JSE-listed building materials retailer Cashbuild has described the financial year ended June 30 as one of its toughest yet, mostly owing to low consumer spending, increasing competition in the do-it-yourself (DIY) retail environment and challenges in some of the company’s major product categories.
Nonetheless, the company increased its gross profit by 6% to R2.7-billion, compared with R2.5-billion in the year ended June 30, 2018, with the gross profit margin declining from 25.2% to 25.1%.
Cashbuild declared a total dividend of R8.55 apiece for the reporting year, compared with R8.42 apiece in the prior year.
“This was achieved in tough trading conditions with selling price inflation of 3%. Very little has changed since our last year-end in terms of the trading conditions experienced,” CEO Werner de Jager said on Tuesday.
He added that operating expenses, which included expenses incurred at new stores, remained well controlled in the reporting year, increasing by only 7% to R2.16-billion, compared with R2.02-billion in the prior year, of which 3% was driven by like-for-like stores.
As a result, operating profit increased by 2% to R559-million in the reporting year, compared with R543-million in the prior year.
Earnings a share increased by 2% to R1.88 apiece in the reporting year, compared with R1.85 apiece in the prior year, while headline earnings a share increased by 2% to R1.91 in the reporting year, compared with R1.86 in the prior year.
During the year under review, Cashbuild opened 11 new stores, nine of which were Cashbuild stores and two were P&L Hardware stores. The company also refurbished 26 stores and relocated four stores.
Additionally, eight nonperforming stores were closed, five of which were Cashbuild stores and three of which were P&L Hardware stores.
The company now operates 315 stores, of which one is a DIY store and 59 are P&L Hardware stores, with the balance being Cashbuild stores.
De Jager expected trading conditions to remain “extremely” challenging for the foreseeable future.