MANAGEMENT
discussion + analysis REVENUE
During the 2015 financial year, revenue continued to grow, following our decision to focus on market spaces where we could make gains. The three per cent year-over-year increase in sales reflected double-digit growth in some key product areas offset by other factors such as the nearly half-year worth of revenue foregone due to the discontinuation of certain products . The discontinued products were those deemed to have the least growth potential . Therefore, these deletions placed the organization on a more competitive growth path. Indeed, when our process began in earnest in 2013, we saw considerable growth in revenue of 42 per cent over the previous year. This was followed by 10 per cent growth in 2014. And while sales growth for the entire 2015 appeared to have slowed in the year, during the last quarter of 2015, sales grew by 11 per cent over the same period in 2014.
GROSS MARGIN
The company’s gross margin improved from 34.2 per cent in 2014 to 35 per cent last year. This resulted from (on the one hand) the removal of certain products and (on the other hand) efficiency gains we are starting to realize from our capital investment programme. For example, we are seeing savings on energy since shifting a portion of our fuel source to liquefied petroleum gas (LPG). Improved quality assurance has also reduced the incidences of quality rejects.
EXPENSES
Last year, we increased the number of technical personnel, reorganized and increased our sales staff to better service our accounts. This aggressively positioned our brand in the market place, but also resulted in additional staff costs. We doubled our spending on advertising and promotions from $8.5 million to $16.8 million, in order to strengthen the brand for future growth.
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