Wrap Text
ITALTILE LIMITED
CONSOLIDATED RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 1999
COMMENTARY
THE BOARD OF ITALTILE LIMITED IS PLEASED TO REPORT SATISFYING GROUP RESULTS FOR
THE SIX MONTHS ENDED 31 DECEMBER 1999.
IN ITS EIGHTH CONSECUTIVE YEAR OF EARNINGS GROWTH, THE COMPANY HAS ACHIEVED
TURNOVER OF R238 MILLION (R183 MILLION), UP 30%. OPERATING PROFITS HAVE
INCREASED BY 46% TO R28,4 MILLION (R19,5 MILLION) AND HEADLINE EARNINGS
IMPROVED BY 46% TO 114,3 CENTS PER SHARE (78,4 CENTS), FOR THE SIX MONTH PERIOD
ENDED DECEMBER 1999.
DESPITE OPERATING IN A HIGHLY COMPETITIVE, PRICE-DRIVEN MARKET, THE GROUP'S KEY
OBJECTIVES WERE ACTIVELY PURSUED AND ENSURED ACHIEVEMENT OF EARNINGS GROWTH.
CONSISTENT IMPROVEMENT IN GROSS MARGINS, AGGRESSIVE COST CONTROL, A STRATEGY OF
INCREASING MARKET PENETRATION AND INTENSIVE INVESTMENT IN TRAINING HAVE
CONTRIBUTED TO THIS IMPROVEMENT IN PROFITS.
THE RECENT DECLINE IN INTEREST RATES, WHICH HAD A POSITIVE EFFECT ON CONSUMER
SENTIMENT, HAS ALSO IMPACTED FAVOURABLY ON GROUP PERFORMANCE, WHILE EXTREMELY
SUCCESSFUL SEASONAL SALES CAMPAIGNS SAW VERY AGGRESSIVE TARGETS EXCEEDED.
STOCK LEVELS ARE SATISFACTORY AND A REFLECTION OF A GROWING BUSINESS.
THE COMPANY REMAINS UNGEARED, WITH ALL CAPITAL PROJECTS FINANCED THROUGH CASH
RESERVES.
THE GROUP CURRENTLY OPERATES OUT OF 62 STORES. THE TWO STORES OPENED IN 1998 IN
SYDNEY, AUSTRALIA, HAVE PERFORMED EXTREMELY WELL, AND CONTRIBUTED TO GROUP
PROFITS. IN THIS REGARD THE COMPANY PLANS TO ESTABLISH ADDITIONAL STORES IN
THAT COUNTRY AND ANTICIPATES THAT A FURTHER 3 STORES WILL COMMENCE TRADING
BEFORE THE END OF 2000.
IN LINE WITH GROUP POLICY OF FORGING A LEANER PARENT OPERATION, WHILE
SIMULTANEOUSLY GROWING THE MARKET AND PROMOTING ENTREPRENEURIAL OPPORTUNITIES,
THE GROUP WILL EXPAND PRIMARILY THROUGH FRANCHISED OUTLETS. TO THIS END SEVERAL
GROUP OWNED STORES WERE FRANCHISED IN THE PERIOD UNDER REVIEW.
THE ITALTILE CENTRE STORES UNDERWENT A RE-BRANDING EXERCISE, AND IN GENERAL THE
GROUP'S STORES ARE BEING REVAMPED WITH A VIEW TO PROMOTING CUSTOMER CONVENIENCE
RECOGNISING THE NEED TO BE OPTIMALLY SITUATED IN TERMS OF ITS MARKET, THE GROUP
WILL LAUNCH ITS PREMIER NEW GENERATION FLAGSHIP IN SANDTON IN AUGUST 2000.
R3,1 MILLION WAS INVESTED IN TRAINING DURING THE PERIOD UNDER REVIEW,
EXEMPLIFYING THE CORE BELIEF THAT TRAINING IS KEY TO PROVIDING THE GROUP WITH A
SIGNIFICANT COMPETITIVE EDGE. THIS TRAINING, TOGETHER WITH RECOGNITION OF STAFF
ACHIEVEMENTS THROUGH A COMPREHENSIVE EQUITY AND INCENTIVE SCHEME, PROVIDES
EMPLOYEES WITH A REWARDING EMPLOYMENT ENVIRONMENT.
THIS INTERIM REPORT HAS BEEN PREPARED USING ACCOUNTING POLICIES CONSISTENT WITH
THOSE ADOPTED FOR THE PRIOR YEAR-END.
PROSPECTS
THE GROUP WILL CONTINUE TO FOCUS ON OPPORTUNITIES FOR EXPANSION IN SOUTH AFRICA
AND INTERNATIONALLY.
THE GROUP IS IN THE PROCESS OF REVIEWING AND IMPLEMENTING SIGNIFICANT CHANGES
FOR IMPROVEMENTS IN ITS INFORMATION TECHNOLOGY SYSTEMS TO SUPPORT ITS GROWTH
OBJECTIVES. THE ENHANCED SYSTEMS ARE EXPECTED TO BE IN PLACE BY THE END OF
2000. IN ADDITION TO BENEFITING CUSTOMER INTERACTION AND INCREASING ACCESS TO
INFORMATION, THIS IMPROVEMENT WILL PROVIDE AN OPPORTUNITY FOR MANAGEMENT TO
REVIEW AND FURTHER STREAMLINE OPERATIONS.
THE GROUP IS CONFIDENT THAT BY ADHERING TO ITS CLEARLY DEFINED VISION AND SET
OF VALUES, IT WILL MAINTAIN ITS GROWTH TREND AND DELIVER EARNINGS IMPROVEMENT
OVER THE REMAINDER OF THE FINANCIAL YEAR.
