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ITALTILE LIMITED - Preliminary profit announcement and reviewed Group results for the year ended 30 June 2013

Release Date: 14/08/2013 07:05
Code(s): ITE     PDF:  
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Preliminary profit announcement and reviewed Group results for the year ended 30 June 2013

Italtile Limited
Share code: ITE   
ISIN: ZAE000099123   
Registration number: 1955/000558/06   
Incorporated in the Republic of South Africa   
("Italtile" or "the Group" or "the Company")  
 
Preliminary profit announcement and reviewed Group results for the year ended 30 June 2013


  System-wide turnover analysis*                                                                      
  For the year ended 30 June 2013                                          Reviewed        Audited   
                                                                            year to        year to   
                                                                  %         30 June        30 June   
  (Rand millions unless otherwise stated)                  increase            2013           2012                                                                                                                                                                                                            
  Group and franchised turnover (continuing operations)                                              
  - By Group-owned stores and entities                                        2 047          1 759   
  - By franchise-owned stores (unaudited)                                     1 776          1 673   
  Total                                                          11           3 823          3 432   
  *Including discontinuing operations

  
  Store network                                                                                                                                                                                                                                                                         
  At 30 June 2013                    2013                                  2012                       
  Region                 Franchise    Other    Total            Franchise    Other    Total   
                                                                                                                                                                                            
  South Africa                                                                                
  - Italtile                     -        8        8                    -        8        8   
  - CTM                         39       27       66                   42       22       64   
  - TopT                        11        8       19                    7        8       15   
  Rest of Africa                12        5       17                   13        4       17   
  Australia                      -        7        7                    -        8        8   
                                62       55      117                   62       50      112   


  Condensed Group statement of comprehensive income                                                                                                                                                                                                                                                                                            
  For the year ended 30 June 2013                                                    Reviewed         Audited   
                                                                                      year to         year to   
                                                                            %         30 June         30 June   
  (Rand millions unless otherwise stated)                            increase            2013            2012                                                                                                                                                                                                                                   
  Continuing operations                                                                                         
  Turnover                                                                              2 047           1 759   
  Cost of sales                                                                        (1 241)         (1 063)  
  Gross profit                                                             16             806             696   
  Other operating income                                                                  241             228   
  Operating expenses                                                                     (451)           (405)   
  Profit on sale of property, plant and equipment                                          15               1   
  Trading profit                                                           18             611             520   
  Financial revenue                                                                        26              46   
  Financial cost                                                                          (17)            (24)  
  Income from associates                                                                   11               5   
  Profit before taxation from continuing operations                        15             631             547   
  Taxation                                                                               (168)           (155)  
  Profit for the period from continuing operations                         18             463             392   
  Discontinued operations                                                                                       
  Profit after taxation for the year from discontinued operations                           1               3   
  Profit for the period                                                    17             464             395   
  Other comprehensive income, net of taxation                                                                   
  Items that may be re-classified subsequently to profit or loss:                                               
  Currency translation difference                                                          13              31   
  Total comprehensive income for the period, net of taxation               12             477             426   
  Profit attributable to:                                                                                       
  - Equity shareholders of the parent                                                     444             378   
  - Non-controlling interests                                                              20              17   
                                                                           17             464             395   
  Total comprehensive income attributable to:                                                                   
  - Equity shareholders of the parent                                                     457             409   
  - Non-controlling interests                                                              20              17   
                                                                           12             477             426   
  Earnings per share: (all figures in cents)                                                                    
  - Earnings per share                                                     17            48,3            41,1   
  - Headline earnings per share                                            16            47,4            41,0   
  - Diluted earnings per share                                             18            48,2            41,0   
  - Diluted headline earnings per share                                    16            47,3            40,8   
  Earnings per share from continuing operations (all figures in cents):                                                
  - Earnings per share                                                     18            48,2            40,8   
  - Headline earnings per share                                            16            47,3            40,7   
  - Diluted earnings per share                                             18            48,1            40,6   
  - Diluted headline earnings per share                                    17            47,2            40,5   
  - Dividends per share                                                    14            16,0            14,0   


