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ITALTILE LIMITED - Reviewed Condensed Group Results and Cash Dividend Declaration for the six months ended 31 December 2023

Release Date: 19/02/2024 07:15
Code(s): ITE     PDF:  
Wrap Text
Reviewed Condensed Group Results and Cash Dividend Declaration for the six months ended 31 December 2023

Italtile Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1955/000558/06)
Share code: ITE 
ISIN: ZAE000099123
("Italtile" or "the Group")



- System-wide turnover down 2% to R6,1 billion
  (2022: R6,2 billion)

- Trading profit down 17% to R1,1 billion
  (2022: R1,4 billion)

- Earnings per share down 15% to 67,5 cents
  (2022: 79,5 cents)

- Headline earnings per share down 15% to 67,2 cents
  (2022: 79,2 cents)

- Net cash up 76% to R1,5 billion
  (2022: R0,8 billion)
- Ordinary dividend per share down 16% to 27,0 cents
  (2022: 32,0 cents)

- Net asset value per share up 10% to 684,4 cents
  (2022: 620,6 cents)

- Store network 214 down 1% 
  (June 2023: 216)
  (December 2022: 214)

Founded in 1969, Italtile Limited is a Proudly South African manufacturer, franchisor and 
retailer of tiles, bathroomware and other complementary home-finishing products. The Group's 
retail brands are CTM, Italtile Retail and TopT, represented through a total network of 
214 stores, including six online webstores. The retail operation is strategically supported 
by a vertically integrated supply chain comprising key manufacturers and import operations 
and an extensive property portfolio.

Trading conditions remained challenging in the six months ended 31 December 2023 ("Review Period").

The global market for ceramic tiles was weak in many countries as macro-economic factors resulted
in a decline in demand after strong growth in the post-pandemic years. South Africa continued to 
record low economic growth in 2023, with high levels of unemployment and indebtedness, rising living 
costs and decreasing remuneration in real terms. In the building and construction sector, homeowners' 
investment sentiment and spend continued to be constrained by sustained high interest rates and 
elevated input cost inflation which impacted on affordability of products, installations and new 
build projects.

Competition remained intense across the industry. In the retail segment, big-box retailers continued 
to roll out stores while the number of independent stores trading in ceramic tiles continued to grow. 
In the manufacturing segment, tile producers based locally, in Zambia and Zimbabwe expanded capacity. 
Excess global capacity, weak demand and the significant reduction in shipping costs resulted in high 
levels of competitively priced imported product. The scheduled opening of a new manufacturer in 
Mozambique will undoubtedly lead to further competition during the year.

Mindful of the adverse trading conditions and consumers' price sensitivity, the Group continued to 
focus on its primary goal: namely, to deliver an unrivalled, added-value shopping experience for our 

Management's emphasis during the Review Period was on optimising investments in people, technology 
and capital expenditure projects across the business. Key to this focus was improving the execution 
of the sales strategy in the retail division, remedying the shortcomings reported in the manufacturing 
division over the past year, and extracting the projected benefits of recently commissioned large-scale 
capex projects.

Our retail stores are financially sound, underpinned by robust operating models. Encouragingly, the 
retail operation's results were creditable, given the high comparable base, fiercely competitive landscape 
and weak consumer demand. By continuing to meet our customers' expectations and desires for a beautiful 
home, our stores retained their leadership positions in their respective market segments.

While foundations were laid for internal improvements and efficiency enhancements, further progress needs 
to be achieved, particularly in Ceramic. Furthermore, the generally softer consumer demand, and 
over-stocked position of many wholesalers in the industry, increased competitive pressures. In the absence 
of strong volumes and optimal use of manufacturing capacity, this operation's cost base and profitability 
were severely affected, as inflationary increases could not be passed on to customers. Ceramic contributes 
significantly to Group profits, and hence its poor performance and 32% decline in profits had a sizeable 
impact on the results of the Group as a whole.

The Group's strong balance sheet and cash generative nature is evidenced by cash reserves of R1.5 billion 
(2022: R0.8 billion).

