The Durban-based Trellidor [JSE:TRL] has seen a sharp 26% drop in its headline profits for the year to end-June, with group revenue down 4.5% to R515m.
The company said consumer spending was negatively impacted throughout South Africa and Africa, particularly among middle-income customers, which is its key market.
Its profit margin fell from 45.6% to 45.0% due to labour costs and higher imported material prices amid the rand's decline against the dollar.
Its Trellidor gates division saw revenue declined 3% to R322 million for the year, but income increased by 112% in the UK.
It secured a contract to install South African-made Trellidor gates - rated as the most secure in the world by a United Kingdom standards body - at London Underground stations.
The gate was tested by an independent standards body in the UK, which used a variety of tools to physically assault the gate. In the end, it was rewarded the so-called BRE Standard LPS 1175: Issue 7 SR3 - the highest certification received by a sliding security grille in the world.
Its Taylor subsidiary, which manufactures and distributes blinds and security shutters, saw revenue for the year decline by 6.7% to R194m. But its Durbanville franchise in the Western Cape, which was acquired towards the end of last year, saw a 38% increase in turnover for the period November 2018 to June 2019. The company is achieving more success selling Taylor blinds and shutters through its Trellidor network.
"We have embarked on several projects focused on improving the gross margin in Taylor, through material supply and efficiency enhancements. Cost savings are anticipated in the new financial year. The Group is more streamlined and has the capacity to significantly outperform in a more supportive economy.
The board believes the current share price undervalues the business and so will continue to buy back shares.
Compiled by Helena Wasserman