I am extremely proud of AEEI’s financial performance for the year to 31 August 2016. This was an exciting year for the Group, despite operating within a challenging macro environment which included the impact the country’s constrained gross domestic product growth, rising unemployment and poverty levels, and experiencing the extreme drought. The exchange rate volatility is being monitored regularly and the negative impacts of the cost of imported products and services have been offset by the benefits of our exported products.
The fruitful, yet ongoing journey of AEEI, ranked as one of the most empowered and fastest growing BBBEE Companies listed on the JSE, should be a case study for future generations. The depth in dynamics that came into play during the growth and emergence of a successful AEEI is what makes me proud to be associated with the Group and proud to be the non‑executive chairman of the Board.
Our strong financial performance and positive future outlook – operationally and strategically – provides reliable anchors and relative defensive qualities to assure the continued delivery of stakeholder returns.
“Great things in business are never done by one person, they’re done by a team of people.”
VISION 2020 VISION
As mentioned previously – the year has indeed been challenging for AEEI, South Africa and Africans in general.
I am sure that you will appreciate the importance of our Vision 2020 Vision strategy and recognise both the honesty of the assessment on which it is based and the fundamental nature of the changes it is set to introduce. We are already seeing tangible positive outcomes as a result of the implementation of the strategy, as well as experiencing an increase in our acquisition pipeline.
What has not changed is the unique ability of the Group to continue to adapt to the evolving environment and to respond in a manner that reflects our values, skills, abilities and experience. However, the journey is not over – the Board’s compass remains firmly set on further creating sustainable, stakeholder value with sound growth year on year, with an increase in revenue, operating profit and total assets.
AEEI holds a strong financial position with continued solid investment returns for our stakeholders. We remain committed to extend our business beyond South African borders and have already made some inroads into Tanzania, Nigeria and Dubai and abroad, with plans to spread our roots to other African countries.
The Group also retains a firm focus on growing the AEEI brand and strengthening its market perception while expanding its margins. Read more about the operational and strategic investment progress.
TRANSFORMATION AT AEEI
Congratulations to AEEI on receiving not one, but two awards for our BBBEE credentials and financial performance. I am proud to say that AEEI’s black ownership percentage is close to 80%, of which approximately 33% are black women. It is also one of the only companies operating under the new BBBEE codes to score the full 15 points for management control.
AEEI evolved from a qualifying small enterprise through a process of strong organic and acquisitive growth into a multibillion-rand company and is now rated as a generic enterprise. For more information, refer to transformation.
The AEEI Group is extremely fortunate to have a strong, dedicated team working to grow our various business units. Our commitment to BBBEE and transformation remains imperative and is at the forefront of our agenda.
We are in the fortunate position to have an experienced, highly skilled, driven team of executive managers with a diverse skill set, complementing each other while working as a team. These managers have all contributed to the crafting and implementation of Vision 2020 Vision and have applied it to their respective business units to ensure delivery across all of our strategic focus areas. While they are experienced, the team is constantly approached to further enhance their skills through various accredited programmes.
The executive management team and their responsive and committed staff are tackling cost containment initiatives, the effects of a volatile exchange rate, consequences of extreme weather changes and new regulatory and compliance demands with vigour and determination. I am confident that the positive and effective manner in which we manage these and other challenges will contribute to the further enhancement of value for our stakeholders.
We have a highly competent management team under the leadership of Khalid Abdulla to steer the ship – this strong team takes ownership for the strategy, business performance, skills development and growth. Transformation is easier for some companies than for others, but it has been executed at AEEI as an ethos and the Group is thriving financially and an inclusive business model and strategy was adopted and shared by everyone during 2015.
This has not been easy to accomplish – it took many years of commitment, dedication and real hard work and continues to be a journey that we will be taking, especially in light of the new BBBEE codes.
SUSTAINABILITY AT AEEI
We address our material sustainability focus areas and its impact on our stakeholders by:
- Ensuring sound governance structures are in place and scrutinised regularly – refer to the corporate governance report.
- Focusing on transformation practices throughout the Group, not merely meeting BBBEE targets – refer to the transformation committee report.
- Meeting all the new and current regulations that govern our business practices – refer to engaging with regulators.
GOVERNANCE AT AEEI
The Group’s policies and charters are updated regularly to remain compliant with the relevant laws, rules, regulations, codes and standards including, but not limited to the JSE listings Requirements. AEEI has embraced King III and is preparing for the implementation of King IV.
We are also conscious of the implementation of the JSE’s requirement to increase female representation on the Board by January 2017. Currently, 44% of the Board is already represented by women.
It is with sincere appreciation that I thank our shareholders for their unwavering confidence in me as the non-executive chairman of the Board. The Group is privileged to have such strong supportive shareholders and I look forward to deliver on the next exciting phase of the Group’s development.
I would like to recognise the support and contribution of my fellow Board members during the year. I especially wish to thank Khalid Abdulla for his leadership, insight and dedication in realising the potential of our Group towards 2020 and beyond. Thank you also to the executive management teams and our employees, in the Group without whom we could not have achieved such positive growth.
“As we express our gratitude, we must never forget that the highest appreciation is not to utter words but to live by them.”
Professor Vukile Charles Mehana