Johannesburg - Italtile spent R242 million in capital expenditure, more than doubling the amount of R109m spent in 2014, for the six months to December to improve its brand and to acquire property.
The investment made it possible for the company to consolidate its position as a leader in the industry.
Read: Italtile boosts revenue to R3bn
Italtile is home to established retail brands such as CTM, Italtile Retail and Top T.
“We have invested quite a lot in our store upgrades and property acquisitions. Investments were also made in IT (information technology) requirements related to the BOP (business optimisation programme). We are happy with the returns and I think our financial results are in line with our expectations,” said chief financial officer, Brandon Wood.
Benchmarks
Wood said the BOP was key to achieving the results. The BOP helped management to understand customer expectations as well as to establish defined benchmarks and measurements to gauge and improve the retail experience for customers. It also increased operational capacity and improved competencies and personnel capability at all levels.
Italtile, a leading franchisor and retailer of local and imported tiles, sanitaryware, bathware, laminated flooring and other related home-finishing products, increased its trading profit by 16 percent to R531m during the period. Basic earnings per share increased 21 percent to 44.3c, while headline earnings per share grew 22 percent to 43.4c.
Nick Booth, Italtile’s chief executive, said: “The reporting period was characterised by general economic uncertainty, currency volatility and constrained disposable income – all factors which served to subdue consumer confidence.”
Despite these challenges, he said the company did well under the circumstances.
The amount of cash on hand was R351m, up by 67.94 percent and turnover increased 13 percent to R3.08 billion .
The group has maintained its dividend cover of three times. An interim gross cash dividend of 14c a share was declared.
The company expects a difficult trading period in the second half of its reporting, said Booth.
Italtile operates through a total network of 133 stores, 16 of which are located in the rest of Africa.
Italtile shares were 0.44 percent higher at R11.35 at the close of the JSE yesterday.
BUSINESS REPORT