JSE-listed ceramic tiles retailer Italtile has reported a systemwide turnover increase of 13% to R3.08-billion, while same-store revenue improved by 11% in its financial overview of the six months ended December 31, 2015.

During the period, six new TopT stores and  one CTM store were opened, bringing the group’s total network to 133 stores from 126 stores. The company spent R242-million on enhancing the quality of the property portfolio through an ongoing store upgrade programme and property acquisitions.

Italtile’s reported trading profit rose by 16% to R531-million, while profit from associates grew by 63% to R44-million, translating into a 21% increase in profit after tax to R430-million.

Basic earnings a share increased by 21% to 44.3c, while headline earnings a share grew by 22% to 43.4 cents. Inventories increased by 8% to R532-million to support stronger sales growth. Average selling price inflation was 4.7%.
 
Meanwhile, Italtile’s continued prioritisation of good stock management was reflected by the notable improvement in availability of high-demand items, as well as its enhanced range matrix and increased stock turn.

Optimum stock management across the business remained a key strategic discipline for the company, aimed at promoting customer satisfaction.
  
Cash and cash equivalent reserves at the end of the period were R351-million after capital expenditure, while increased stockholding and provisional tax payments totalled R109-million.

The Group's net asset value was 332c a share.

Trading Environment
The trading environment in the six months under review remained consistent with recent years, featuring moderate demand in the renovation and commercial projects markets, with little improvement experienced in the new-build segment as public- and private-sector spend continued to stall.

Italtile noted that the reporting period was characterised by general economic uncertainty, currency volatility and constrained disposable income – all factors that served to subdue consumer confidence. Price competition among industry participants also intensified.

However, the group assured shareholders that its high-profile offering, sound balance sheet and integrated supply chain provided a competitive advantage in retaining and gaining market share.

Historically, Italtile had delivered a better performance in the first six months of the financial year than the latter half. This was a function of robust trading in the second quarter, based on consumers having access to additional funds from bonuses and stokvel pay-outs and capitalising on in-store promotional activity during the festive season.

However, amid continued socioeconomic uncertainty and prolonged constraints on discretionary spend expected in the forthcoming period, Italtile believed it was likely that this trend would persist, with the second half proving increasingly challenging for all participants in the sector.