Foreign interests

The growth opportunity in Africa is considerable and we remain committed to our expansion into the region. However, as with all our business interests, we have adopted a long-term approach which is based on developing a solid understanding of each country in which we invest and identifying the right partners. At present we are evaluating opportunities in Zambia and Malawi where our Master Franchise licences have expired. We continue to explore opportunities in Kenya and Uganda and our operation in Tanzania is showing improvements.

Despite extremely difficult trading conditions, our Australian business, which comprises nine stores, produced an improved performance in the final three months of the review period to deliver a small trading profit.

Dividend

The Group has maintained its dividend cover of three times. The Board has declared a final dividend of 5 cents per share (2008: 8 cents), which together with the interim ordinary dividend of 6 cents, produces a total ordinary dividend declared for the year of 11 cents (2008: 12 cents), a decrease of 8%.

Prospects

The short-term performance of the Group will remain muted in line with the adverse trading environment which is set to persist in the coming financial year. During our 40 year history, we have proved our resilience and we are confident in Italtile’s ability to continue delivering value in the long-term.

Our immediate focus is to drive the initiatives which we have set in motion and which will result in a leaner, more customer focused business.

Directorate

We welcome Ms Susan Maria du Toit who was appointed as an independent non-executive director of Italtile, with effect from 6 March 2009. We are pleased that she accepted the invitation to join our Board and are confident that she will make a positive contribution to our Company.

Appreciation

I am grateful to all those involved with Italtile during 2009 for their commitment and efforts in overcoming the hurdles which were imposed by the tougher environment. It has been a privilege for me to work with all our people, our team at Peter Place, as well as our franchisees, joint venture partners and our suppliers. My heartfelt thanks for your steadfast commitment during the year; you have all contributed to Italtile’s long-term success.

To our customers, thank you for your continued loyalty to our brands and we look forward to welcoming you in our stores for many years to come.

As we embark on the next 40 years, we maintain our focus on improving Italtile so that we will again be able to look back and celebrate our long-term successes.

G A M Ravazzotti