Italtile warns of slower second half


Italtile warns of slower second half

Published Date: 2019-08-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Italtile warns of slower second half

The tile manufacturer will report a rise in full-year earnings despite a significant deterioration in trading conditions since April.

Italtile says it wasn't able to replicate the strong double-digit earnings growth it reported for the first half of its financial year in the second six months. However, it still expects to report positive growth when it reports back later this month.

In a trading statement, the tile manufacturer and retailer said the weak trading conditions experienced in the first half of the year persisted and deteriorated notably since April. High levels of personal indebtedness, rising unemployment and hikes in VAT, fuel and utility costs constrained the disposable income of consumers.

Still, efficiency improvements and cost cutting across the business, as well as the consolidation of Ceramic Industries and Ezee Tile for the full six-month period, have kept it afloat. Ceramic and Ezee fall under its manufacturing division, while its retail brands include CTM, Italtile Retail and TopT.

System-wide turnover, which includes the retail turnover of its franchisees, rose 15.2% to R10 billion in the year to end-June, while total retail store turnover grew 6.1%. It raised prices by about 2.7% over the year. Manufacturing sales rose 36.5% compared to the previous corresponding period, which included only nine months of trading following the Ceramic and Ezee acquisitions.

The group said its expected basic earnings per share (EPS) to rise by between 7% and 9% from the 95c reported last year, while headline EPS would be between 6% and 8% up from the 95c previously reported. The disparity between basic and headline earnings growth was attributable to net profits of R12 million realised on the sale of local properties.

Its results are due for release on 22 August. Its shares closed unchanged at R13 yesterday.

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