Italtile, the maker of tiles and home products whose retail brands include CTM, says it will pay an additional dividend to shareholders thanks to its growing cash pile.

“Notwithstanding the exceptionally difficult trading conditions experienced over the past year, the group has recorded a creditable performance,” it said.

The group said on Thursday that despite the tough retail environment, total turnover rose 15% to R10bn in the year to end-June and trading profits grew 18% to R1.8bn. Headline earnings per share rose 7%.

The increase in profits meant net cash on Italtile’s books increased 77% to R1.2bn.

The company said it would pay an ordinary dividend of 41c a share, an 8% increase. It would also pay out a special dividend of 50c a share, a 67% increase from a year before.

“In light of the group’s strong cash-generative nature and cash reserves being in excess of operational requirements, the board has declared a special cash dividend in celebration of 50 years” of business, it said.

Italtile said its CTM chain was showing signs of a turnaround, while Italtile Retail and TopT performed well.

However, tile sales generally “failed to live up to our expectations”. Weak retail demand and excess stock in the market “impacted negatively on capacity utilisation at Ceramic’s factories”.

The group said an economic recovery in SA was unlikely anytime soon, which meant consumer spending would remain constrained.

“Despite the very testing operating environment, we remain optimistic that those factors within our own control provide prospects for growth, and we will continue to invest accordingly.”

The company plans to open 15 stores in the next financial year and will bolster its supply chain.

“We anticipate that the group will deliver growth for the full year. Given the high base effect, we expect that growth in the first six months is likely to be lower than growth in the second half of the year.”