Business

End of an era for iconic R12 billion retailer in South Africa

Staff Writer

 ·24 Aug 2026

South African ceramics and home-finishing group Italtile is in talks to exit its Australian operations as its earnings come under strain amid excess manufacturing capacity.

Reporting its Annual Financial Statements for the year ended 30 June 2026, the group noted that it is “reviewing its continued presence in Australia”.

It added that it is in “advanced discussions with a prospective buyer, with the due diligence process ongoing”.

The group, founded in 1969, is a manufacturer, franchisor and retailer of tiles, bathroomware and other complementary home-finishing products. It currently has a market cap of R12.5 billion.

The group’s retail brands are the iconic CTM, Italtile Retail and TopT, represented through a total network of 213 stores, including seven online webstores in South Africa and sub-Saharan Africa.

However, Italtile’s retail operation is supported by a vertically integrated supply chain comprising manufacturing and import operations, as well as an extensive property portfolio.

Its presence in Australia is through tile manufacturer Ceramics Industries, which was established in 1976.

The group comprises five tile factories, one bathroomware factory, and one acrylic bath factory, all based in South Africa, as well as a tile factory in Australia—the Centaurus tile factory.

Centaurus came online in 2004 and was expanded in 2007, doubling its capacity.

Italtile acquired 20% of Ceramic Industries in 2012, and the group subsequently delisted from the JSE. A full buyout was completed in 2017.

Operationally, the Centaurus factory is an outlier, being the only factory outside South Africa.

According to Italtile, trading conditions in the ceramics market continued to deteriorate in the 2025/26 financial year, mainly due to excess manufacturing capacity in Southern Africa.

Sales decreased by 1.1%, and margins remained under pressure due to higher costs, it said. The group’s integrated Supply Chain import businesses’ revenue decreased by 6.4%.

This has led to the review of its continued presence in Australia, marking the end of a 22-year period of operation.

In addition to the looming Australia exit, the group has also seen a significant changing of the guard, with Group CEO Lance Foxcroft stepping down from the position at the end of June.

Foxcroft stepped down from his position as CEO of the Group and of Ceramic Industries due to family
circumstances. He took early retirement to move to Australia to join his family.

Brandon Wood assumed the position of CEO on 1 July 2026.

Foxcroft served as CEO-designate from 1 July 2021 and was appointed CEO on 1 January 2022.

He was formerly CEO of Ceramic Industries, a position he held since 2014. He joined Ceramic in 2003 and held a range of senior management positions in the business prior to his appointment as CEO.

Earnings under pressure

The group reported a marginal rise in turnover for the period, while earnings came under severe pressure, declining by around 10% from the year before.

System-wide turnover increased by 0.6% to R11.3 billion for the year, with retail store system-wide revenue rising by 0.4% to R7.7 billion.

Subdued demand, rising input costs and strong competition placed significant pressure on margins, with the group’s achieved gross margin declining from the prior year, it said.

The group noted that sales growth and market share gains remained key priorities, while cost discipline and operational efficiencies mitigated some cost pressures.

In terms of retail, average selling price inflation was 1.8%, and retail margins increased by 0.5% due to improved retail execution.

However, the group’s trading profit declined by 10.4% to R1.8 billion.

Basic earnings per share decreased by 10.0% to 113.1 cents (2025: 125.6 cents), while basic headline earnings per share decreased by 9.4% to 113.4 cents (2025: 125.1 cents).

Looking ahead, the group remarked that South Africa’s GDP outlook is subdued. However, it remains confident in its sector’s long-term attractiveness.

“Our view for the next 12 months is tempered by the ongoing Middle East conflict’s impact on costs and consumer confidence and by caution ahead of the next local government election,” it said.

“We expect these headwinds to constrain growth, margins and profitability in the year ahead.”

More positively, however, the group anticipates that provisional anti-dumping duties on ceramic and porcelain wall and floor tiles will have a positive effect once overstocked positions have been reduced.

“We will engage with authorities to secure support for a long-term market solution,” it said.

Given the group’s strong cash generation and cash reserves, it declared a dividend of 21 cents per share, resulting in a final dividend of 45 cents per share for the year, when added to the interim dividend.

It also declared a special cash dividend of 25 cents per share.