ITALTILE the listed importer, manufacturer and distributor of tiles and bathroom accessories is confident even though the residential property market continues to cool.

May building statistics point to a slowdown in residential development. For the second consecutive month, the rate of growth of building plans passed for residential units has declined significantly. Year-on-year growth of a 3-month moving average dropped from 24,4% in April to 14,5% in May.

Furthermore, the number of units completed actually shrank to the tune of 7,6%.

“A declining trend in residential building activity is now beginning,” reckoned John Loos, property economist of FNB.

In spite of cooling property market concerns, Gian Paolo Ravazzotti, newly appointed Itatile CEO maintains consumer demand for tiles and ceramic products will not dampen.

He explained that as Italtile offer final finishes for the home, the slowdown in building plans would only become evident in about six months time.

Moreover, Ravazzotti reckoned homeowners would stay put and improve the home they have.

Ravazzotti added that the “simple look” is becoming more popular and this was giving homeowners a reason to renovate their homes.

“The range of bathroom accessories and tiles on offer have prompted customers to refresh a bathroom or upgrade their kitchen,” he explained.

While both divisions reported solid growth, the bathware component outperformed the tile business in terms of rate of growth and market share improvement.

Headline earnings per share, for the year ended June 2006, increased 23% to R13,12 a share. Turnover for the group improved 15% to R2,3bn and trading profit rose 23% to R338m. Italtile declared a final dividend of R2,90 per share.

The share rose 1,3% and closed on R200, which is 15,1 times the new headline earnings figure

Article from: www.moneyweb.co.za