Italtile reports double-digit growth in testing market
DESPITE subdued consumer spending and high unemployment, JSE-listed Italtile posted a double-digit growth in earnings for the six months to end December.
The manufacturer, franchisor and retailer of tiles, bathroom ware and related products yesterday reported a 35 percent increase in trading profit to R968 million, up from R716m compared with last year, with the group attributing the positive result primarily to the integrated business model, which had evolved and adapted in the past five decades and to management’s unrelenting customer-centred focus.
The group’s system-wide turnover was up 23.3 percent to R5.3 billion while earnings per share increased by 14 percent to 55.4 cents a share, up from 48.6c compared to last year.
Its headline earnings per share increased by 13 percent to 54.7c, up from 48.6c.
The group declared a dividend of 22c a share, up by 29 percent compared with last year’s 17c.
Chief executive Jan Potgieter said that in light of the testing external environment, management’s deliberate strategy continued to be to focus on internal conditions within their control, by leveraging opportunities for growth within the business.
“Our key priorities were to better execute basic retail excellence principles, further improve the group’s working capital position and intensify cost leadership and margin management,” Potgieter said.
The group’s retail brands include CTM, Italtile Retail and TopT and are represented through a total network of 182 stores, including five online web stores.
The brand group said that its offering targeted homeowners across the LSM 4 to 10 categories.
Total retail store turnover grew 6.3 percent while like-on-like retail store turnover increased by 4.6 percent, with average selling price inflation estimated at 2.4 percent.
Manufacturing sales improved by 6.1 percent, with average selling price inflation for the review period estimated at 3.5 percent.
The group opened nine stores and closed three under-performing stores during the period and plans to open a similar number in the next six months.
The Italtile retail reported a double-digit sales growth and improved profits, stock turn and store productivity.
The group anticipated that trading conditions would remain very difficult in the next six months.
“Despite this adverse context, management is optimistic that in the shortterm there are further opportunities… over the longer-term, there is potential to grow the tile category in this country in line with South Africa’s global emerging market peers,” Potgieter said.
Italtile shares closed 0.08 percent lower at R13.29 on the JSE yesterday.