CE Gian-Paolo Ravazzotti said pressure on discretionary spending as a result of rising interest rates and high inflation was seen in lower traffic in the group's stores.
“With decreased capacity to spend, customers' buying decisions have become more conservative and focused on making value purchases. Provision of quality products is a strength of the group,” Ravazzotti said.
Italtile, which retails local and imported products, posted a 2% increase in profit to R399m from R393m a year ago, and a normalised increase of 8,4% in trading profit.
Headline earnings per share rose marginally to 34,4c from 33,9c, while the group declared a final dividend of 8c a share.
Despite slower market demand for its products, the group managed to decrease stocks by 19% to R263m from R322m.
Ravazzotti said that to harness the full potential of the brand faster, the two top-performing store operators got an equity incentive in the national Italtile brand. “We are confident that as shareholders they will focus on growing the Italtile brand.”
Italtile has increased its holding in International Tap Distributors from 60% to 80%, effective from July last year.
Ravazzotti said the group's closer involvement resulting from the new partnership model in its 14 subequatorial African stores was starting to yield results and the group continued to evaluate new opportunities.
“Our Australian operation once again contributed positively to the results. This is due to a more intimate understanding of regional consumer needs and further refinement of the retail model.”
He said the group's black economic empowerment transaction, effective from February, had put it in a position to participate in new markets as a result of its partnerships.
Source: Business Day
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