JSE-listed building materials and products retailer Cashbuild has declared an interim dividend of 587c a share out of income reserves for the six months ended December 26, 2021.

Its revenue for the six months under review, however, decreased by 12% to R5.89-billion, from R6.70-billion for the six months ended December 2020.

If the 36 stores looted during the July 2021 riots are excluded, revenue decreased by only 5% to R5.66-billion from R5.94-billion in the comparable period in 2020.

Despite Cashbuild's gross profit for the six months under review having decreased by 11% year-on-year to R1.56-billion, the gross profit margin increased to 26.6% from 26.4% in the prior comparable period, the company says.

Further, operating expenses, including new stores, were well controlled considering the revenue decline, reducing by 10%, with the existing stores' reduction in operating costs of 12% partially offset by a 2% increase in new stores’ costs, resulting in the operating profit decreasing by 14% year-on-year to R492-million.

Excluding the looted stores, operating profit decreased by 7% to R465-million from R497-million in the prior comparable period.

“Management expects trading conditions to remain challenging owing to the ongoing long-term effect of Covid-19 and the high unemployment rate. Inflation is expected to remain at high levels, impacting the affordability of products and placing pressure on sales growth,” says Cashbuild CE Werner de Jager.

Basic earnings a share declined by 19% to 1 295c from 1 595c in the interim period to December 2020, while headline earnings a share decreased by 27%.

Further, cash and cash equivalents decreased by 33% to R1.88-billion, mainly as a result of the substantial final dividend paid and costs of looted stores not yet recovered from insurance. Stock levels at period end, including new stores, have increased by 10%, with stockholding at 79 days, up from 68 days as at December 26, 2020, and 74 days as June 30, 2021.

Cashbuild's net asset value a share decreased by 5% to 9 175c.

During the interim period, Cashbuild opened two new Cashbuild stores, refurbished five Cashbuild stores and relocated one Cashbuild store. Three looted Cashbuild stores and one P&L Hardware store were closed at the expiration of their lease agreements.

Further, 25 Cashbuild stores and three P&L Hardware stores that were looted have since been reopened.