News dalla rete ITA

8 Febbraio 2018

Sud Africa

ITALTILE BUCKS MARKET TREND AND SEES ITS TURNOVER SOAR

Italtile saw trading profit leap as turnover soared in the six months to December 2017, despite consumer sentiment in SA being by and large depressed. The group will open more stores in South Africa and expand in East Africa and is exploring manufacturing prospects elsewhere in Africa, according to Italtile CEO Jan Potgieter. The home-finishings group pushed turnover up 22% to R4.3bn in the six months ended December 2017 as trading profit shot up 21% to R716m. Headline earnings per share of 48.6c were up 5%, as net cash of R562m rocketed 209%. Italtile chief financial officer Brandon Wood has said the results were affected by the acquisition of Ceramic Industries. But the buyout — which had also come with a majority stake in Ezee Tile Adhesives Manufacturing — will centralise warehousing and distribution across the group from which massive gains are to be made. Italtile has a network of 174 stores, 19 of which are located in the rest of Africa. The retail business is supported by a vertically integrated supply chain comprising key manufacturing and import operations and an extensive property portfolio. The real big news is the proposed "dramatic expansion" of the group into the rest of Africa. This included the roll-out of online stores to boost bricks and mortar operations. Poor supply chain issues had been resolved and the lower-end TopT and higher-end Italtile brands were doing "fantastically well", although conditions for the mid-market CTM brand remained "very tough" and were reliant on better economic growth in SA. According to management, the growth is sustainable and will possibly improve, especially after the buyout by Italtile of Ceramic Industries, a tile, sanitaryware and bathware manufacturer. This has boosted group revenues and provided a platform for further vertically integrating operations. Nevertheless, political uncertainty in SA meant new-build housing growth is limited. Homeowners in the renovations market continu to invest in their properties but at lower rates of spending. This has caused Italtile to improve the consumer experience in its stores and boost working capital through aggressive inventory management and cost controls. The group’s net asset value was up 29%, as dividends rose 6% in the period. But Wood has said that despite an improved political and economic outlook for SA "the macroeconomic environment will remain challenging" in the short term. The group plans to open at least another 10 stores in the next six months, bringing the total number opened during the full year to 22, exceeding the 20 stores previously committed to. (Business Day) (ICE JOHANNESBURG)