Africa-Press – South-Africa. Cashbuild’s revenue dipped 12% in its financial results for the year ended 26 June, following a previous year of record DIY projects that helped boost sales.
The building materials retailer, which has 318 stores across southern Africa, released its results on Wednesday.
Revenue ticked in at R11.1 billion, down from R12.6 billion the year before. The downward trend was similar for operating profit which was 16% lower at R876 million, and headline earnings which were 33% lower at R436 million. Headline earnings per share was at 1 929 cents compared to 2 872 cents in the previous period.
The group noted that the results were not comparable to the year before – when Cashbuild experienced “record trading conditions” linked to home improvements at an “all-time high” amid Covid-19 lockdowns.
“The growth seen by most DIY retailers last year, especially within Cashbuild where we reported an increase in revenue and headline earnings of 25% and 151%, was as expected, not maintained,” said CEO Werner de Jager.
The group at the time had also issued a higher final dividend last year of 2 935 cents – which is why this year’s dividend has been reduced by more than half to 1 264 cents.
Cashbuild’s revenue drops 10% in the third quarter
Cashbuild was not spared from the 2021 July unrest either, 36 of the group’s stores were affected. Stores that were looted and damaged led to the “scrapping” of various property, plant and equipment (to the value of R20.4 million) and inventory (to the value of R136 million). Cashbuild had submitted insurance claims – R143 million for inventory, R71 million for property, plant and equipment and R9 million for additional operational costs and R100 million for business interruption.
The group has received payment for asset losses of R224 million.
“An interim payment of R50 million was received on 30 April 2022 for business interruption claim of R100 million.”
During the period, Cashbuild rebuilt 28 looted stores, while five stores had been closed following the looting. Two other store closures were linked to non-performance. The group, however, opened four new stores, relocated one and refurbished 21 others.
Cashbuild’s management expects trading conditions to remain challenging, noted de Jager.
“Unstable market conditions and inflationary pressures are a reality, impacting the affordability of products and placing pressure on sales growth,” he said. Group revenue for the six weeks of the new financial year is about 3% lower compared to the same period last year.
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