Cashbuild: good results after P&L acquisition
Revenue up 12 percent, more new outlets
JSE-LISTED Cashbuild said yesterday that the integration of P&L Hardware to its business had yielded positive results after the acquisition boosted its earnings for the year to June.
Cashbuild acquired P&L Hardware for R350 million last year, which had 39 stores in its portfolio at the date of acquisition. This accounted for a 10 percent hike in revenue to the group’s overall revenue increase of 12 percent. The group reported a 12 percent increase in revenue to R9.7 billion.
Shane Thoresson, an operations director at Cashbuild, said: “We are going to open 16 new P&L Hardware stores in the next financial year, as we continue to grow the business and our footprints in the market.”
Thoresson said the group was waiting on the competition authorities to approve the acquisition of Buffalo Timber within the next couple of days.
During the financial year, Cashbuild opened 12 new stores and another 12 were refurbished. Two were relocated, four P&L Hardware stores were opened and two were closed.
The group said Cashbuild would continue its store expansion, relocation and refurbishment strategy in a controlled manner.
Cashbuild is southern Africa’s largest retailer of quality building materials and associated products, selling direct to cash-paying customers.
The group said revenue for its existing 228 stores, opened prior to July 2015, decreased by two percent, while its new stores contributed four percent to revenue growth.
Cashbuild achieved selling price inflation of only two percent during the period.
Operating expenses, excluding the black economic empowerment transaction in the prior year, rose 13 percent, which resulted in an operating profit increase of one percent.
Basic earnings per share (Eps) increased seven percent to 2 048 cents, while headline earnings per share (Heps) gained eight percent to 2 045c.
Chief executive Werner de Jager said this year had been one of more challenging periods with consumer spend in the LSM categories that they serve, being under severe pressure.
“The acquisition of P&L Hardware, together with the new Cashbuild stores opened during the year, positively impacted our results for the financial year under review.”
He added that the group’s financial position was healthy, with a reported cash balance of R801m at the end of June.
The board declared a final dividend of 390c a share, taking the overall dividend to 930c when included with the interim dividend.
Cashbuild shares fell 0.01 percent to close at R380 on the JSE yesterday.