Italtile takes a hit in tight economy
The group is in a good position to ride out the slump, analyst says
Italtile says trading conditions and consumer sentiment continued to deteriorate over the year to June 2017 as a result of poor economic growth in SA amid political uncertainty. The franchisor and retailer of locally made and imported tiles, sanitaryware, bathware and flooring says this has caused an industry-wide fall in sales, as price competition and margin pressure has intensified. In this “adverse environment” homeowners have curtailed or deferred discretionary spend on improvements and renovations. Meanwhile, the new-build segment had fallen further, with a marked decrease in building plans passed. “In the light of a very difficult market, Italtile produced credible results given siren warnings issued by Cashbuild [nominally a competitor firm] six months ago,” said Vunani Securities small and medium market cap analyst Anthony Clark. He said a slowdown in the sector after years of good growth showed that consumers — including those in rural areas who had helped drive a lengthy ...
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