Cashbuild flags tough environment amid rationalisation strategy
By Karl Gernetzky - Sep 3rd, 12:51
Building materials retailer Cashbuild weathered a tough trading environment to deliver 3% growth in operating profit for the year to end-June, boosted by an extra trading week and the addition of 11 new stores.
Pressure on SA consumers pared the retailer’s gross profit margin of 0.1 percentage points to 25.1% during the period, with the company expecting extremely challenging conditions in the year ahead.
Group revenue for the six weeks after year-end had increased 1%, the company said, but it is planning to continue its expansion and relocation strategy.
During the period Cashbuild added 11 stores and refurbished 26 while closing 14 stores. This brings its total to 315 outlets.
Excluding the effect of the extra week, Cashbuild’s revenue rose 4% to R10.6bn, while headline earnings per share fell 6% to 1,751c.
With the extra trading week, revenue rose 6% to R10.8bn and gross profit 6% to R2.73bn. The group upped its dividend for the period 2% to 855c per share.
Cash and cash equivalents fell 38% to R590m by year-end, which the company said was due to payments to suppliers. Stock levels, including the new stores, rose 2% with the overall stockholding falling to 84 days from 88 in the prior comparative period.Business Live
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