AEEI’s business model, investment approach and philosophy resulted in it acquiring control of the majority of its operational investments as well as holding minority equity in strategic investments. This enables it to add value through its extensive expertise and networks, while promoting an entrepreneurial culture within its management structure and staff. Through our assets and investments, we drive the businesses to become efficient on a sustainable basis, which generates revenue, dividends and cash flow to support the Group as a whole.
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One of AEEI’s key strategic objectives is to create sustainable value for all its stakeholders and to integrate sustainable development into strategy, management and reporting, with the objective of reducing the negative impact on the environment.
AEEI’s financial strategy is to grow through acquisitions and leveraging the existing portfolio by maximising the net investment asset base and improving cash generation, thereby growing income sustainably and managing its costs.
Through the Company’s achievement of economic growth and its social contract, it remains one of the few Company’s to have consistently topped the rankings in its sectors overall over the last few years and is placed as the number one empowerment Company in South Africa.
As a result of AEEI being recognised for its leadership qualities in the transformation of society and its innovative business model in South Africa, the Company continues to be invited to participate in a number of global forums and multilateral organisations.
AEEI’s strategic approach to risk is to regularly assess whether the risk process is effective in identifying and evaluating risks and to determine whether the business operations have managed the risks in line with the Group’s strategy while considering mitigation action and the overall sustainability of the business.
This strategy has served the Group well over the past few years and is reflected in the 2016 achievements listed below:
- Group profit grew to more than R285m from R186m;
- Group assets grew to more than R1,6bn from R1,3bn;
- A significant reduction in debt to equity;
- Solid cash management;
- Payment of regular dividends;
- Provided a safe and healthy workplace and strive to reduce the environmental footprint of products and operations and supported local communities;
- Engaged with and further develop diverse suppliers and enterprise development clients;
- Strengthened management systems that govern responsible operations;
- Pursued partnerships with key stakeholders and formed joint venture initiatives to promote localisation;
- Further identified opportunities for local manufacture and the promotion of skills transfer;
- Fostered equality within our work environment irrespective of gender, race, creed and other forms of diversity;
- Developed personal plans for employees and promoted performance management;
- Further promoted skills development and learnership programmes;
- Continued to build leadership capacity among women;
- Engaged with our staff at all levels provided us with the necessary feedback and input in understanding and responding to improving their skills and training needs; and
- Ensured full compliance with the changing regulatory requirements.
Following the Vision 2020 Vision strategic planning process in 2015 to reposition the Group’s next growth phase, the Group’s businesses are on track to deliver on its growth plans and goals towards the 2020 financial year. The following high-level key performance indicators are ongoing:
- Double revenue;
- Increase operating profit substantially;
- Increase operational cash flow significantly;
- Increase NAV significantly;
- Substantially increase or double total assets;
- Separate listing of the IT and food and fishing businesses after achieving R500m revenue or R80m profit targets;
- Regular payment of dividends to shareholders;
- Create medium- to long-term shareholder value;
- Develop positive director and stakeholder involvement in the strategy;
- Building the AEEI brand;
- Create employment and opportunities for employee growth; and
- Create a Group that leads in both profits and sustainable business practices.
The board of directors delegated the action plans to the Group’s executive management for implementation with clear deliverables. The Group’s executives provide feedback at the quarterly Board meeting on progress made.
AEEI continues to support the development of a positive public attitude towards increased innovation, the stimulation of new green enterprises, the upskilling of new and existing employees and managers, investing in research and development and developing research centres relevant to our industry and intellectual property.