Listed supplier of ceramic tiles Italtile said its total retail store sales increased 5% in the 5 months to end November. Supplied
Listed supplier of ceramic tiles Italtile said its total retail store sales increased 5% in the 5 months to end November. Supplied

Italtile's sales up by 5% despite pessimistic consumer sentiment

By Sandile Mchunu Time of article published Dec 12, 2019

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DURBAN - Listed supplier of ceramic tiles Italtile yesterday said its total retail store sales increased 5 percent in the five months to end November as a result of constrained discretionary spend and pessimistic consumer sentiment in the local market. It said in its operational update that like-for-like retail store turnover was only up by 2 percent.

The group said that trading conditions remained unfavourable in some units' export markets, particularly Zimbabwe and Zambia.

“In the weak-demand environment, the creditable retail turnover growth achieved is attributable to management’s unwavering focus on improving the customer experience and driving sales through continued investment in people, technology, store layouts, merchandising and range,” the group said.

The sales update includes contribution from Ceramic Industries, in which Italtile holds a 95.47percent stake, and Ezee Tile Adhesive Manufacturers in which it controls 71.54percent.

The group said sales related to Ceramic and Ezee Tile are referred to as “manufacturing” sales to distinguish them from “retail” sales reported by its retail brands, such as CTM, Italtile Retail, TopT and U-Light.

In the year-to-end-June results, Italtile reported a 15.2percent increase in total system-wide turnover to R10billion, with total retail store turnover increasing by 6.1percent and like-on-like retail store turnover increased by 4.2percent. It said manufacturing sales increased by only 1.4percent and its trading profit increased by 18.4 percent to R1.80bn, with average selling price inflation estimated at 2.7percent in the retail operation and 3percent in manufacturing.

Yesterday the group said manufacturing sales were flat, compared to the previous corresponding period, while general softer retail demand and overstock position of tile wholesalers in the industry continued to impact negatively on sales. It said that it remained optimistic that it would deliver growth for the full financial year.

“While weak macroeconomic conditions are concerning and challenging, we are satisfied that those factors within our control provide opportunities for growth. We anticipate that growth in the second six months of the current financial year will be higher than that of the first six months,” the group said.

Italtile shares closed 0.78percent lower at R14 on the JSE yesterday.


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