Divisional reviewsTrading and distributionCommercial Products

All operations experienced difficulties in varying forms, from riots, floods, supply chain issues, the consequences resulting from the pandemic, exchange rate volatility, major power supply disruptions, as well as continued consumer spending pressures. It is a tribute to all divisional employees, where their continued health and wellness has been the key success over the past year, that a record set of results have been achieved. This is a good demonstration of the versatility of the businesses and the ability of the leadership to effectively execute and deliver strategically considered plans. Margin management was superb and expense management exemplary.

The Trade cluster, which includes the electrical and plumbing businesses, delivered another stellar result. Private sector infrastructure spending in SA supported demand to some degree, and the electrical businesses produced record profitability as SA’s rapidly advancing renewable energy programme gained momentum. Plumblink is successfully continuing its expansion programme, with double-digit growth delivered. There have been 15 new stores openings, bringing the current footprint to 130 outlets, and a new distribution centre for the Gauteng region is being developed. A major competitive advantage is the scale as well as the availability of stock and the increasing presence of its own (Plumbline) range of products.

The DIY/Tools/Workwear cluster’s contributions were excellent with modest revenue growth amplified by excellent gross margin improvements. Capacity was added to the workwear factory and the revival of the local textile industry boosted demand for relevant product. G Fox’s capital upgrade has been completed, leading to some 400 new work opportunities being created, and better positioning to secure export orders. Berzacks had an excellent year and the Coats (thread and yarn) agency was secured to include consumables in their product mix. Matus produced an excellent result following its strategically considered programme of product simplification and a customer centric focus. Academy Brushware delivered another excellent performance.

Within the Leisure cluster, Yamaha had a pleasing year, and its retail strategy is starting to deliver positive results. In the Industrial cluster, Bidvest Afcom increased revenue and trading profit with the agricultural and online sectors performing well. Bidvest Buffalo Tapes and Renttech are undergoing restructure processes. Bidvest Materials Handling’s offering has been enhanced with the bolt-on acquisition of the A2 Group. Vulcan has initiated an enhanced focus on its core customer base, and to restore profitability.

Looking forward

The operating environment is likely to remain muted, with consumer spending and a lackluster economy still major factors impeding real growth. Supply chain concerns and load shedding remain disruptive.

Notwithstanding subdued activity in public infrastructure, the mining, agriculture and renewables sectors continue to present growth opportunities. Product substitution will likely continue given material price increases.

Ongoing strategic agility, focused leadership, cost control and margin management will remain critical to ensure continued, strong profitability.