Despite demanding trading conditions, South African retailer Cashbuild on Tuesday announced that it has, for the first time, exceeded the R10-billion group revenue mark.
Cashbuild CE Werner de Jager attributed the 5% year-on-year growth in group revenue largely to the 42 new stores that were opened since July 2016, with revenue for all stores that were established prior to this date, remaining at similar levels to that of last year.
Cashbuild now operates 318 stores, including seven Do-It-Yourself and 60 P&L Hardware stores.
De Jager added that selling price inflation had remained low at 2% owing to ongoing lacklustre economic conditions and severe pressure facing consumers.
Gross profit increased by 4%, with gross profit percentage being slightly lower at 25.2%, down from 25.5% in 2017.
“Operating expenses, including new stores, remained well controlled, only increasing by 9% – 3% in our existing stores and 6% owing to our new stores. Nevertheless, the uptick in revenue didn’t compensate for the increased expenses, resulting in our operating profit decreasing by 12%,” De Jager lamented on Tuesday.
The retailer’s basic earnings a share decreased by 10%, with headline earnings a share down 9% from the prior year.
Cashbuild’s statement of financial position remained solid, he added, noting that testimony to this is the increase of 14% in the net asset value a share, from 6 642c last year to 7 578c.
Cash and cash equivalents increased by 19% to R953-million, compared with R801-million in the prior year.
During the year, Cashbuild added 25 new stores, refurbished 27 stores and relocated six Cashbuild stores.
“We will continue our store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as we have in the past,” De Jager averred, adding that management believed trading conditions would remain challenging in the near to medium term.
He highlighted, however, that Cashbuild is well-placed to take advantage of any positive change in the economy through its “extensive network of stores and its in-depth quality product range, which is tailored to the specific needs of the communities it serves.”