Despite the improved outlook for South Africa and a gain in consumer confidence stemming from recent political events, retail company Italtile believes the macroeconomic environment will remain challenging in the short term.
Italtile management, however, anticipates its performance in the second half of the current financial year to be stronger than that of the second half of the prior year, as well as that of the first half of the current financial year.
Italtile's system-wide turnover for the six months to December 31, increased by 21.6% year-on-year to R4.3-billion.
Like-for-like retail store turnover for the period decreased by 3.9% compared with the prior corresponding period, with the average selling price deflation estimated at 1%.
Manufacturing sales for the period increased by 3.7% compared with the prior corresponding period with an average selling price inflation for the period estimated at 2%.
Trading profit grew by 21% year-on-year to R716-million, while basic earnings a share decreased by 4.3% to 48.6c and headline earnings a share increased by 4.7% to 48.6c.
The disparity between basic earnings and headline earnings growth is attributable to a gain of R37-million realised during the prior corresponding period on the disposal of the Italtile Australia property holding business; and a gain of R15-million realised during the prior corresponding period on the disposal of South African properties.
Capital expenditure of R313-million was incurred during the six months, primarily on enhancing the property portfolio, manufacturing facilities and store refurbishments to support the company's growth programme.
Twelve stores were opened during the period, bringing the total network to 174 stores.