Cashbuild cashes in on DIY trend

Published Date: 2021-03-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

The building materials retailer has more than doubled first half profit due to favourable trading conditions and diligent execution.

Cashbuild has benefitted from the rush by South Africans to improve their living spaces after the Covid-19 pandemic resulted in more people working, studying and entertaining from home.

The company, which is the largest retailer of building materials and associated products in Southern Africa, has reported a strong rise in first-half revenue and profit. And it says the second half has started on a strong note too.

Revenue increased by 21% to R6.7 billion over the six months to December, supported by the 14 new stores it's opened since July 2019. It raised prices by an average 4.5% over the period. Gross profit jumped 29% to R1.77 billion as its gross profit margin increased to 26.4% from 24.9%. Operating expenses, including new stores, increased by 11%, resulting in a near doubling in operating profit to R576 million. Earnings per share came in 113% higher at R15.95 and headline earnings per share doubled to R15.41. It increased its interim dividend by 66% to R7.24 per share.

The company said cash and cash equivalents doubled to R2.81 billion as a result of its increased profitability and higher creditors' balances due to suppliers' payments effected after the half-year close.

Revenue for the first six weeks of its second half was 24% higher than the same period last year. Management expects trading conditions to remain uncertain due to the ongoing Covid-19 pandemic and its economic impact.

Cashbuild's shares closed 3.9% higher at R311.21 yesterday.