South Africa’s largest retailer of building materials, Cashbuild, reported a 42% increase in profit for the six months ended December 2008, rising to R116,9-million the company reported on Tuesday.

Basic and headline earnings a share rose by 42% to 489,5 c a share, compared with the 344,4 c a share recorded in the corresponding period of 2007.

The increase in profit was attributed to a 39% improvement in the company’s operating profit, as well as a 63% increase in the net finance income.

Revenue increased by 28% to R2,57-million in the six-month period, from R2,01-million in the same period of 2007.

Stores in existence since the beginning of July 2007, accounted for 22% of the increase in revenue with the 20 new stores opened since then accounting for balance of the revenue increase.

Gross profit margins for the half-year were slightly higher in percentage terms at 21,5%, compared with the 21% recorded at December 2007, but in rand terms increased by 32%.

Cashbuild stated that its management remained confident about the trading prospects for the next quarter, based on the fact that the first eight trading weeks since the end of the six-month period had recorded a revenue increase of 29% on that of the comparable eight weeks.

The company would also continue its store expansion, relocation and refurbishment strategy in a controlled manner, with three new stores planned to open during the remainder of the financial year. During the period under review, two old stores were closed in towns where two stores were trading in close proximity, and two more were relocated.

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