Italtile, with retail brand CTM, Italtile Retail and TopT, expects its annual headline earnings per share (heps) to decrease by as much as 10.3% knocked by a weak consumer environment amid increased living costs.
“Homeowner confidence remains subdued in light of sustained high interest rates and inflation, and demand is at low levels across the industry,” it said, adding that in the context of low gross domestic product growth and weak consumer sentiment and spend, the building cycle downturn has yet to recover.
In a sales update and voluntary trading statement released yesterday for the year ended June, Italtile’s annual earnings per share (eps) were likely to be between 117.8% – 125.1 cents or between 5.6% to 11.1% down, while annual heps were expected to slide between 118.7 – 126.2 cents, a decrease of between 4.7% to 10.3%.
Italtile said the disparity between eps and heps was attributable to impairments of R15 million recognised on property assets during the review period.
Italtile said the retail division’s full-year results were 4.7% lower than the prior comparable year. The division recovered market share and performed better in the second half of the period than the first half. Full-year like-on-like sales decreased 2% compared to the prior period, with average selling price inflation of 2.1%.
Ceramic Industries continued to fight for market share in the difficult environment. Despite efficiency improvements in manpower, systems, quality and products, the business was not able to grow tile volumes and improve capacity utilisation to leverage economies of scale, which continued to impact negatively on Ceramic’s contribution to the group’s results.
Ceramic and Ezee Tile’s combined manufacturing sales decreased by 6% in value for the review period.
While Ceramic reported lower volumes and profits, Ezee Tile grew both metrics after completing commissioning of its new Vulcania facility. Combined average manufacturing selling price inflation was 1% for the period.
In the integrated supply chain, its import businesses International Tap Distributors, Cedar Point and Distribution Centre collectively reported an increase in sales value of 2%, with average selling price inflation of 3.7%.
“The group’s consolidated gross margin declined by 2.6%, in line with our efforts to support affordability for customers and compete for market share in the context of subdued demand and increased competition,” it said.
In the year ahead, Italtile said its focus would remain on gaining market share and executing operational excellence across its retail and manufacturing assets to improve competitiveness, drive growth, and enhance its industry leading position.
The group expects its annual results out on August 26.
The share price was 0.97% lower at R11.28 at 1pm yesterday having declined -29.86% in the past three years.
Anthony Clark, an independent analyst at Small Talk Daily, said on X that Italtile was a good company, but had many challenges to overcome such as Chinese competition and the Sasol 2026 gas crunch crisis.
“Not yet the time to rush in to #ITL. We need interest rates to fall and as the company itself has stated, it will only start to benefit six months post that first interest rate cut,” he said @smalltalkdaily.
BUSINESS REPORT