Cashbuild reported a 6 percent decline in headline earnings per share to 1750 cents. Photo: Simphiwe Mbokazi/African News Agency (ANA)

CAPE TOWN – Cashbuild lifted its final dividend 21 percent to 420 cents per share in the 52 weeks to end June, but management warned that trading conditions were expected to remain tough in the year ahead.

South Africa's largest retailer of building materials and associated products reported a 6 percent decline in headline earnings per share to 1750 cents.

Operations director Shane Thoresson described the results as reasonable in a tough trading environment.

Thoresson said a lot of work still needed to be done in the next 12 months to improve the results further.

He said that consumers were cash-strapped, but people were still spending money on upgrading homes and on decorative work, as opposed to low demand for building materials for new buildings, developments and infrastructure.

Revenue was up 4 percent to R10.62 billion, while operating profit was down 7 percent to R507.3 million. Revenue for the six weeks after year-end increased by 1 percent.

The total dividend was marginally higher at 855 cents from 842c. The group opened 11 new stores and closed 14 – six of them DIY pilot stores where a decision to close them had been taken some time ago, while the rest were “long-term loss makers” whose leases had come to an end.

Last year, Cashbuild reported a 9 percent decline in headline earnings to R424m, while revenue increased 5 percent to R10.2bn from R9.7bn in 2017.

Yesterday Thoresson said that the store expansion, relocation and refurbishment strategy would continue, and that the group planned to open 10 new stores in the new financial year.

He said the group believed significant opportunities to open new stores remain over the longer term, in South Africa and Africa.

Cashbuild shares rose 1.28 percent on the JSE on Tuesday to close at R238.