CASHBUILD LTD - AUDITED GROUP RESULTS

CASHBUILD LTD
THE BUILDERS' DISCOUNT STORE
(REGISTRATION NUMBER 86/01503/06)

AUDITED GROUP FINANCIAL RESULTS FOR THE 52 WEEKS ENDED 27 JUNE 1998
HIGHLIGHTS
TURNOVER INCREASE BY 17.6%
HEADLINE EARNINGS PER SHARE INCREASED BY 35.1%
RETURNING TO DIVIDEND PAYMENT

SUMMARISED INCOME STATEMENT       52 WEEKS     52 WEEKS      PERCENTAGE
                                  ENDED        ENDED         CHANGE

                                  27.6.98      28.06.97

(R'000)                                                      %

TURNOVER                          910 217      773 787       17.6

OPERATING INCOME                  20 787       20 532        1.2

NET FINANCING CHARGES             (6 349)      (7 715)

INCOME BEFORE TAXATION            14 438       12 817        12.6

TAXATION                          (4 596)      (4 663)

INCOME AFTER TAXATION             9 842        8 154         20.7
OUTSIDE SHAREHOLDERS'

INTEREST                          (1 152)      (1 266)
INCOME ATTRIBUTABLE TO

SHAREHOLDERS                      8 690        6 888         26.2
NUMBER OF SHARES IN ISSUE

(THOUSANDS)                       23 225       23 225

EARNINGS PER SHARE (CENTS)        37.4         29.7          26.2
HEADLINE EARNINGS PER SHARE

(CENTS)                           37.3         27.6          35.1
DIVIDENDS PER SHARE (CENTS)       12.0         -
DIVIDEND COVER (TIMES)            3.1          N/A

SUMMARISED BALANCE SHEET          27.6.98      28.06.97
(R'000)

SHAREHOLDERS' FUNDS               67 680       61 777

OUTSIDE SHAREHOLDERS INTEREST     4 241        4 360

INTEREST-BEARING DEBT             6 396        44 928

                                  78 317       111 065

FIXED ASSETS                      61 285       66 990

INVESTMENTS                       6 454        5 876

CURRENT ASSETS                    191 080      188 297

TOTAL ASSETS                      258 819      261 163

INTEREST-FREE LIABILITIES         180 502      150 065

                                  78 317       11L 098
NET ASSET VALUE PER SHARE (CENTS) 310          285

SUPPLEMENTARY INFORMATION         52 WEEKS     52 WEEKS

                                  ENDED        ENDED

                                  27.6.98      28.06.97
(R'000)

1. DEPRECIATION                   12 592       9 704

2. CAPITAL EXPENDITURE            14 432       26 827

                                  27.6.98      28.06.97

3. CAPITAL COMMITMENTS            3 000        21 594
4. INVESTMENTS: UNLISTED AT COST

   AND DIRECTORS' VALUATION       6 454        5 876

5. CASH AT BANK                   9 081        4 795

6. CURRENT LIABILITIES            177 016      146 984

7. DEFERRED TAXATION              3 486        3 114

8. CONTINGENT LIABILITIES         12 252       12 252
COMMENTARY ON THE RESULTS

THE GROUP HAS MADE FURTHER PROGRESS DURING THE 52 WEEKS ENDED 27 JUNE 1998
TOWARDS ACHIEVING ITS OBJECTIVE OF BEING THE PREMIER MASS RETAILER OF BUILDING
MATERIALS AND ASSOCIATED PRODUCTS IN THE SOUTHERN AFRICAN REGION. DIFFICULT
TRADING CONDITIONS EXISTED IN THE PERIOD UNDER REVIEW, WITH RETAIL TRADING
CONDITIONS BEST DESCRIBED AS SUBDUED.

AGAINST THIS BACKGROUND, IT IS PLEASING TO REPORT THAT THE GROUP ACHIEVED
HEADLINE EARNINGS PER SHARE OF 37.3 CENTS FOR THE 52 WEEKS ENDED 27 JUNE 1998.
THIS REPRESENTS A 35.1% INCREASE ON THE PREVIOUS YEAR. IN ADDITION, THE GROUP
HAS DECLARED ITS FIRST DIVIDEND FOR THREE YEARS.

TURNOVER AMOUNTED TO R 910 MILLION, AN INCREASE OF 17.6% ON THE PRIOR YEAR
WHICH CONTAINED AN EQUIVALENT NUMBER OF WEEKS. THIS STRONG SHOWING CAN BE
ATTRIBUTED TO EFFECTIVE MICRO ADVERTISING CAMPAIGNS AND MORE APPROPRIATE
PRODUCT STOCKING, AND WAS ACHIEVED AGAINST THE BACKGROUND OF THE PREVAILING LOW
RATE OF INFLATION.

THE IMPACT OF COMPETITOR ACTIVITY WAS FELT IN THE TRADING MARGIN, BUT WAS
OFFSET TO A LIMITED EXTENT BY ENHANCED REBATE INCOME ARISING FROM THE

CONSOLIDATION OF THE SUPPLIER BASE. FURTHER, CERTAIN UNFORESEEN COSTS

ASSOCIATED WITH THE GROUP'S REPOSITIONING FROM WHOLESALER TO RETAILER WERE
INCURRED.
CURRENT TRADING CONDITIONS AND FUTURE PROSPECTS

TRADING IN THE CURRENT YEAR IS MEETING EXPECTATIONS AND WE ARE CONFIDENT THAT
CASHBUILD WILL CONTINUE TO GAIN MARKET SHARE AS A RESULT OF IMPROVED OPERATING
STANDARDS, A CLEAR PRICING POLICY AND THE CONTINUED FOCUS ON MICRO MARKETING.
THE IMPROVED VOLUMES RESULTING FROM THESE MARKET SHARE GAINS WILL BE COMBINED
WITH STRICT COST CONTROL AND THE AGGRESSIVE MANAGEMENT OF WORKING CAPITAL.
CONSEQUENTLY, THE GROUP IS CONFIDENT THAT REAL EARNINGS GROWTH WILL BE ACHIEVED
IN THE CURRENT FINANCIAL YEAR. POSITIVE CASH FLOWS ARE ANTICIPATED.

WE BELIEVE THAT EXISTING STORES WILL CONTINUE TO OFFER OPPORTUNITIES FOR
ORGANIC GROWTH, AND AS SUCH UNDERPIN THE INHERENT GROWTH POTENTIAL OF

CASHBUILD. IT IS UNLIKELY THAT NEW STORES WILL BE OPENED THIS FINANCIAL YEAR.
HOWEVER, IF APPROPRIATE, ACQUISITIONS AND INVESTMENT IN NEW STORES WILL BE
CONSIDERED ONLY IF THEY MEET STRICT FINANCIAL CRITERIA.
DIVIDENDS

THE BOARD HAS DECLARED A FINAL DIVIDEND OF 12 CENTS A SHARE (1997 : NIL) IN
RESPECT OF THE YEAR ENDED 27 JUNE 1998. DIVIDEND COVER IS 3.1 TIMES. THE
DIVIDEND WILL BE PAID ON 23 OCTOBER 1998 TO SHAREHOLDERS REGISTERED AT THE
CLOSE OF BUSINESS ON THE 25 SEPTEMBER 1998.
ON BEHALF OF THE BOARD OF DIRECTORS

C STASSEN                                                  PK GOLDRICK
CHAIRMAN                                                   MANAGING DIRECTOR
26 AUGUST 1998
MEMBER OF THE PEPKOR GROUP