JOHANNESBURG - South African building materials retailer Cashbuild reported a 9 percent decline in annual profit on Tuesday due to higher costs and weak consumer demand, sending its shares tumbling more than 4 percent.
Headline earnings per share (EPS) — the main profit gauge in South Africa that strips out certain one-off items — came in at 1,867 cents in the year to the end of June versus 2,045 cents in a year earlier.
Revenue rose 5 percent to 10.2 million rand ($696,800) but the cost of revamping and opening news stores pushed costs by 9 percent, Cashbuild said in a statement.
The company added 42 stores in this financial year to its 276 outlets.
Consumers in Africa’s most advanced economy are spending warily due to slow economic growth, high unemployment and rising fuel costs that have pushed inflation to its highest in ten months.
The company said although it expects trading conditions to remain “extremely challenging”, it will “continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as in the past.”
Shares in the firm fell 4.15 percent to 300 rand by 0945 GMT, versus a 0.41 percent rise in the All-Share index.