Italtile CEO Jan Potgieter spoke to BizNews about the company’s stronger-than-expected interim performance. While many South African companies buckled under Covid-19 containment, Italtile saw turnover rise by 14% to R6.2bn for its half-year to the end of December. Trading profit surged 38% to R1.4bn. It also has more than R1bn in the bank, with a possibility of a special dividend. – Jackie Cameron
Jan Potgieter on Italtile results:
We’re very happy with the fact that the group reported double digit sales and profits, basically growth across all our operations. Whether it’s our individual brand, our supply chain businesses whether it’s manufacturing. That in itself is very rewarding for us. I guess one of the key differences is our partnership with our people, which is a strong part of our culture.
It’s extremely satisfying that through this widespread property scheme that we do have in place, our people were really appropriately rewarded for their extraordinary efforts during these times. I guess one of the key things is we tend to rather focus on the internal things that are within our control. There was a lot of improvement in our business – whether it’s around people, our products, our processes and our productivity.
We think it’s not just what has happened in more recent times, because obviously, our sector has benefitted from home improvement. We have anecdotal evidence to show that we really gained some share of wallet. We believe it’s through our continued leveraging of our internal improvements – whether it’s our sales leaders, our range enhancement, our leadership, productivity – and then ultimately, the high performance of our people.
On plans with net cash:
We’ve been conservative with regard to our dividend cover. It’s been consistent to two and a half times cover, that we’ve always kept. Towards the end of the year we will be looking at our capital requirements – which is also guided – and we will keep on investing in our business, with regard to factories, stores or technology.
Whenever we have excess cash, we will return it to our share holders – as we’ve been doing over the last three years consistently – in the form of special dividends. When the time is right, when we get to the end of the financial year, we will have an assessment of how we see the year forward, and then make a decision on that.
On the expropriation bill:
We will be making a submission on that for our own properties. But we are not sitting on a lot of vacant land or property that’s not utilised – it’s all built for our own purposes. At the end of the day, if there are changes, I think as a business we’ve learned to be quite agile and respond in whatever manner is required. We can’t worry too much about some of these external things that’s based on some speculation, etc. We’re not quite sure how that will turn out.Â
On whether there are plans to diversify offshore:
Our offshore plans have always been being predominantly focusing on sub-Saharan Africa. We have retail operations and we are targeting East Africa in particular. We have stores in Kenya and Tanzania. We plan to expand into East Africa further, and then what we refer to as southern Africa. That’s very similar to South Africa, all the neighbouring countries – Botswana, Namibia, Swaziland, etc.
We’ve been very prominent there and have been very successful. We have acquired some properties in Zambia. There will be some expansion in Zambia. Also with regard to Mozambique, we are busy finalising with some partners there. So we said we’re looking at Mozambique as well, just from the retail perspective. With regard to manufacturing, we are exploring a lot of options currently.
Over the next couple of years, although we will approach it project quite cautiously, we do believe that we will start opening some manufacturing operations. We certainly do believe there’s an opportunity. We’ve already got adhesive factories in some of the countries that we that we operate in, from a retail perspective.
 We also invest quite a lot in a multi-channel approach, so that customers can do a lot of research online and decide whether they want to shop online or in our stores. With our tile visualiser, it really enhances the experience for our customers. Despite all the uncertainty and the unknowns out there, we will focus all our energy on improvement in our own business and the things that are within our control – just trying to respond to the marketplace [and] to give them the right product at the right time and price.
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