Cashbuild typically serves home builders and improvers in the lower living
standards measure (LSM) segment‚ as well as contractors and public sector
infrastructure developers.

Revenue was up just 5% to R10.2bn in the year to June, with selling
price inflation holding steady at 2% from a year ago.

But operating expenses rose 9% as Casbuild expanded its store base. It
added 25 new stores to bring its total to 318.

“This was once again a difficult year, with results deteriorating
even more in the second half,” CEO Werner de Jager said in the results
statement.

He said revenue for the stores that were in existence before July 2016
remained at similar levels to 2017, with the 42 new stores opened since then
largely responsible for the 5% increase in revenue for review period.

The company, which also operates in Namibia, Swaziland and Lesotho,
expects tough conditions to persist in the near to medium term.

“This is a classic business that is the coalface of a weak South
African economy. It’s still trading on a price-to-earnings ratio of 16, which
is not cheap,” said Nick Kunze, analyst at Bridge Stockbrokers.

The value of the shares has dropped 30% on the JSE this year, to R313,
underperforming the all share index, which is flat over the same period.

Cashbuild declared a declared a final dividend of R3.46 per share, brining
the total to R8.42, which was down 9% on the year-ago period.

Headline earnings per dropped 9% to R18.67.

Source: Business Live