Italtile lowers growth outlook due to SA’s depressed prospects
The group expected revenue to pick up in its second half to end-June, but says escalating living costs could derail this
Bathroom-ware company Italtile, which owns CTM and U-Light, said on Friday that it had given up hope for an improved second-half performance as SA consumers battle escalating living costs and limited wage inflation.
The group said in a trading update on Friday that system-wide turnover grew 1.4% to R5.4bn in its half year to end-December and it was now expecting a similar performance in its second half.
System-wide turnover refers to group turnover, including franchisees, but excludes sales from owned supply chain businesses to its stores.
“Consumer confidence and investment sentiment remained subdued in the absence of transformational economic and sociopolitical reforms, continued policy uncertainty and an increasingly unstable power supply,” the company said.
Household discretionary spend also remained severely constrained in the context of escalating living costs, limited wage inflation, high levels of personal debt, retrenchments and unprecedented unemployment rates, Italtile said.
Italtile expects headline earnings per share (HEPS) to be either flat or rise just 2% to 55.8c for its half year to end-December.
The company had faced a one-off cost of R39m during the period related to a broad-based BEE (B-BBEE) transaction.
Excluding this transaction, HEPS are expected to rise by between 6% and 8%, the company said.