Italtile warns shareholders of profit drop
DURBAN – Italtile stumbled more than 4 percent on the JSE yesterday after the group warned its shareholders that its profits could fall by up to a third for the year to end June as a result of the coronavirus (Covid-19) pandemic that hit its operations.
The country’s supplier of ceramic tiles said its earnings per share to decline between 20 and 30 percent from last year’s 102.6c while its headline earnings per share would ease between 18 and 28 percent to between 73.3c and 83.5c from 101.8c reported last year.
The group said the projections included a once-off charge of R39 million the group incurred related to the broad-based black economic empowerment transaction concluded with Yard Investment Holdings.
Italtile said its total retail store sales for the 48 weeks to end May decreased 5 percent while like-for-like retail store turnover declined by 10 percent compared to last year.
“The group’s results for the second six months of the current financial year, being January 1 to June 30 are best analysed in the context of the progression of the pandemic in our trading markets.” Italtile said.
“In the pre-Covid-19 era up to March 27 when the national lockdown was implemented, sales were on track with management’s stated target to deliver growth in line with the first six months of the current financial year, being July 1, 2019, to December 31, 2019.
However, subsequent to the commencement of the lockdown, sales across the manufacturing, supply chain and retail operations were severely impacted.”
The group said its forecast included the contribution of Ceramic Industries and Ezee Tile Adhesive Manufacturers.
Italtile said sales related to Ceramic and Ezee Tile were referred to as manufacturing sales to distinguish them from retail sales reported by Italtile’s retail brands such as CTM, Italtile Retail, TopT and U-Light.
It said that the manufacturing sales for the 48 weeks to end May were 10 percent lower when compared to last year and Italtile Retail’s sales were substantially lower than last year.
Italtile shares closed 4.12 percent lower at R10.25 on the JSE on Wednesday.