Cashbuild on Monday warned that its full-year earnings were likely to fall as much as 41 percent, hurt by the implementation of IFRS 16 leases and lockdown regulations.

The largest retailer of building materials and associated products said in a trading guidance to shareholders that it expected its headline earnings per share (Heps) to decline by between 36 and 41 percent for the year to end June from last year’s 1 910.4c.

The group said earnings per share (Eps) were also projected to tumble between 36 and 41 percent to be between 1 110c and 1 204c from 1 881.3c last year.

“These movements are after taking into account the implementation of IFRS 16 leases which resulted in the depreciation of right of use assets and interest costs on the lease liabilities raised and the effects of Covid-19 lockdown level 5 during April,” the group said.

The group said the Eps would, however, decline by a smaller margin after eliminating the once-off effects and IFRS adoptions between 10 percent and 15 percent, to be between 1 550c and 1 641.1c compared to last year’s 1 823.5c, while its Heps are also expected to fall by between 10 and 15 percent, to be between 1 574.6c and 1 667.2c, down from last year’s Heps of 1 852.5c. It said its operations felt the impact of Covid-19 outbreak in the fourth quarter to end June.

In the first trading update released at the beginning of August, Cashbuild said its revenue for the fourth quarter declined by 23 percent, hurt by Covid-19 lockdowns in a number of countries in which it operates as it was not classified as an essential services provider under level 5 of the lockdown regulations.

Revenue in April was down by 87 percent, while in May its revenue fell by 12 percent, and June’s revenue was down by 13 percent.

All Cashbuild stores and P&L Hardware stores as well as the support office, with the exception of six stores in eSwatini, two stores in Malawi and three stores in Zambia, were closed under level 5 of the lockdown.

The group has operations in South Africa, Malawi, Zambia and Botswana and operates Cashbuild stores, P&L Hardware (which it acquired for R350 million in 2016), and DIY stores.

The group will release its full-year results next month.

Cashbuild shares gained 2.26 percent on the JSE on Monday to close at R188.