  Condensed Group statement of financial position                                                                                                                                                                                       
  As at 30 June 2013                                  Reviewed        Audited   
                                                       year to        year to   
                                                       30 June        30 June   
  (Rand millions unless otherwise stated)                 2013           2012                                                                                                                                                         
  Assets                                                                         
  Non-current assets                                     1 850          1 223   
  Property, plant and equipment                          1 246          1 154   
  Investments                                                4              4   
  Investments in associates                                553             24   
  Long-term assets                                          24             24   
  Goodwill                                                   6              6   
  Deferred taxation                                         17             11   
  Current assets                                           777          1 400   
  Inventories                                              335            339   
  Trade and other receivables                              121            126   
  Cash and cash equivalents                                303            917   
  Taxation receivable                                       18             18   
  Assets classified as held for sale                        26             -   
  Total Assets                                           2 653          2 623   
  Equity and Liabilities                                                         
  Share capital and reserves                             2 307          2 008   
  Stated capital                                           818            818   
  Non-distributable reserves                                93             82   
  Treasury shares                                         (474)          (478)   
  Share option reserve                                      40              9   
  Retained earnings                                      1 774          1 500   
  Non-controlling interests                                 54             77   
  Discontinued operations reserves                           2             -   
  Non-current liabilities                                   53            323   
  Interest-bearing loans                                    44            315   
  Deferred taxation                                          9              8   
  Current liabilities                                      293            292   
  Trade and other payables                                 252            224   
  Provisions                                                39             39   
  Interest-bearing loans                                     -             26   
  Taxation                                                   2              3                                                                              
  Total Equity and Liabilities                           2 653          2 623   
  Net asset value per share (cents)                        250            218   


  Group statement of changes in equity                                                                                                                                           Non-                                                                    Non-              
                                                                        distri-                  Share                   Discon-                   con-              
                                                             Stated     butable    Treasury     option    Retained        tinued               trolling      Total   
  (Rand millions unless otherwise stated)                   capital    reserves      shares    reserve    earnings    operations      Total    interest     equity                                                                                                                                                                                                                                                                                                                                                 
  Balance at 30 June 2011                                       818          51        (478)         5       1 241             -      1 637          70      1 707   
  Profit for the year                                                                                          378                      378          17        395   
  Other comprehensive income for the year                                    31                                                          31                     31   
  Total comprehensive income for the period                      -           31           -          -         378             -        409          17        426   
  Dividends paid                                                                                              (119)                    (119)        (12)      (131)  
  Transactions with non-controlling interests                                                                                             -           2          2   
  Share incentive costs                                                                              4                                    4                      4   
  Balance at 30 June 2012                                       818          82        (478)         9       1 500             -      1 931          77      2 008   
  Profit for the year                                                                                          444                      444          20        464   
  Other comprehensive income for the year                                    13                                                          13                     13   
  Total comprehensive income for the period                      -           13           -          -         444                      457          20        477   
  Dividends paid                                                                                              (141)                    (141)         (4)      (145)  
  Discontinued operations                                                    (2)                                               2          -                          
  Transactions with non-controlling interests                                                                                             -         (39)       (39)  
  Reinstatement of BEE share incentive reserve                                                      30         (30)                       -                      -   
  Share incentive costs (including vesting settlement)                                    4          1           1                       (3)                    (3)   
  Balance at 30 June 2013                                       818          93        (474)        40       1 774             2      2 244          54      2 298   


  Segmental report                                                                                                                                                                                                                                                                                                                                                         
  For the period ended                                                      Supply     Inter-                            
  30 June 2013                                                                 and      group                     Dis-   
  (Rand millions unless otherwise                     Fran-    Proper-     support     elimi-                continued   
  stated)                                 Retail    chising       ties    services    nations      Group    operations                                                                                                                                                                                                                                                     
  Reviewed year to June 2013                                                                                             
  Turnover                                 1 597          -          -       1 072       (622)     2 047            94   
  Gross margin                               585          -          -         116          -        701            36   
  Other income*                               29        211        231         135       (245)       361            -   
  Overheads                                 (485)       (92)       (61)        (58)       245       (451)          (35)  
  Trading profit                             129        119        170         193          -        611             1   
  Audited year to June 2012                                                                                              
  Turnover                                 1 365          -          -         939       (545)     1 759            86   
  Gross margin                               500          -          -         105          -        605            36   
  Other income*                               20        207        192         111       (210)       320            -   
  Overheads                                 (435)       (94)       (44)        (42)       210       (405)          (33)  
  Trading profit                              85        113        148         174          -        520             3   
  * Other income includes franchise fees, rentals, royalties and rebates received, as well as profit or loss on disposal
  of property, plant and equipment.                                                                                        


