

New products developed by Seating made a favourable impression when unveiled at an industry fair in China. Interest was expressed by companies in several international markets. These export opportunities are being pursued.

In our packaging closures business, Afcom is well placed to derive benefit from recent consolidation while capital investment at Buffalo Executape has strengthened its competitive position. The business environment remains challenging, but the rebalanced companies will look to maintain recent momentum.

Following a disappointing year, Vulcan will strive to optimise all opportunities flowing from hospitality industry expansion as South Africa prepares to host the FIFA World Cup. Many players in the hospitality industry are expected to add to or refurbish their kitchens and related facilities.

Continued infrastructure investment by government and the nation’s preparations for 2010 will help to sustain business activity in a challenging high-interest rate environment. The division will optimise these opportunities to secure a measure of growth in the domestic market while looking to grow in selected export markets. Several divisions have investigated sales potential in international markets and are confident of making inroads.