Italtile, a manufacturer, franchisor, and retailer of tiles, bathroomware, and other home-finishing products, lifted its dividend for the interim period ended December 2024, following a solid set of financial results and amid a cautiously optimistic outlook.
The listed group said that system-wide turnover remained stable at R6.1 billion, in line with the prior year’s figure of R6.1 billion.
-Headline earnings per share (HEPS) grew by 4% to 70.1 cents, compared to 67.2 cents in 2023.
-Earnings per share (EPS) increased by 5% to 70.6 cents, from 67.5 cents in the same period last year.
-Net cash rose 9% to R1.6 billion, up from R1.5 billion in 2023.
-Trading profit saw a 3% rise to R1.2 billion, compared to R1.1 billion in the previous year.
-Net asset value per share slightly decreased by 1% to 678.1 cents, compared to 684.4 cents in 2023.
-Store network expanded by 1% to 211, with new store openings and relocations boosting growth.
Italtile increased its ordinary dividend per share by 4% to 28 cents, up from 27 cents in 2023.
Italtile operates a network of 211 stores across South Africa, including seven online webstores, and offers a range of home-improvement products. The group operates through well-known retail brands including CTM, Italtile Retail, and TopT.
Chief executive officer, Lance Foxcroft, said: “The six‑month period was characterised by two distinct halves. In the first half (Q1), consumer confidence and spend in the building and construction sector remained subdued in the context of high interest rates and inflation, which restricted disposable income and discretionary investment, and impacted on the affordability of renovation and new build projects.”
“In the second half (Q2), consumer sentiment turned more positive subsequent to the successful and peaceful transition to the Government of National Unity (GNU), while homeowners’ disposable income increased as a result of two interest rate cuts, generally lower inflation levels and payouts released by the two‑pot pension fund reforms,” he said.
In this context, he said the group reported a notable uptick in sales in the latter part of the review period.
Looking ahead, Foxcroft said that the trading environment will remain very challenging while supply continues to exceed demand and distressed competitors resort to increasingly predatory tactics. Margins will remain tight.
“The improved consumer confidence and trading conditions experienced during the last three months of the period are tenuous and may not be sustained, as we do not expect further benefit from the released two‑pot pension funds, and we remain generally concerned about global trading uncertainties. Further interest rate cuts and lower inflation could start to impact positively on disposable income in the home improvement sector, however, consumer spend remains constrained.”
Foxcroft said that although the high cost of living will continue to weigh on South Africans, experience has proved that local homeowners prioritise their homes as their primary asset and invest in them when funds permit. “We expect this trend to persist, albeit that spend will be restrained.”
In the longer‑term, prospects for growth in the sector are relatively positive. “South Africa is under‑housed and the dynamics of the housing market are favourable, featuring a young, growing, upwardly mobile population with a strong aspiration to own a home.”
