Italtile Limited (JSE:ITE) News - Voluntary Sales Update

ITALTILE LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1955/000558/06)
Share code: ITE   ISIN: ZAE000099123
("Italtile" or "the Group")


VOLUNTARY SALES UPDATE


This sales update pertains to the five-month period from 1 July 2021
to 30 November 2021 ("review period").

Sales related to Ceramic Industries Proprietary Limited and Ezee Tile
Adhesive Manufacturers Proprietary Limited are referred to as
"manufacturing" sales to distinguish them from "retail" sales reported
by Italtile´s retail brands, namely CTM, Italtile Retail, TopT and U-
Light.


TRADING CONDITIONS AND GROUP PERFORMANCE

The trading conditions experienced during the review period were
challenging, taking account of the ongoing effects of the Covid-19
pandemic   (“pandemic”)   including severe  global   supply  chain
disruptions; civil unrest in the month of July; notable price
inflation of imported raw materials and finished product; and the
adverse impact of load-shedding, specifically on the Group’s
manufacturing operations.

Competition across the industry also intensified as stock availability
improved and beleaguered consumers reduced or deferred spend in the
context of low wage inflation, high levels of debt and escalating
unemployment.

Comparable sales for the review period are distorted by the high base
of the prior corresponding period which was driven by the pandemic-
related   work-and-study-from-home   trend  that   shifted   spending
priorities and boosted demand for home improvement products. With the
re-opening of various sectors of the economy, there has been a steady
decline in this demand over the past five months, a trend which is
likely to continue as lockdown restrictions ease further and the
vaccine programme roll-out progresses.

The following factors contributed to off-setting the aforementioned
adversities and supporting sales growth:
   • the Group's local integrated supply chain which ensured
     consistent availability of a wide product range;
   • given that most of the Group’s total range is procured locally,
     the negative impact of continued global supply chain disruptions
     was mitigated;
   • continued low interest rates which supported homeowners’
     investment in existing and new properties; and
   • management's unwavering focus on improving the customer’s
     shopping experience through enhanced ranges, presentation, and
     service, including implementing rigorous risk mitigating
     measures to ensure a safe operating environment for customers
     and staff.

Investor Communications   083 395 8608   englishd@italtile.co.za   Page 1 of 2
Retail brands

Good growth was reported by Italtile Retail and TopT, while CTM’s
sales were in line with the prior comparable review period. Total
retail store sales increased by 3.1% compared to the previous
corresponding review period and by 19.9% when compared to the 2020
review period.

Supply Chain

Sales for the review period were flat compared to the previous
corresponding review period and increased by 24.6% when compared to
the 2020 review period. This disparity is primarily a reflection of
significant volumes of delayed imported stock which arrived late and
were invoiced out during the prior comparable review period.

Manufacturing

Sales for the review period increased by 1.0% compared to the previous
corresponding review period and by 18.0% when compared to the 2020
review period. The Group’s Samca Plus factory was under construction
for most of the review period and commenced commissioning in October
2021, therefore direct comparison with the prior review period is not
possible.


OUTLOOK

Difficult macro-economic trading conditions are expected to persist
for the foreseeable future, which will negatively affect consumer
sentiment and spend. Ongoing load-shedding will also hamper the
Group’s   manufacturing  operations   specifically   and  impact   on
profitability. Management is however confident that there are
opportunities in the business, within its control and influence, that
offer prospects for growth.

In line with the guidance provided in the year-end results
announcement published on SENS on 26 August 2021, and assuming trading
conditions do not deteriorate materially in the balance of the current
financial year, the Group remains on track to deliver sales and profit
growth for the full year.

The above information has not been reviewed and reported on by the
Group´s external auditors.

Johannesburg
6 December 2021

Sponsor
Merchantec Capital


Investor Communications   083 395 8608   englishd@italtile.co.za   Page 2 of 2

Date: 06-12-2021 10:10:00
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