  Condensed Group statement of cash flows                                                    
  For the period ended 30 June 2013                                                                                                                                                                                      
                                                                  Reviewed        Audited   
                                                                   year to        year to   
                                                                   30 June        30 June   
  (Rand millions unless otherwise stated)                             2013           2012                                                                                                                                                                                           
  Cash flow from operating activities                                  376            226   
  Cash flow from investing activities                                 (694)          (148)  
  Cash flow from financing activities                                 (296)            -   
  Net movement in cash and cash equivalents for the period            (614)            78   
  Cash and cash equivalents at beginning of the period                 917            839   
  Cash and cash equivalents at end of the period                       303            917   


  Notes                                                                                                                    
                                                                                                                        
  1.    Commitments and contingencies                                                                                   
        As previously disclosed, legal proceedings have been instituted against Majuba Aviation Proprietary Limited, a 
	subsidiary company of the Group providing aircraft charter services, for which there is insurance cover.                                  
        There are no material contingent assets or liabilities at 30 June 2013 in addition to the above.
		
        Capital commitments at 30 June 2013:                     Rm                                                                                                                                          
        -  Contracted                                            34                  
        -  Authorised, not contracted                            92                  
        Total                                                   126                  
  
  2.    Changes in accounting policy                                                                                    
        The accounting policies adopted and methods of computation are in terms of International Financial Reporting 
	Standards (IFRS) and consistent with those of the previous financial year except for the adoption of new and
	amended IFRS and IFRIC interpretations which became effective during the current financial year. The application 
	of these standards and interpretations did not have a significant impact on the Groups reported results and cash
	flows for the year ended 30 June 2013 and the financial position at 30 June 2013.                                  
  3.    Investment in Ceramic Industries                                                                                
        As announced on 26 November 2012, the Group acquired a 20% stake in Ceramic Industries Limited (Ceramic) for R529 
	million following the acceptance of a joint offer by Rallen Proprietary Limited and the Group to independent Ceramic 
	shareholders. The investment is accounted for in accordance with the equity accounting requirements of IAS 28, 
	Investments in associates. Included in the Groups results are seven months earnings related to Ceramic, resulting 
	in a R9 million contribution to earnings.                                  
  4.    Purchase of non-controlling interests in Cedar Point Trading 326 Proprietary Limited                                  
        During the financial year, the Group acquired the 45% non-controlling stake held by the three previous business partners
	of Cedar Point Trading 326 Proprietary Limited at a cost of R39 million. Subsequent to year end, a 20% stake was sold to
	two new business partners identified during the financial year.                                  
  5.    Italtile Australia                                                                                              
        Following a thorough review of the Groups retail operations in Australia, management has decided to sell the retail 
	operations and was actively searching for a buyer at year end. The retail operations have thus been recorded as 
	discontinued operations in these results. Further, given the adverse economic conditions in Australia, the Group has 
	recorded a R5 million impairment on Australian property.                                                                                                                                                          
                                                                                              Reviewed        Audited   
                                                                                               year to        year to   
                                                                                               30 June        30 June   
                                                                                                  2013           2012                                                                                                                                                                                                                                                   
  6.    Earnings per share                                                                                              
        Reconciliation of shares in issue: (all figures in millions):                                                   
        - Total number of shares issued                                                          1 033          1 033   
        - Shares held by Share Incentive Trust                                                      25             26   
        - BEE treasury shares                                                                       88             88   
        Shares in issue to external parties                                                        920            919   
        Share numbers used for earnings per share calculations                                                          
        (all figures in millions):                                                                                      
        - Weighted average number of shares                                                        919            919   
        - Diluted weighted average number of shares                                                921            923   
        Reconciliation of headline earnings: (Rand millions):                                                           
        - Profit attributable to equity shareholders                                               444            378   
        - Profit on sale of property, plant and equipment                                          (13)            (1)   
        - Impairment of Australian Property                                                          5              -   
        Headline earnings                                                                          436            377   
        Reconciliation of headline earnings for continuing operations (Rand millions):                                  
        - Profit attributable to equity shareholders                                               443            375   
        - Profit on sale of property, plant and equipment                                          (13)            (1)   
        - Impairment of Australian Property                                                          5              -   
        Headline earnings for continuing operations                                                435            374   


OVERVIEW FOR THE YEAR ENDED 30 JUNE 2013
Italtile is the leading franchisor and retailer of local and imported tiles, sanitaryware, bathware, laminated
flooring and other related home-finishing products in South Africa. The Groups national branded retail store network comprises
117 CTM, Italtile Retail and TopT stores and has appeal for homeowners in the LSM categories 3 to 10. The brands are
supported by a property investment portfolio and vertically integrated supply chain.

