Italtile, a Gauteng-based retailer and manufacturer of bathroom and home products controlled by South African businessman Giovanni Ravazzotti, released a sobering voluntary sales update covering the five-month period from July 1 to Nov. 30, 2023.
The report paints a picture of a company struggling against a tough economic backdrop characterized by shaky consumer confidence, rising living costs, and fierce competition. System-wide retail turnover for Italtile’s brands – CTM, Italtile Retail, and TopT – declined by 2.9 percent compared to the same period last year.
The integrated import supply chain businesses, Ceramic Industries, and Ezee Tile Adhesive Manufacturers Proprietary Limited, bore the brunt of the weaker retail sales. Combined manufacturing sales dipped by 5.9 percent year-on-year.
Italtile profit warning: Growth not enough, cost pressures bite into tile king
As cautioned in the Group’s year-end results announcement on Aug. 28, 2023, Italtile anticipates a negative impact on its cost base and profitability without strong sales volumes and optimal use of manufacturing capacity.
Italtile, recognized as a leading franchisor, retailer, and manufacturer in the tile and bathroomware sector, reported a modest two-percent increase in revenue at the end of its 2023 fiscal year.
However, the company’s profits took a considerable hit, declining by 14 percent from the previous year. Specifically, the profit declined from R1.93 billion ($103.2 million) in 2022 to R1.65 billion ($88.3 million) on June 30.
South African tycoon rakes in millions from Italtile, but currency woes bite into profits
The decrease in earnings during this period can be attributed to the depreciation of the South African rand. This currency weakening substantially escalated the operating expenses and direct production costs associated with imported goods for the company.
Earlier this year,Ravazzotti, who is recognized as one of the nation’s wealthiest and most influential business figures, received a substantial windfall of $5.03 million in dividends from his stake in Italtile.
Ravazzotti, a prominent figure in the business landscape, owns a significant 33.88-percent stake in Italtile — this amounts to a total of 447,746,694 shares in the company.