JSE-listed building materials and products retailer Cashbuild says its results for the six months ended December 25, 2022, reflect the current tough economic and trading environment.
The company's revenue for the six-month period was 4% lower year-on-year at R5.6-billion. Revenue for the 309 stores that have been in operation prior to July 2021 decreased by 5%, and revenue from Cashbuild's seven new stores contributed 1% growth.
Gross profit decreased by 9% to R1.4-billion, with the gross profit margin percentage decreasing to 25.3% from 26.6%.
Selling price inflation was 4.5% at the end of December 2022 when compared with December 2021.
Operating expenses, including new stores, increased by 9%, resulting in the operating profit decreasing by 47% year-on-year to R262-million.
Further, basic earnings a share decreased by 50% to R6.53 from R12.95 in the prior comparable period, and headline earnings a share decreased by 39% year-on-year.
Cashbuild declared an interim dividend of R4 a share, down 32% on the prior interim dividend of R5.87 a share.
Cash and cash equivalents decreased to R1.7-billion, owing to lower profitability. Stock levels, including new stores, increased by 2%, with stockholding at 89 days at period-end.
During the period, the company opened three new Cashbuild stores, and refurbished 12 Cashbuild stores and two P&L Hardware stores.
Also during the period, four Cashbuild stores and one P&L Hardware store were closed - one looted store was closed, there was one temporary closure owing to relocation, the remaining two stores in Zambia were closed, while one non-performing P&L Hardware store was also closed down.
Net asset value a share increased by 1% to R92.66 from R91.75 in the prior comparable period.
“Group revenue for the six weeks subsequent to the period end is 8% lower than the prior year’s comparative six-week period. Management expects trading conditions to remain challenging,” the company warns.
“We continue to expect trading conditions to remain challenging. Although our operations are less affected by loadshedding owing to either generators, battery power or solar systems at our stores, these installations come at a cost,” says Cashbuild CEO Werner de Jager.
“We will focus on protecting and growing market share through various initiatives over the short- to medium-term. The notable increase in independent competitors, as well as the concerning increase of unregulated, inferior products in the market, will also continue to negatively impact our business,” he adds. 