Cashbuild’s share price leapt by more than 12 percent on the JSE yesterday after the group said that its earnings would increase by a minimum of 100 percent for the six months to end December. Photo: Simphiwe Mbokazi
Cashbuild’s share price leapt by more than 12 percent on the JSE yesterday after the group said that its earnings would increase by a minimum of 100 percent for the six months to end December. Photo: Simphiwe Mbokazi

Cashbuild shares surge 12% on strong update

By Sandile Mchunu Time of article published Jan 26, 2021

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DURBAN - CASHBUILD’S share price leapt by more than 12 percent on the JSE yesterday after the group said that its earnings would increase by a minimum of 100 percent for the six months to end December.

The group said in a trading statement that it expected its headline earnings per share (Heps) to increase by a minimum of 100 percent to 1 524.8 cents a share compared to 762.4c reported last year, while its earnings per share were also expected to increase by a minimum of 100 percent to 1 496c compared to 748c reported a year earlier.

The retailer of building materials and associated products attributed the increase in earnings mainly to a 21 percent jump in revenue during the second quarter of the year and continued cost-control measures. The group also matched its first quarter revenue of 21 percent in the second quarter.

“Revenue for the second quarter for the Cashbuild Group was up 21 percent on the second quarter of the prior financial year. The 303 existing stores’ revenue increased by 19 percent and the 14 new stores contributed 2 percent. This, combined with the growth reported in the first quarter, equates to an increase in revenue for the half-year of 21 percent compared to the prior half-year,” the group said.

However, the group expected to release a further trading statement once it had reasonable certainty on the range of the increase in earnings.

The group said transactions through the tills during the second quarter increased by 10 percent, but was up by 14 percent half-yearly compared to last year, with existing stores up by 11 percent in a six-month period.

The Cashbuild share price surged by more than 12 percent after the release of the trading update to R268.48 a share, up from Friday’s closing price of R238.98. The share closed at R262.33 on the JSE yesterday.

Cashbuild was negatively impacted last year by the closure of all its stores and P&L Hardware stores as well as the support office, with the exception of six stores in eSwatini, two stores in Malawi and three stores in Zambia, during level 5 of the lockdown.

It opened one new Cashbuild store in the second quarter and opened three for the six-month period.

The group also refurbished 11 Cashbuild and one P&L Hardware store in the past six months, relocated two Cashbuild stores and one P&L Hardware store.

The group closed one Cashbuild store and three P&L Hardware stores after the expiration of their lease agreements. The total number of stores trading at the end of the second quarter increased to 317.

BUSINESS REPORT

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