Italtile shares rise after dividend announcement
IOL - BUSINESS REPORT - COMPANIES / 26 AUGUST 2020 - 11.22 / SANDILE MCHUNU
DURBAN – Italtile’s share price rose nearly 14 percent yesterday after it said it would pay a dividend and despite it reporting a 21 percent decline in annual earnings, hurt by a once-off broad-based black economic empowerment (BBBEE) charge and the Covid-19 outbreak.
The share hit an intraday high at 9.30am of R12.50, before closing the day at R11.90.
Italtile’s share price rose nearly 14 percent after it said it would pay a dividend
and despite it reporting a 21 percent decline in annual earnings.
The manufacturer, franchisor and retailer of tiles, bathroomware and other related home-finishing products said for the year to end June its adjusted basic earnings per share (Eps) decreased by 21 percent to 81.5 cents a share while adjusted headline earnings per share (Heps) declined by 19 percent to 82.3c.
“Eps and Heps were adjusted for the once-off charge of R39 million related to the BBBEE transaction concluded in October 2019,” the group said.
Italtile declared a total gross ordinary cash dividend of 33c, down by 20 percent compared to last year’s 41c.
Its total system-wide turnover declined by 7 percent to R9.3 billion and retail store turnover declined 3.9 percent, with average selling price inflation estimated at 1.4 percent.
However, like-for-like retail store turnover, excluding sales of stores opened and closed during the period, decreased by 6.2 percent.
Before the lockdown period up to March 27, retail store sales were up by 5.4 percent year-on-year and during the lockdown only marginal sales were recorded in April.
Italtile said in May and June, store sales grew 3 percent and 11 percent, respectively. “Encouragingly, sales growth of 14 percent was recorded in July," the group said.
Its supply chain sales decreased by 6.1 percent and before the lockdown, sales had decreased 1.4 percent year-on-year.
Its manufacturing sales declined by 8.8 percent, with average selling price inflation estimated at 1 percent and before lockdown, sales were flat year-on-year.
The group also reported a 16 percent decline in trading profit to R1.5bn.
Chief executive Jan Potgieter said in these extraordinary times, Italtile’s people had demonstrated energy, determination and resilience beyond expectations.
“Their enthusiasm to revive the business after lockdown and their continued commitment to curbing the spread of the virus to ensure uninterrupted service to our customers has been key to this solid set of results and the long-term sustainability of our business,” Potgieter said.
The group’s retail brands are CTM, Italtile Retail, TopT and U-Light, and are represented through a network of 198 stores, including six webstores.
Looking ahead, Potgieter said Italtile anticipated that economic conditions would remain extremely weak.
“We anticipate that the first six months of the new financial year will be very difficult while the impact of the pandemic persists.
"We are optimistic that the second six months commencing in January 2021 will be more robust, particularly since the comparison will be against five months of trading in financial year 2020,” Potgieter said.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER