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Our aim over the past year was to optimise our investments in people, technology and capital expenditure projects across the business to deliver an unsurpassed shopping experience for our customers and thereby achieve our growth targets. While our retail division delivered solid results, the local manufacturing businesses under-performed against our expectations.


Giovanni Ravazzotti


System-wide turnover for the period was 1% higher at R11,5 billion; trading profit declined by 15% to R2,3 billion. These results reflect difficult trading conditions featuring weak consumer demand, heightened competition and intense margin pressure in the current inflationary environment. Regrettably, in the South African manufacturing division, the adverse impact of the operating context was exacerbated by internal inefficiencies, which constrained productivity and profits. Particularly disappointing was the delay in bedding down recent major capital expenditure (“capex”) projects in our Ceramic and Ezee Tile plants.

Our investment approach in our manufacturing operations has always been to entrench our leadership in the industry through using world-class technology to create highly fashionable, exceptional quality products. I am confident that the cutting-edge equipment and facilities which we have invested in will deliver significant competitive advantage once their full potential is realised. To achieve this, we have implemented critical remedial actions in the division, including restructuring the teams and systems to optimise on competencies, efficiencies, quality and costs. Our primary focus over the next year will be on optimising and extracting the projected benefits of these capex projects.

Certain parts of the business deserve mention for their good performance in the challenging conditions. Our stores in Kenya and Tanzania delivered pleasing results despite disruptive elections in the former, and subsequent flooding in both countries. Our Australian operation, Centaurus, also reported higher sales and profits, notwithstanding the subdued market. Locally, I am pleased to report that Betta Sanitaryware grew sales and production volumes and gained market share through fashionable import-replacement products. Betta’s branded sanitaryware range offers important competitive advantage through its SABS-approved and ISO 9001 certifications and five or 10-year warranties.


In the year under review, the Board’s focus remained on the key sustainability pillars of our five-year strategic plan. They are: operational excellence; leadership effectiveness and preservation of corporate culture; fashion leadership; omni-channel platform; organic growth; energy security and transition to renewable resources.

The Board’s responsibility is to ensure that these sustainability pillars and related policies are communicated, understood and complied with, while management is accountable for promoting and implementing the policies. Management’s key performance indicators are aligned with the five-year strategic plan.

In terms of our strategic plan, I am satisfied that good progress was made on improving operational excellence in the retail division, while our fashion leadership was enhanced across all our business units. We grew the contribution of our omni-channel to total sales, and progressed our energy journey, as discussed in this report. While we continuously monitor the landscape for potential acquisitions, no suitable opportunities were identified in the period.

Leadership effectiveness was acutely tested during the year, resulting in a restructuring of the management team at both Ceramic and Ezee Tile. These measures have started to bear fruit, although continued focus is required to build and develop depth in the team. Significantly, I believe that opportunities were missed in the manufacturing division in terms of increasing tile volumes and improving productivity measures, and these will remain key focus areas.



We have made progress in our efforts to reduce the Group’s carbon footprint and transition to renewable alternatives, as outlined in the Environmental report in this document. In our retail operations, we operate three entirely off-grid stores, which are serving as pilot studies for further stores. Photovoltaic systems are installed at 44 of our stores and we are rolling out a bridging battery solution to 38 stores. Throughout the retail network we have implemented measures to monitor and reduce consumption of non-renewable resources and minimise waste destined for landfill.

In our manufacturing operations, heat and water recovery solutions are implemented, and solar capacity is installed at Betta, Gryphon, Samca+, Samca Wall and Ezee Tile’s Vulcania plants. Up to seven percent of Ceramic’s gas requirements are supplied by liquefied natural gas (“LNG”), which diversifies our energy source, but at a cost. An additional 0,4 MW of power is being installed at Samca Wall and we are currently investigating installing additional solar power at Samca+; a combined heat and power plant project in Vereeniging; and an electricity-wheeling arrangement. We are also conducting exploratory discussions with a biogas supplier.