TRADING ENVIRONMENT
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 as international suppliers sought new markets for their merchandise. Particularly evident in the port
cities, independent opportunist traders entered the market, many of them with minimal investment and unsustainable
offerings. The instability created by these players impacted negatively on more established businesses, contributing to 
further downsizing and closures in the industry.
Currency volatility experienced during the period served to strain working capital of smaller businesses with the
result that orders were only placed upon payment. The Groups policy of ensuring consistent levels of stock on hand,
supported by its strong statement of financial position, proved to be an important competitive advantage.

FINANCIAL HIGHLIGHTS - CONTINUING OPERATIONS
- System-wide turnover increased 11% to R3,82 billion (2012: R3,43 billion).
- Revenue from Group-owned stores and entities grew 16% to R2,05 billion (2012: R1,76 billion).
- Reported trading profit improved 18% to R611 million (2012: R520 million). For the full year, gross margins
  declined slightly, a function of the Groups decision to absorb increased costs and currency fluctuations to support
  franchisees and customers and demonstrate Italtiles everyday value positioning. 
  After a number of years of limited price inflation, average selling prices were increased in certain of the Groups
  operations, including CTM, TopT and ITD, to offset significantly higher input cost pressures in the supply chain, while
  Italtile Retails average selling prices were deflationary.
- Basic earnings per share for continuing operations increased 18% to 48,2 cents (2012: 40,8 cents per share) while
  headline earnings per share (HEPS) for continuing operations rose 16% to 47,3 cents (2012: 40,7 cents per share). 
  HEPS have been adjusted for a R13 million profit achieved on the disposal of property in South Africa and a R5 million
  impairment on Group property in Australia.
- Inventory remained stable at R335 million (2012: R339 million), this level of stock-holding is part of the
  deliberate strategy to ensure consistent availability of a large range of merchandise, and a function of adding new ranges while
  continuing to sell out older ranges. Average stock turn improved across most operations.
- Capital expenditure of R168 million (2012: R120 million) was incurred, primarily related to enhancing the Groups
  property investment portfolio and revamping showrooms.
- Notwithstanding the capital expenditure, the repayment of a R300 million long-term loan, and the acquisition of a
  20% stake in Ceramic Industries, cash reserves were R303 million (2012: R917 million), reflecting Italtiles strong cash
  generative nature.
- Net asset value per share increased by 15% to 250 cents (2012: 218 cents).

KEY TO THE GROUPS GROWTH
Italtiles improved results are a reflection of its commitment to continuous and consistent improvement in the
business and the dedication of our people.
- A range of structured best practice benchmarks across all core areas were refined, which delivered
  encouraging results. 
- Each of the brands focused greater attention on in-store efficiency improvements and training.
- Ranges were revisited and refreshed and ambitious targets implemented to maximise the average basket and sales of complete 
  solutions.
- Cost containment and profitability were instilled as key performance indicators, assisting operators to build more
  lucrative businesses.
- Throughout the supply chain improvements were evident in inventory and range management.
- Innovations in technology were a focus during the period, including improvements in the Groups online web-shopping
  capabilities, streamlined automated ordering systems, and in-store point-of-sales functionality.
- The policy of ensuring constant availability of the right stock at the right price afforded the Group a significant
  competitive advantage.
  
