Italtile ends challenging period with special dividend for 4th year in a row
ITALTILE, the manufacturer and retailer of tiles, bathroom ware and other home-finishing products, more than doubled its final dividend to 25 cents a share from 10c, and it will also pay a special dividend of 50c.
It is the fourth consecutive year the group has been able to pay a special dividend, chief executive Jan Potgieter said in a telephone interview yesterday at the release of the group’s annual results to June 30.
He said the decision to pay a special dividend was taken after headline earnings a share increased 77 percent to 140.1c, the strong cash-generation capabilities of the group were proven again, and after consideration of prospects for the year and capital expenditure requirements of R800 million to R900m in the new financial year.
In the past year, system-wide turnover
was up 25 percent to R11.6 billion. Trading profit was up 70 percent to R2.6bn. Net asset value per share was up 21 percent to 554c.
“Our business performed extraordinarily well under very tough conditions,” said Potgieter.
The challenges included long logistics delays and rising costs on imported product, which had not yet subsided, and Italtile was fortunate in that 76 percent of its product was manufactured locally, he said.
On the retail side, the group operates 206 stores, including six online web stores. A store expansion into East
Africa slowed because of Covid-19-related logistics issues in the past year, but would likely proceed in the new financial year, said Potgieter.
He said enforced work-and-studyfrom-home during the pandemic had fuelled a major home-improvement boom, but there was no certainty when this trend would slow.
Consumers had also become more risk-averse, increasing online transactions, and when in-store, gravitating to trusted brands.
He said even if the market did not grow substantially in the new year, internal efficiency and other improvements
could be counted on to keep the group growing.
“Our business model is well suited to these trends. Our offering is supported by multi-channel trading platforms. Our market-leading brands are trusted household names. The integrated supply chain provides a complete product basket.”
The internal initiatives over the past year included opening 13 new stores, closing four non-performing stores, and advancing the revamp programme. Stock turn, product mix and range were improved.
Technology was leveraged across all
trading platforms and in the integrated supply chain, and enhanced the IT risk and control environment.
The five-year logistics and distribution programme progressed.
Teams were awarded more than R290m for increased productivity and exceptional contribution.
A leadership development programme continued to build a pipeline of talent, while a range of strategic management appointments were made in brand operations and in the IT and human resources divisions.
ItalTile shares closed 3.03 percent higher at R16.63 on the JSE yesterday.