The Group's dividend cover is two and a half times. The board of directors of Italtile ("the Board") has 
declared an interim gross ordinary cash dividend (number 115) for the Review Period ended 31 December 2023 
of 27,0 cents per share(2022: 32,0 cents) out of income reserves to all shareholders of Italtile as at the 
record date of Friday, 8 March 2024. The dividend per share is calculated based on 1 321 654 148 shares 
(2022: 1 321 654 148 shares) in issue at the date of dividend declaration. The local dividend withholding 
tax is 20% ("twenty percent"). The net local dividend amount is 21,60 cents per share for shareholders 
liable to pay dividends tax and 27,0 cents per share for shareholders exempt from paying dividends tax. 
Italtile's income tax reference number is 9050182717.

Dividend declaration date                             Monday, 19 February 2024
Last day to trade cum the dividend                       Tuesday, 5 March 2024
Date to commence trading ex-dividend                   Wednesday, 6 March 2024
Record date                                               Friday, 8 March 2024
Payment date                                             Monday, 11 March 2024

Share certificates may not be rematerialised or dematerialised between Wednesday, 6 March 2024 and 
Friday, 8 March 2024, both days inclusive.

Consumer confidence is likely to remain depressed amid concerns regarding the outcome of the upcoming 
national elections. Furthermore, the weak economic growth and difficult trading conditions experienced 
during the Review Period are likely to persist for the remainder of the current financial year. The 
building cycle is only likely to recover once interest rates decline and consumer confidence is restored.

Management's focus in the next six months will be on improving performance. Our operations will remain 
strongly differentiated to provide a unique experience for our customers. Executing operational excellence 
will be our key driving force across our portfolio of retail and manufacturing assets.

Despite increased competition in the sector, our stores are uniquely positioned to deliver an unrivalled 
shopping experience. Our vertically integrated business model, local manufacturing supply and bespoke 
solutions of industry-leading fashionable products afford our operators a significant competitive advantage.

In our manufacturing operations there are opportunities to unlock internal efficiencies, optimise our human 
capital resource and leverage our investments in cutting-edge technology and equipment to recover market share 
and attract new customers.

Notwithstanding subdued consumer sentiment and constrained disposable income, management will continue 
to focus on the growth levers within the Group's control, by prioritising consistent innovation and 
investment in delivering industry-leading products and an unsurpassed shopping experience for customers.

It is critical that we grow volumes and optimise capacity utilisation to improve our efficiencies and 
to drive up profitability. Margin pressure is likely to intensify. Strategically managing margin and 
improving efficiencies including enhancements in productivity and cost leadership will remain key 

Resource security is of paramount importance, specifically to our manufacturing operations. Ensuring 
affordable, adequate and sustainable supply of energy will be a critical imperative in the forthcoming 

16 February 2024

The content of this short-form announcement is the responsibility of the directors. Shareholders are 
advised that this short-form announcement represents a summary of the information contained in the 
full announcement which is available at: 
and on Italtile's website at This short-form announcement was published on SENS 
on Monday, 19 February 2024.

The condensed financial statements were reviewed by PricewaterhouseCoopers Inc. ("PwC"), who expressed 
an unmodified review conclusion thereon. Shareholders are advised that, in order to obtain a full understanding 
of the nature of the auditor's engagement, and more specifically, the nature of the information reviewed, they
should obtain a copy of PwC's report available at the following link: or from the Company Secretary who is contactable at

Any investment decisions made by investors and/or shareholders should be based on a consideration of the 
full announcement as a whole and investors and shareholders are encouraged to review the full announcement, 
as detailed herein.

Both the short-form and full announcement are also available for inspection at the registered offices of 
Italtile and sponsor, Merchantec Capital, during business hours, and copies may be obtained at no cost on 
request from the Company Secretary, who is contactable at

Registered office: The Italtile Building, 72 Peter Place, Bryanston, Gauteng, 2191

Postal address: PO Box 1689, Randburg, 2125

Transfer secretaries: Computershare Investor Services Proprietary Limited

Company Secretary: Acorim Proprietary Limited

Sponsor: Merchantec Capital

Auditor: PricewaterhouseCoopers Inc.
Date: 19-02-2024 07:15:00
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