OPERATIONAL REVIEW
The Groups improved results were derived largely from organic growth, since a net increase of only five stores,
mostly opened in the latter part of the review period, was recorded. Both the retail operations and the supply chain grew
revenue and profitability and gained market share amongst new and existing customers. 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, and ensuring that these brands remained leaders in offering
best value (defined by consumers as fashion, quality, price and service).
In general, consumers remained cost conscious, and whilst the upper and lower LSM segments were reasonably buoyant,
middle income consumers were less resilient. This price sensitivity was responded to across the brand network: Italtile
Retail broadened its range to include appeal to the top end of the middle market, while CTM moved to increase its
commodity-priced range for the cost-conscious and contract markets. TopT, which operates in the entry-level sector has developed
its offering extensively for lower income earners.
Gauteng, North West, Mpumalanga and the Free State regions recorded good growth, while Limpopo and the coastal markets
lagged the other provinces.
Towards and after period end there was a transition of franchised stores to Group-owned stores as franchise agreements
ended. This development has provided an opportunity to re-invigorate underperforming regions.

ITALTILE RETAIL   
Italtile Retail is widely recognised as the industry fashion icon in the sophisticated home
improvement market and leading buyer of exclusive high quality fashionable international and local products. The brand has a
strong reputation as a trend-setter, and is the acknowledged front-runner in environmentally sensitive products. 
Key achievements:
- A pleasing rise in turnover, with particularly strong sales growth in the Bath Shop, and a gain in market share
  across the recently expanded product offering.
- Noteworthy success recorded in the Commercial projects market, including the healthcare industry; corporate head
  offices; the hotel industry; and local and regional shopping centres. It is particularly rewarding to report that products
  across the range were supplied, including tiles, sanitaryware and brassware.
- A new store will be opened at The Glen, in Johannesburg South, in the first quarter of the 2014 financial year.

CTM   
Catering for middle income DIY customers and small builders, CTM is the leading volume retailer of tiles, laminated flooring, 
brassware, sanitaryware, bathroom furniture and accessories.
Key achievements:
- Satisfactory sales growth, and a meaningful increase in operating profit in Group-owned stores based on efficiency
  improvements in the business. 
- Expansion of the range of imported merchandise as well as the contemporary natural stone-, wood- and cement-look tile offering
  and new size formats, differentiating the brand from its competitors. 
- In-store enhancements and intensified training and education of staff to ensure more beautiful displays and increased product 
  knowledge.
- The refinement of an operating model- The 9 Key Disciplines- which served to deliver improvements across all critical areas of 
  the business in four major categories.
- Upgrade of the internet shopping facility to serve as a fully functional operational online trading store which is integrated 
  into the Groups SAP system and all CTM stores nationwide. 
- The opening of two new stores, one in North Riding in Gauteng (October 2012) and the other in Crossroads in the Western Cape 
  (May 2013). 
- CTMs Operator Training Programme launched in 2012 in conjunction with the University of Stellenbosch yielded 11
  graduates- prospective store operators well qualified to manage successful businesses in the network.

REST OF AFRICA    
The Group is represented by 17 CTM stores in the rest of Africa region. Good growth was reported by
CTMs recently opened store in Kenya, as well as its existing stores in Tanzania, Namibia, Botswana and Lesotho.
Congestion in the East African ports and general logistical constraints continue to restrict growth of the CTM
network, despite robust demand from the region.

AUSTRALIA    
The Group has elected to discontinue its retail operation in Australia, which currently comprises seven CTM stores,
trading out of predominantly company-owned properties. Accordingly, a buyer for the retail brand component is currently
being sought, and the Groups future focus will be concentrated on management of the properties.

TOP T   
This brand is the Groups entry-level value offering, supplying home-finishing products including tiles,
paint, ceiling décor, vinyl floor covering, taps, sanitaryware, hardware and accessories to under-serviced rural and outlying
markets in close proximity to urban townships.
Key achievements:
- Following intensive refinement of the business model and strategy over several years, TopT delivered another strong
  performance, exceeding its budget and reporting record results and increased sales volumes across the product offering,
  demonstrating the brands expansion potential. 
- Operating in an extremely price sensitive market, the business succeeded in growing its average basket size based
  on a combination of aggressive pricing and pioneering new products and ranges. Increased focus was on expanding the
  home-finishing products offering.
- TopT opened a net of four new stores, and commenced its foray into the KwaZulu-Natal region. The brand will undertake an 
  aggressive roll-out campaign in the next five years. Master Licensees will be appointed on a regional basis and
  they, in conjunction with local black equity partners, will be responsible for growing the brand in their designated
  regions.

