Johannesburg – Italtile, which provides local and
imported bathroom finishing products, grew system-wide turnover 14 percent to
R3.5 billion in the six months to December.
The group, which reported its trading profit up 12
percent to R594 million, said it was declaring a 16c a share dividend, which is
a 14 percent increase.
During the period, the company – home to CTM, Italtile Retail
and Top T – opened 11 new stores, taking its network to 156, 16 of which are
outside of South Africa on the rest of the continent.
CFO Brandon Wood says, “despite testing trading
conditions, the group’s Italtile Retail and CTM brands retained
market share across their trading regions and merchandise categories, while
TopT grew market share in its existing and new markets.
“Furthermore, improved turnover and profitability were
reported by each of the supply chain businesses, ITD, Cedar Point and
Distribution Centre, while the combined contribution of associates
Ceramic Industries and Ezee Tile to Group profit grew by 27 percent
to R56 million.”
Italtile notes it saw modest growth in renovation and commercial project
segments as economic conditions continued to weigh on spending.
It adds, opportunistic importers and established peer
competitors took advantage of sporadic rand strength, driving a strong influx of
imported product, thereby creating an over-stock situation across large
segments of the market. “As a result, price competition is expected to
intensify over the forthcoming months.”
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Wood comments, “we anticipate continued margin pressure over the next six
months based on planned deflationary price adjustments and anticipated slower
sales in the prevailing environment”.
Basic earnings per share gained 15 percent to 51.1c,
while headline earnings per share grew 7 percent to 46.6c.
The disparity in growth, says Italtile, is due to a gain
of R37 million realised on the disposal of Italtile’s Australian property
holding business, which together with local property disposal profits of R15
million, is excluded from headline earnings per share.
It spent R243 million – on par with the previous
comparable period – on enhancing its property portfolio and in IT systems.