The company, which typically serves home builders and improvers‚
contractors and traders, said headline earnings dropped 8% to R249.34m in the
six months end-December.

This marked the first decline in headline earnings since 2013, according
to Iress data.

While revenue rose 5% to R5.4bn as Cashbuild added new stores, operating
profit slid 10% to R325m and gross margin slipped to 25.1% from 25.1%.

“Despite a 9% growth in number of stores, the severe economic
pressures experienced by the man on the street were noticeable in the marginal
increase in Cashbuild’s number of customer transactions period-on-period,”
CEO Werner de Jager said in a statement.

Operating expenses, including new stores, was up 9%, outpacing revenue
growth.

The company declared an interim dividend of R4.96 per share, which was
down 8% from the year-earlier period.

“Driving top-line revenue growth has been difficult in this
environment and hence the need to focus more acutely on inventories and
costs,” said Craig Pheiffer, chief investment strategist at Absa
Stockbrokers and Portfolio Management.

The share price slumped 11% to R426 in early trade on the JSE, giving
the company a market valuation of R10.6bn.

Source: Business Day