Cashbuild, one of southern Africa’s largest building materials and associated product retailers, said trading volumes ticked up in the fourth quarter of its year to June 30 and the trend had continued into the first six weeks of the new financial year.
Cashbuild operations director Shane Thoresson said they were cautiously optimistic about prospects following the past two years where revenue growth was slow due to the constrained consumer environment and tough competition in the market, particularly from independently owned stores.
He said introduction of the Two-Pot pension fund system, the establishment of the Government of National Unity, and much-needed infrastructure programmes had the potential to boost trading in 2025. In addition, the possibility of interest rates cuts towards the end of the year could lift consumer spending.
The 53-week year under review had reflected the same economic and trading challenges as the previous year, but the more positive trend in the fourth quarter was “pleasing,” he said.
For the first six weeks of the year ending June 29, 2025, total sales for the group increased by 5% compared to the prior year’s six-week period, an indication of improved market sentiment.
At year-end, Cashbuild was trading from 322 stores (2023: 318 stores). During the year, six new stores were opened, 20 stores were refurbished, one relocated and two were closed.
Thoresson said their store development strategy was executed in a controlled manner, and only implemented once a thorough feasibility process was undertaken.
The opening of the new Cashbuild Small Model Store (SMS) initiative remained on track and the plan was to open 10 new SMS during the 2025 financial year.
Group revenue increased 5% to R11.2 billion. Revenue for stores in existence prior to July 2022 (pre-existing stores – 310 stores) increased 4%, with 12 new stores contributing 1%.
Transactions through the tills increased by 3% compared to the previous year. Gross profit increased by 2%, with gross profit margin percentage decreasing to 24.7%.
Operating expenses increased 4%, with existing stores contributing 3% and new stores contributing 1% to the overall increase. Operating expenses, excluding the P&L Hardware goodwill and trademark impairments of R136.7m, increased by 6%. Thoresson said the group had worked hard to control costs.
Operating profit fell 19% to R189m and excluding impairments, fell by 16%. Operating profit margin reduced to 1.7%. Basic earnings a share fell by 13% to 396 cents, with headline earnings a share falling 22% to 947 cents.
Cash reduced 37% to R999m mainly due to the June 2024 suppliers’ payments being processed within the reporting period, in contrast to the prior year where the supplier payments were processed subsequent to the reporting period end.
Stock levels, including new stores, increased by 5%, with stock days similar to the prior year, at 90 days. There was a decrease in net asset value per share of 5% to R76.67.
They declared a final dividend of 236 cents, bringing the total dividend for the year to 561 cents a share.
BUSINESS REPORT