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Johannesburg - In the six months ended December 31 2013, Italtile reported improved revenues across its retail operations and supply chain businesses, according to CFO Brandon Wood.
It gained market share across most of its merchandise categories.
Established 44 years ago, the group’s brand portfolio comprises Italtile Retail, CTM and TopT.
It is represented locally by a national network of 98 stores with a further 16 stores situated in the rest of Africa.
“In the context of subdued economic growth and intensified pressure on consumer disposable income, the renovations sector continued to experience greater activity than the new build sector, but generally, growth in these markets remained muted,” said Wood.
“Consumers in the middle income segment were particularly price sensitive, whereas our entry-level and premium-end customers demonstrated greater resilience.”
System-wide turnover grew 15% to R2.30bn. Revenue from group-owned stores and entities increased 31% to R1.37bn.
This was impacted by the conversion and contribution of nine previously franchised CTM stores to group-owned stores and the opening of one new CTM during the period.
Same-store turnover from comparable group-owned stores and entities increased by 15%.
The reported trading profit rose 22% to R379m, while headline earnings per share (Heps) grew 16% to 28.0 cents per share. HEPS have been adjusted for the post-taxation impact of a profit of R2.4m achieved on the sale of a property in South Africa and profit of R4.4m achieved on the sale of Allmuss Properties Zambia.
An interim gross cash dividend of 9.0 cents per share has been declared - a 13% increase.
Rest of Africa
Good growth was achieved in the East African region, with the recently opened CTM store in Nairobi trading soundly and a new CTM store opened in Tanzania.
Despite this performance and the strong demand from markets in the territory, logistical and infrastructural constraints continue to hamper expansion of the Group’s store footprint.
Sales in neighbouring countries, Swaziland, Namibia, Lesotho and Botswana also increased due to improved stock availability and an enhanced offering.
Australia
During the period the group disposed of its non-core CTM retail business in Australia via a facilitated management buyout.
The intention in the short term is to retain and manage this operation’s property portfolio.
Market conditions will determine the longer-term strategy regarding this investment.
During the period the group implemented an equity-settled staff share scheme.
Prospects
“Inevitably the durable merchandise market segment will face increasing pressure as discretionary spend tightens further and intensified price wars are likely to ensue," said Wood.
"In this environment, the group’s policy is to adhere to our year-round value offering position and prioritise operational and supply chain efficiencies to provide consumers with pricing advantages wherever possible.”
It gained market share across most of its merchandise categories.
Established 44 years ago, the group’s brand portfolio comprises Italtile Retail, CTM and TopT.
It is represented locally by a national network of 98 stores with a further 16 stores situated in the rest of Africa.
“In the context of subdued economic growth and intensified pressure on consumer disposable income, the renovations sector continued to experience greater activity than the new build sector, but generally, growth in these markets remained muted,” said Wood.
“Consumers in the middle income segment were particularly price sensitive, whereas our entry-level and premium-end customers demonstrated greater resilience.”
System-wide turnover grew 15% to R2.30bn. Revenue from group-owned stores and entities increased 31% to R1.37bn.
This was impacted by the conversion and contribution of nine previously franchised CTM stores to group-owned stores and the opening of one new CTM during the period.
Same-store turnover from comparable group-owned stores and entities increased by 15%.
The reported trading profit rose 22% to R379m, while headline earnings per share (Heps) grew 16% to 28.0 cents per share. HEPS have been adjusted for the post-taxation impact of a profit of R2.4m achieved on the sale of a property in South Africa and profit of R4.4m achieved on the sale of Allmuss Properties Zambia.
An interim gross cash dividend of 9.0 cents per share has been declared - a 13% increase.
Rest of Africa
Good growth was achieved in the East African region, with the recently opened CTM store in Nairobi trading soundly and a new CTM store opened in Tanzania.
Despite this performance and the strong demand from markets in the territory, logistical and infrastructural constraints continue to hamper expansion of the Group’s store footprint.
Sales in neighbouring countries, Swaziland, Namibia, Lesotho and Botswana also increased due to improved stock availability and an enhanced offering.
Australia
During the period the group disposed of its non-core CTM retail business in Australia via a facilitated management buyout.
The intention in the short term is to retain and manage this operation’s property portfolio.
Market conditions will determine the longer-term strategy regarding this investment.
During the period the group implemented an equity-settled staff share scheme.
Prospects
“Inevitably the durable merchandise market segment will face increasing pressure as discretionary spend tightens further and intensified price wars are likely to ensue," said Wood.
"In this environment, the group’s policy is to adhere to our year-round value offering position and prioritise operational and supply chain efficiencies to provide consumers with pricing advantages wherever possible.”
