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Italtile reports solid results

Johannesburg - Italtile [JSE:ITE] has reported solid results for the year ended  June 30 2013.

The group’s national branded retail store network comprises 117 CTM, Italtile Retail and TopT stores.

The brands are supported by a property investment portfolio and vertically integrated supply chain.

“Both the retail operations and the supply chain grew revenue and profitability and gained market share amongst new and existing customers," according to chief financial officer Brandon Wood.

Higher sales volumes were achieved primarily in the DIY/renovations and commercial projects markets.

Central to this growth were more fashionable ranges, a deliberate strategy to upsell complete solutions of products.

"Improved profitability was achieved through continuous and consistent efficiency improvements in the business,” he said.

General economic uncertainty continued to constrain public and private sector investment in the new-build segment of the industry, although some improvement in the renovations market was experienced.

In the context of subdued global trading conditions, a sustained influx of imported product remained a feature of the local industry.

Currency volatility experienced during the period served to strain working capital of smaller businesses, restricting their investment in inventory.

"The Group’s policy of ensuring consistent levels of stock on hand, therefore, facilitated by its strong balance sheet, proved to be an important competitive advantage," he said.

Italtile's system-wide turnover increased 11% to R3.82bn and revenue from group owned stores and entities grew 16% to R2.05bn.

Reported trading profit improved 18% to R611m.

"For the full year, gross margins declined slightly, a function of the group’s decision to absorb increased costs and currency fluctuations to support franchisees and customers," he said.
 
Basic earnings per share for continuing operations increased 18% to 48.2 cents, while headline earnings per share (Heps) for continuing operations rose 16% to 47.3c per share. Heps have been adjusted for a R13m profit achieved on the disposal of property in South Africa and a R5m impairment on group property in Australia.

Capital expenditure of R168m was incurred, primarily related to enhancing the Group’s property investment portfolio and revamping showrooms.

A final dividend of 8.0 cents per share has been declared, which together with the interim dividend of 8,0c, produces a total dividend declared for the year of 16c, an increase of 14% compared to 2012.

Furthermore, a special dividend of 50c per ordinary share has been declared. 
 
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