Home improvement demand holding up in 2021, says Italtile

Bathroomware company Italtile, which owns CTM and U-Light, says it continues to benefit from increased pandemic-induced demand for home improvement, expecting a more than two-thirds rise in profit in its financial year should conditions persist.

More time at home, less spending on travel and entertainment, as well as low interest rates have all been cited as factors behind strong sales growth for Italtile, which earned almost as much headline profit in its half-year to end-December than in the preceding full financial year.

Should trading conditions persist, Italile expects headline earnings per share to rise by at least 70% in its year to end-June 2021, implying a profit rise of at least R680m.

Total retail store sales grew 18.5% for the nine months to end-March, the group said in a trading update, with manufacturing sales up by just more than a quarter.

Italtile has said previously it was also benefiting from its manufacturing capacity during Covid-19, with the industry facing “severe delays and dysfunctionality at national ports”.

Italtile has also been affected, but gets about 80% of its product from local suppliers, including its own factories.

It has cited this as a factor behind market share gains, adding it was also benefiting from hands-on management, seeking to ensure customers felt comfortable in stores during the pandemic.

“The group’s high profile, reputable brands are viewed by our customers as trusted household names, and the rigorous risk mitigating measures implemented to ensure a safe shopping environment, while offering exceptional value and fashion, reinforced this perception,” Italtile said in its statement on Friday.

Italtile’s shares have gained in line with the JSE so far in 2021, with both up about 14% before markets opened on Friday. Over the past 12 months, Italtile has risen 54%, compared with a 40% gain for the local bourse.

In morning trade, Italtile was up 3.24% to R17.50, on track for its fourth day of gains.

Update: April 16 2021

This article has been updated with share price information.

gernetzkyk@businesslive.co.za