Italtile reported a slump in performance for the year ending June 2023 due to deteriorating trading conditions and reduced consumer affordability for home-improvement projects.
- The company’s system-wide turnover remained relatively flat at R11.5 billion, with a 1% increase compared to the previous period.
- Price inflation of 6.7% helped offset declining volumes at retail stores.
- Italtile faced challenges in competing for consumers’ disposable income, as alternative power generation and storage options took priority amidst ongoing load shedding in South Africa.
- The industry experienced a decline in demand due to unfavorable economic conditions and the end of the lockdown-related home improvement boom.
- Manufacturing inefficiencies, load shedding, declining consumer demand, and new market entrants contributed to weaker margins, with a 2.4% drop during the reporting period.
- Headline earnings per share (Heps) declined by 13% to 132.3 cents, reflecting the challenging operating environment.
- Trading profits also declined by 15%.
- Italtile announced a weaker final gross dividend of 21 cents, down from 27 cents in 2022, resulting in a total dividend of 53 cents, a 13% decrease compared to the previous period.
- The company’s share price has declined by 19.47% over the past year, reflecting market concerns about Italtile’s performance and the challenges faced in the industry.