SUPPORT SERVICES   
The Groups vertically integrated supply chain comprises International Tap Distributors (ITD), an importer of brassware and 
accessories, Cedar Point, an importer and distributor of laminated flooring, cabinets, tiling tools and accessories, and 
Distribution Centre, which procures imported tiles for the retail brands and provides warehousing, distribution and foreign exchange
services to the Group.
Each of the suppliers played an important role in underpinning the brands by enhancing their fashion/value offering. The individual 
business units all reported improved sales and trading profit, although some margin squeeze was experienced as a result of the 
deliberate strategy to support the retail operations pricing advantage.
A new Distribution Centre was established in Cape Town during the period; this facility will play an important role in streamlining 
distribution and logistics of imported product in the Western Cape and should assist in improving the Groups performance in the 
region. Managements key challenge will be to ensure that the appropriate product (in terms of design and price) is sourced for this 
particular market. 

INVESTMENT IN ASSOCIATES
CERAMIC INDUSTRIES LIMITED(CERAMIC)   
As previously disclosed, during the period the Group acquired a 20% stake in its most significant supplier, Ceramic, a local 
manufacturer of tiles, sanitaryware and baths. This tactical investment to support Italtiles growth strategy has proved useful, 
particularly given the volatility of the currency related to imported product and the Groups stated goal to consistently carry 
optimum stock levels for customer convenience. Certain of Ceramics factories experienced production shortcomings in the reporting 
period, and whilst these have subsequently been addressed, Ceramics results for the seven months under-performed managements 
expectations, contributing R9 million to Group profit.

EZEETILE   
The Group has an effective 46% shareholding in Ezeetile, a national supplier of grout, adhesive and other products. During the year 
the business implemented SAP, facilitating alignment amongst Ezeetiles six factories, as well as with the Group. This development 
will ensure improved logistics and inventory management, and accordingly improved profitability is expected. Ezeetile contributed 
R3 million (2012: R5 million) to Group profitability for the reporting period. This decrease is attributable to the impact of 
commissioning new factory equipment, updating manufacturing processes, as well as the initial bedding-down of SAP; this 
trend should be reversed in the forthcoming period.

GLOBAL PROPERTY INVESTMENT
The Groups property portfolio supports its brands through high profile, easily accessible store locations, and well maintained 
aesthetically attractive shopping environments. Net of sale of properties the estimated current market value of this portfolio 
increased by R100 million to R1,6 billion. Capital expenditure in excess of R100 million was incurred on new and refurbished 
properties. An impairment of R5 million has been recorded on property in Australia, a reflection of adverse economic conditions 
in that country.

DIRECTORATE: APPOINTMENT OF CHIEF EXECUTIVE OFFICER
On 10 June 2013, the Board of Directors of Italtile (the Board) announced that the Groups Nominations Committee had been 
tasked with interviewing and appointing a Group Chief Executive Officer (CEO). Further to that announcement, the Board advised 
on 25 July 2013 that Mr Nicholas (Nick) Booth had been appointed as Group CEO with effect from 1 July 2014. Italtile founder, 
Mr Giovanni Ravazzotti will serve as CEO of the Group until Mr Booths effective appointment date, whereafter he will resume his 
position as non-executive Chairman.

PROSPECTS 
Innovation in both products and technology is key to retaining and growing market share. The Group will continue to commit 
resources to furthering its goal to be at the forefront of leading-edge trends and developments in order to provide its customers 
with a superior shopping experience and its shareholders with a satisfying return on investment. Efficiency and cost-containment 
drives will remain a priority, both in terms of improving profitability for the business as well as providing favourable 
pricing for customers based on a lower margin offering. 
Only limited improvement in the local economy is anticipated in the near future. Continued difficult trading conditions will be 
exacerbated by Rand weakness, and competition in the industry is likely to intensify. Based on continued efforts to enhance the 
quality of the business, the supply chain and retail brands are expected to continue to deliver growth for the forthcoming period. 
A better than average contribution is anticipated from TopT specifically, as the impact of the aggressive planned store roll-out 
programme filters through.
The management and staff of Italtile responded enthusiastically to the difficult economic environment and strategic initiatives 
implemented across the Group in the year under review. Their continued commitment to the vision and goals of the business is to be 
acknowledged and congratulated.