DIVIDEND
THE BOARD HAS DECLARED AN INTERIM DIVIDEND OF 23 CENTS PER SHARE, A 53%
INCREASE OVER THE CORRESPONDING PRIOR PERIOD. DIVIDEND COVER WILL REMAIN AT
AROUND 5:1 IN LINE WITH GROUP POLICY.
FOR AND ON BEHALF OF THE BOARD
G RAVAZZOTTI
CHAIRMAN
P SWATTON
C.E.O.
DIVIDEND ANNOUNCEMENT
NOTICE IS HEREBY GIVEN THAT INTERIM DIVIDEND NUMBER 67 OF 23 CENTS PER SHARE
HAS BEEN DECLARED PAYABLE TO ALL SHAREHOLDERS REGISTERED IN THE BOOKS OF
ITALTILE LIMITED AT THE CLOSE OF BUSINESS ON 3 MARCH 2000 AND WILL BE PAYABLE
ON OR ABOUT 6 APRIL 2000.
FOR AND ON BEHALF OF THE BOARD
P SWATTON
SECRETARY
16 FEBRUARY 2000
(RAND 000'S UNLESS OTHERWISE STATED)
ABRIDGED GROUP INCOME STATEMENT
UNAUDITED UNAUDITED AUDITED
6 MONTHS 6 MONTHS YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER % 30 JUNE
1999 1998 INCREASE 1999
TURNOVER 237 931 183 113 +29,9 342 910
TRADING PROFIT BEFORE
DEPRECIATION 31 044 21 441 +44,8 47 282
DEPRECIATION (2 595) (1 923) +34,9 (4 066)
TRADING PROFIT 28 449 19 518 +45,8 43 216
INTEREST RECEIVED 1 780 3 322 (46,4) 5 036
PROFIT ON SALE OF FIXED PROPERTY 174 - -
PROFIT BEFORE TAXATION 30 403 22 840 33,1 48 252
TAXATION (8 928) (8 441) (15 782)
PROFIT AFTER TAXATION 21 475 14 399 +49,1 32 470
OUTSIDE SHAREHOLDERS' INTEREST (369) (45) 564
EARNINGS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 21 106 14 354 47,0 33 034
NUMBER OF SHARES IN ISSUE (000'S) 18 311 18 311 18 311
EARNINGS PER SHARE (CENTS) 115,3 78,4 +47,0 180,4
HEADLINE EARNINGS PER SHARE (CENTS) 114,3 78,4 +45,8 180,4
DIVIDENDS PER SHARE (CENTS) 23,0 15,0 +53,3 35,0
RECONCILIATION OF HEADLINE EARNINGS
EARNINGS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 21 106 14 354 33 034
PROFIT ON SALE OF FIXED PROPERTY 174 - -
HEADLINE EARNINGS 20 932 14 354 33 034
ABRIDGED GROUP BALANCE SHEET
UNAUDITED UNAUDITED AUDITED
AT AT AT
31 DECEMBER 31 DECEMBER 30 JUNE
1999 1998 1999
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 156 413 127 721 139 370
OUTSIDE SHAREHOLDERS' INTEREST 872 675 503
157 285 128 396 139 873
EMPLOYMENT OF CAPITAL
FIXED ASSETS 116 586 87 550 102 729
NET CURRENT ASSETS 40 699 40 846 37 144
CURRENT ASSETS 93 114 84 574 88 780
LIQUID FUNDS 39 321 35 632 19 502
CURRENT LIABILITIES
- INTEREST FREE (91 736) (79 360) (71 138)
157 285 128 396 139 873
NET ASSET VALUE PER SHARE (CENTS) 859 701 764
CASH FLOW STATEMENT
UNAUDITED UNAUDITED AUDITED
6 MONTHS 6 MONTHS YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
1999 1998 1999
CASH FLOWS FROM OPERATING
ACTIVITIES 41 556 11 165 21 437
TRADING ADJUSTED FOR
NON-CASH ITEMS 34 153 21 154 47 176
WORKING CAPITAL MOVEMENTS 25 950 (8 304) (10 661)
CASH GENERATED FROM OPERATIONS 60 103 12 850 36 515
INTEREST RECEIVED 1 780 3 322 5 036
DIVIDENDS PAID (3 862) (2 380) (5 127)
TAXATION PAID (16 465) (2 627) (14 987)
INVESTING ACTIVITIES (21 737) (23 780) (50 916)
TO EXPAND OPERATIONS (16 710) (21 418) (37 348)
TO MAINTAIN OPERATIONS (5 027) (2 362) (13 569)
INVESTMENT OF MINORITIES IN
ITALTILE AUSTRALIA - - 734
NET MOVEMENT IN CASH AND
CASH EQUIVALENTS 19 819 (12 615) (28 745)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 19 502 48 247 48 247
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 39 321 35 632 19 502
REGISTERED OFFICE
THE ITALTILE CENTRE BUILDING, CNR HENDRIK VERWOERD DRIVE AND BURKE STREET,
RANDBURG 2194 (POBOX 1689, RANDBURG 2125)
TRANSFER SECRETARIES
MERCANTILE REGISTRARS LIMITED, 11 DIAGONAL STREET, JOHANNESBURG 2001
(PO BOX 1053, JOHANNESBURG 2000)
DIRECTORS
G A M RAVAZZOTTI (CHAIRMAN), P D SWATTON** (CEO), J COUZIS*, G COUSINS,
D H RABIN, SGALLI (ALTERNATE) *GREEK **BRITISH
Sharenet Sites 