It is of significant concern that Sasol has indicated that it could stop supplying LNG from Mozambique as early as 2026. Seventy percent of Ceramic’s energy requirements are supplied by gas, and therefore the repercussions for the business are serious if an alternative bulk gas supply is not commercially available at a viable price. While this potential decision is a key risk for the entire national economy and will likely require a collaborative solution from a range of industry players, management is in the interim actively exploring alternatives, both in the Independent Gas Users Association-SA (“IGUA”) forum and independently. Shareholders will be apprised as and when further developments occur.



Our stated goal at the end of the prior year was to strive to maintain and improve on the Group’s B-BBEE rating of level 2 (98,55 points) as assessed in September 2022. The key areas identified for improvement were management control, skills development and enterprise and supplier development. In the assessment conducted in September 2023, the Group maintained its level 2 rating, with an improved score of 99,34 points.

Proudly South African

Approximately 82% of all merchandise procured by the Group over the past year was from South African businesses. Our Proudly South African policies and practices are centred on promoting the sustainability of our business, the communities in which we operate, and the broader economy. By selling local products manufactured by local people, we support suppliers to create jobs and facilitate skills transfer. While our focus is predominantly on local procurement, pricing dynamics in the global market currently favour importing certain products. In the interests of our cost-conscious customers, we leverage such buying opportunities to support them.

Socio-economic development

The Group’s social investment spend is conducted primarily through the Italtile and Ceramic Foundation Trust (“Foundation”), our broadbased black ownership scheme, whose goal is the transformation and upliftment of previously disadvantaged communities through distributions made to public benefit activities related to education, sport and conservation. The Foundation’s spend of R33 million for 2023 was allocated as follows: education: 40%; sport: 40%; conservation: 10% and other: 10%.

We partner with non-profit organisations in these social impact projects, and I would like to thank each of them for the transformative results they achieve in the communities and natural environments they serve. Their devotion to improving the lives and futures of those they interact with is extraordinary. I would also like to thank our trustees and staff who volunteer their services, and our franchise partners who make valued contributions to community development initiatives. I am proud of all of you for making a meaningful and measurable difference where it is most needed.

The Foundation’s report and the Group’s CSI report Italtile and Ceramic Foundation Trust report and Corporate Social Investment report and respectively of this IAR provide detail on the projects undertaken during the review period.


In preparing this IAR, we referred to the JSE’s Sustainability and Climate Disclosure Guidance documents as a benchmark for the business’s reporting standards. The Board is satisfied that disclosures regarding governance, strategy, management, and metrics, targets and performance, as recommended by the guidelines have largely been adopted in this report.


This is my final report as Chairman of the Group. While I retired from this position on 30 June 2023, to coincide with my 80th year, I will remain on the Board as a non-executive director and intend to continue to contribute to the business. Preserving our organisational culture is important to me and I look forward to continuing to entrench that through my training and mentorship programmes.

My daughter, Luciana Ravazzotti Langenhoven, has been appointed as Chairman, after having served as my deputy since 2018. Luciana is suitably equipped for the position, having grown up with the business and worked across the organisation in various roles over the past 34 years. I am confident she will bring a fresh perspective to the business, while protecting our founding values.


We recognise that in an industry renowned for its dearth of specialist retail and manufacturing skills, our people are key to our competitive advantage, and hence we continue to invest in them and incentivise them. Notwithstanding that the results for the year failed to meet our expectations, the largely solid performance should be viewed in light of the very difficult trading conditions experienced, our demanding high-performance culture and stretch targets. Accordingly, the Remuneration Committee approved above-inflation increases for most staff. Partnership with our employees is a key philosophy, and 10% of the business’s profits are paid to them through various schemes. This partnership ethos, fair remuneration and our steadfast company values, will assist us to remain an employer of choice for the high-calibre candidates that our business demands.


The Group’s equity-settled Staff Share Schemes are designed to incentivise employees to participate in the growth and profitability of the business. During the financial year, the Group implemented a new staff share scheme, to replace the previous scheme. The new scheme is similar in structure and the outcomes are largely the same; however, the new scheme is easier to administer and more tax efficient for the Group and the participants.

The seventh allotment of shares under the previous scheme, granted in 2018, vested on 31 August 2022. A total of 151 employees qualified and the after-tax value averaged R161 124 per individual (aggregate payments including income tax totalled R35,3 million). On 31 March 2023, in terms of the new scheme, awards were made to 535 qualifying employees of the Group and its franchisees. Awards vest after three years if the participant remains in the employ of the Group or its franchisees. As at 30 June 2023, there were 638 participants in the schemes, with awards linked to 5,5 million Italtile shares.


The Group’s net cash reserves rose by 143% during the review period, reflecting the strong cash generating ability of the business, responsible cost leadership disciplines, and the conclusion of major expansionary capex projects. While a range of options is available in terms of optimal allocation of cash reserves, including special dividends, share buy-backs and possible acquisitions, we have resolved to adopt a cautious stance for the period ahead. In light of the recent pandemic, uncertainty in the socio-political environment leading up to national elections in 2024, the generally weak economy and subdued growth forecasts, our intention is to monitor the evolving landscape and evaluate the options available, in the interests of our stakeholders.


The dividend cover is two-and-a-half times. The Board is satisfied that this level affords attractive returns for shareholders, while providing for an ongoing capital investment programme across our operations.

A final gross ordinary dividend of 21,0 cents per ordinary share (2022: 27,0 cents per share) was declared for the period. This final dividend, together with the interim gross ordinary cash dividend of 32,0 cents per share (2022: 34,0 cents per share), produces a total gross ordinary cash dividend declared of 53,0 cents per share (2022: 61,0 cents per share), a decrease of 13%.


In line with the prior year comparative, sales value for the two months subsequent to year-end was marginally higher, although volumes were slightly down.


Prevailing conditions are likely to persist for the year ahead. High interest rates and inflationary pressure will continue to constrain household income and reduce the affordability of new‑build and renovation projects. Unstable energy and water supply will also impact discretionary spend as consumers reallocate funds to provide for these basic services. In light of increased manufacturing capacity (both Group and competitors), and subdued international and local demand, competition will remain intense and margin pressure is expected to increase as operators contest for share of wallet and market.

Our investment in industry-leading technology will continue to give the Group a competitive advantage in the marketplace. Following the restructuring implemented in the manufacturing division, the Board is confident that we have the right teams in place to achieve our growth targets. The business will focus on consolidating and optimising the recent major capital expenditure projects, which will improve performance in the period ahead and position the Group to capitalise on opportunities for growth as they arise. In this regard, we remain optimistic that the long-term dynamics of the local market are favourable: there is growing urbanisation, a dire housing shortage and an upwardly mobile young population, desirous of becoming homeowners.


Since founding this business 54 years ago, I have been privileged to witness the evolution of an industry, which today is one of the most innovative and competitive in the world. Hard work, determination, and courage in the face of adversity are values that are as relevant today as they were in 1969 when I first started selling imported tiles to a market that was entirely unfamiliar with the product.

While cutting-edge technologies will continue to be pioneered and ground-breaking fashion will change ever more frequently, there will always be one constant – the raison d’etre for all of us who work in this industry – the customer and their desire for an exceptional shopping experience.

Across our business, our mantra is to fight for the right of our customers to have beautiful homes. Our corporate culture is centred on the goal to deliver the right product, beautifully presented at the right time, place and price. I am confident that if we focus on these basic values and capitalise on our array of retail and manufacturing assets, we will continue to deliver an unsurpassed customer experience and further entrench our leadership in the industry.


Our customers are at the core of our business, and it is thanks to the unwavering efforts of our store operators and franchisees that we continue to retain and grow their loyalty to our brands.

In the year under review, the management team faced a variety of challenges, both external and internal, which tested their mettle. I am satisfied that the learnings they gained have strengthened the business and position us to meet the expectations of our stakeholders.

The Group enjoys long-standing, constructive relationships with our private and institutional shareholders. Management’s engagements with them during the year confirmed their recognition of the business’s investment proposition and our ongoing efforts to reward their support through improvement in performance.

Our business partners and advisers afford a valuable service to the Group and I extend my appreciation to them.

Finally, I would like to thank my Board colleagues for their support and counsel during my tenure as Chairman. Together we have successfully navigated a remarkable, and at times, testing journey. I am confident that the new Chairman will benefit from their wisdom and extensive experience.

G A M Ravazzotti

Chairman, effective until 30 June 2023