Durban - Cashbuild is on the lookout for more acquisitions. New stores and acquisitions have boosted profits for the six months to end December.
In its latest results, Cashbuild, southern Africa’s largest retailer of quality building materials and associated products said the 44 P&L Hardware outlets, together with its nine new Cashbuild stores, helped the company to report a 15 percent increase in revenue to R5.2 billion for the period.
Shane Thoresson, operations director at Cashbuild, said P&L Hardware was responsible for 11 percent of the revenue and 4 percent was the contribution from Cashbuild’s new stores. “We would be looking for a similar performance from the new stores and acquisitions in the future,” said Thoresson.
The group said its existing 229 stores, prior to July 1, 2015, remained at similar revenue levels. It said it wanted to consolidate in its stores, but would look at possible acquisitions to add to the group’s profitability.
Focus
“We're looking for two stores as possible acquisitions in Port Elizabeth. But for us the focus is to get our established businesses performing at their best, with the right prices in the market and cut down on costs.
"In that way we can remain competitive in this tough business,” Thoresson added.
Read also: Cashbuild lifts operating profit by 19%
The group’s operating expenses were up by 18 percent to R949 million. Operating profit was up by 36 percent to R362 million as compared with the same period in 2015. The group reported an operating profit margin of 7 percent.
Damon Buss, an equity analyst at Electus Fund Managers, said the new stores and P&L Hardware delivered all the revenue growth in this period, which indicated the pressure Cashbuild’s existing stores were under (for example, they didn’t grow revenue in half year 2017). “This 0 percent revenue growth for existing stores and the stated 3 percent inflation implies like-for-like volumes were down 3 percent,” said Buss.
The board declared an interim dividend of 540cents a share, an increase of 5 percent on 513c a share as compared to 2015.
Cashbuild shares rose 0.82 percent to close at R370.01.