BASIS OF PREPARATION OF ACCOUNTING    
The Preliminary Profit Announcement has been prepared in accordance with the framework concepts and the measurement and 
recognition requirements of International Financial Reporting Standards and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and
contains the information required by International Accounting Standard 34, Interim Financial Reporting. These results have been 
prepared under the supervision of Chief Financial Officer, Mr B Wood CA(SA).

ORDINARY DIVIDEND   
The Board has declared a final dividend (no 94) for the year ended 30 June 2013 of 8,0 cents per Italtile ordinary share
(share) (2012: 7,0 cents per share), which together with the interim dividend of 8,0 cents per share (2012: 7,0 cents 
per share), produces a total dividend declared for the year ended 30 June 2013 of 16,0 cents per share (2012: 14,0 cents 
per share), an increase of 14%, to all shareholders recorded in the books of Italtile at the close of business on Friday, 
6 September 2013. The Group has maintained its dividend cover of three times.

SPECIAL CASH DIVIDEND   
The Board has declared a special dividend of 50,0 cents per share (2012: 0,0 cents per share) payable to shareholders.
The special dividend is part of the Groups plan to optimally employ its capital structure. Italtiles highly cash 
generative nature supports this strategy. In addition, the Group has no acquisitions planned for the immediate term.

CASH DIVIDEND TIMETABLE FOR ORDINARY CASH DIVIDEND AND SPECIAL CASH DIVIDEDN(COLLECTIVELY "THE DIVIDENDS")
The cash dividend timetable for the dividends is structured as follows: the last day to trade cum dividend in order to participate
in the dividend will be Friday, 30 August 2013. The shares will commence trading ex dividend from the commencement of business on 
Monday, 2 September 2013 and the record date will be Friday, 6 September 2013. The dividend will be paid on Monday, 9 September 2013.
Share certificates may not be rematerialised or dematerialised between Monday, 2 September 2013
and Friday, 6 September 2013, both days inclusive.

DIVIDEND ANNOUNCEMENT FOR ORDINARY CASH DIVIDEND AND SPECIAL CASH DIVIDEND 
Shareholders are hereby advised that the dividends will be subject to the Dividends Tax that was introduced with effect from 
1 April 2012. In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements, the following 
additional information is provided: 
 - The dividend has been declared out of income reserves. 
 - The local dividend tax rate is 15% (fifteen percent). 
 - There are Secondary Tax on Companies (STC) credits to be utilised to the amount of R13 161 580,80 million or 1,27370 cents per
   share. 
                                                                                          Ordinary cash dividend    Special cash dividend    
 Gross local dividend amount for shareholders exempt from the Dividends Tax               8,00000 cents per share   50,00000 cents per share       
 Net local dividend amount for shareholders liable to pay the Dividend Tax                6,99106 cents per share   42,50000 cents per share       
 Local dividend withholding tax amount for shareholders liable to pay the Dividend Tax    1,00894 cents per share    7,50000 cents per share   
    
 - Italtiles income tax reference number is 9050182717.
 - The Group has 1 033 332 822 shares in issue including 25 488 781 shares held by the Share Incentive Trust and 88 000 000 shares held as
   BEE treasury shares.

For and on behalf of the Board
G A M Ravazzotti                    B Wood
Chief Executive Officer             Chief Financial Officer

The Preliminary Profit Announcement has been reviewed by Ernst & Young Inc. (EY). EYs unqualified review opinion does not necessarily 
report on all of the information contained in this Preliminary Profit Announcement. Shareholders are therefore advised that in order to 
obtain a full understanding of the nature of auditors engagement, they should obtain a copy of EYs unqualified review opinion 
together with the accompanying financial information from the company secretary at the Companys registered office.

Johannesburg
14 August 2013

Registered office: The Italtile Building, cnr William Nicol Drive and Peter Place, Bryanston (PO Box 1689, Randburg 2125)   
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg 2001.
(PO Box 61051, Marshalltown 2107)   
Executive directors: G A M Ravazzotti (Chief Executive Officer), B G Wood (Chief Financial Officer)- P Langenhoven#   
Non-executive directors: S G Pretorius (Non-executive chairman), S M Du Toit, S I Gama, P D Swatton*, A Zannoni**   
(*British   **Italian   #Australian)   
Company secretary: E J Willis   Sponsor: KPMG Services (Pty) Limited.
 
www.italtile.com
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