JSE-listed Accéntuate on Thursday said it has maintained its momentum in acquisitions as it continues negotiations with three to four potential bolt-on companies.

The group, which targeted the construction, infrastructure development and water treatment markets in South Africa, decided not to declare a dividend for the financial year ended June 2013, as it evaluated further acquisitions.

Speaking at a press lunch on Thursday, Accéntuate CEO Fred Platt said the reinforcement over the past year of the foundations across the flooring, chemical blending and water treatment businesses delivered a solid performance, enabling the company to move to the next phase of growth and development.

Accéntuate, through a 40%-owned joint venture (JV) formed with India-based ION Exchange Safic last year, had reported positive results from this venture to date and “validated the opportunities” that were identified in this sector.

Platt indicated that the JV partnership was “on track to become a significant player” within the water treatment market in South Africa and across Southern Africa.

“There are some immediate opportunities being pursued in the mining, heavy industry and effluent treatment areas, while some larger water-related infrastructural opportunities will be evaluated and targeted according to capacity and risk appetite,” he added.

In September, Safic acquired speciality metal treatment products supplier Degrachem – which was being integrated into the firms operations – in exchange for 3.66-million Accéntuate shares.

Accéntuate also bought out Suntup Wooden Flooring, for about R8-million, or 7.8-million shares, during the year to June. This company’s integration into the flooring segment was expected to provide firmer footing in the private sector.

The flooring business, which housed FloorworX aimed to expand its footprint in the private sector after being weighed down, particularly during the second half of the year, by a lack of government spend and delays in some government projects.

Platt noted that Accéntuate would continue to balance its private and public sector markets to ensure the group had a growing private sector market to offset declining public sector infrastructure spend in the run up to the elections next year, but remain a strong player in the public sector once spending accelerated.

He noted that much infrastructure had to be developed in South Africa, as well as in the other developing countries on the continent, and keeping a sound footing in the market would enable a “windfall” for the company when government re-evaluates its spending after the elections.

“We are [also] confident that pressure for increased government investment in critical areas of both healthcare and education will come through,” he added.

FINANCIAL RESULTS
Accéntuate maintained its profit growth momentum during the year to June 2013, after bouncing back into the black in the prior year.

The group posted profit for the year under review of R8.6-million, an 18% rise compared with the profit of R7.5-million the year before.

“Notwithstanding the difficult operating conditions that persist in our market, we have remained focused on the foundations across the flooring, chemical blending and water treatment businesses which have delivered a solid performance,” noted Platt.

He added that positive results had emerged from the group’s implementation of strategic positioning plans.

Accéntuate reported an increase in earnings a share to 8.38c in 2013, from the 7.19c reported last year, but headline earnings declined, from 9.79c last year, to 8.41c during the year under review.

Revenue increased marginally from R283-million in 2012, to R284-million in 2013.

He pointed out that macroeconomic conditions remained challenging within the domestic market, particularly the construction and related supply sectors of the economy.

“These challenges included the low levels of gross domestic product growth experienced during the first six months of 2013, a lack of government spending on infrastructure, reduced activity in the mining and related industries as well as currency volatility,” he commented.