Constrained consumers take a toll on Italtile

Bathroomware group Italtile expects its full-year earnings to decline by as much as 10% as the increased cost of living weighed heavily on consumers.

Italtile, whose retail brands include CTM, Italtile Retail and TopT, said in a statement on Monday that its headline earnings per share (HEPS) for the year to end-June would be between 118.7c and 126.2c, a decline of 4.7%-10.3% compared with the previous year.

The retail division’s full-year results were 4.7% lower than the prior year. The division recovered market share and performed better in the second half, it said.

Full-year like-on-like sales decreased 2% compared with the prior period, with average selling price inflation of 2.1%.

Ceramic Industries continued to fight for market share in the difficult environment. Despite efficiency improvements in manpower, systems, quality and products, the business was not able to grow tile volumes and improve capacity utilisation to leverage economies of scale, which had a negative effect on the unit’s contribution to the group’s results, it said.

Ceramic and Ezee Tile’s combined manufacturing sales decreased by 6% in value for the period. While Ceramic reported lower volumes and profits, Ezee Tile grew both metrics after completing commissioning of the new Vulcania facility.

Combined average manufacturing selling price inflation was 1% for the period.

In the integrated supply chain, Italtile’s import businesses, International Tap Distributors, Cedar Point and Distribution Centre, collectively reported an increase in sales value of 2%, with average selling price inflation of 3.7%.

The group’s consolidated gross margin declined by 2.6%, in line with efforts to support affordability for customers and compete for market share in the context of subdued demand and increased competition.

mackenziej@arena.africa