Our opinion on the current state of ITLTILE(ITE)Italtile (ITE) is a franchisor of tiles, sanitary ware, flooring, and home finishing products - which it manufactures and wholesales itself. The company is controlled by the Ravazotti family.
It has 206 stores and six online web stores. It also has a property portfolio of retail and industrial properties worth about R4.3bn. The company has acquired 95.47% of Ceramic Industries and 71.54% of Ezee Tile, which it styles as its manufacturing business (as opposed to its retail business).
The company gained an increased "share of wallet" and improved the management of stockholding and working capital. The company appears to be benefiting from increased sales as people work from home and seek to improve their home environments. It plans to add between 10 and 15 new stores this year. It has also bought back about R240m worth of its own shares at lower levels.
The company closed 18 stores in Natal and 16 other stores for ten days during the civil unrest. Two stores at Orange Farm and Spruitview were destroyed. There have also been store closures due to COVID-19 during July 2021.
In its results for the year to 30th June 2024, the company reported turnover unchanged and headline earnings per share (HEPS) down 7%. The company's net asset value (NAV) was up 10% at 707.5c per share.
The company said, "While our retail operation's full-year results were slightly lower than the prior comparable year, the division recovered market share and performed better in the second half of the period than the first half."
In a sales update for the five months to 30th November 2024, the company reported retail turnover up by 2.2%.
The company said, "Combined manufacturing sales reported by Ceramic Industries Proprietary Limited ("Ceramic Industries") and Ezee Tile Adhesive Manufacturers Proprietary Limited to both Group and third-party customers declined by 1.6% compared to the Prior Period's decline of 5.9%."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would increase by between 2% and 6.7%.
Technically, the share moved sideways for two years until COVID-19 took it down to levels around R10. The share broke up through its long-term downward trendline in June 2024 and rose strongly until the end of that year. Since then, it has been in a downtrend.
It will probably benefit from new building activity expected to follow the formation of the new GNU in South Africa.
