Cashbuild growth sees rise in turnover

Cashbuild saw revenue jump 15% to R5.2bn in the six months to December 2016, from the same period in 2015.

The rise in turnover was mainly attributable to the acquisition of 44 P&L hardware stores in Gauteng, Mpumalanga and Limpopo. The buyout brought the total number of building materials and associated products stores in the group to 293.

Headline earnings per share soared 47% after stripping out the effect of the payment of a one-off R63m empowerment cost in 2015. But this meant business had become flatter in the latest period.

“It is not what we delivered in the last two years, but we are very pleased in the current circumstances,” CEO Werner de Jager said on Tuesday.

He said that consumers were under pressure and that home-building activity for middle- to lower-income groups in SA that the company targeted had slowed. “And, remember, we came off a very high base [in 2015],” De Jager said.

Anthony Clark, an analyst at Vunani Securities, said Cashbuild had provided another solid set of results, but that there was evidence of slower growth as stated previously.

“This is beginning to creep in and is again warned in these results. The massive jump in HEPS [headline earnings per share] was aided by an unusually low tax rate which saw the 41% rise in EPS [earnings per share],” he said.

“With tougher economic conditions and competitors also warning of a slowdown, the significant rises in earnings that have been the hallmark of Cashbuild for the past two to three years must evidently slow,” Clark said.