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Share code:CSB ISIN : ZAE000028320 CASHBUILD
* Headline earnings per share 71,09 equates to 40,3% 5 years compound growth.
* Gross profit R211m, up 26,5% on last year and 8,2% 5 year compound growth.
* Operating profit before exceptional item R25m 22,1% 5 year compound growth.
* Profit attributable to shareholders R11m 28,8% 5-year compound growth. * Dividend payment of 24 cents per share * R63m cash in bank * Sustainable results.
JOHANNESBURG - Cashbuild Ltd, South Africa's largest retailer of building material and associated products has announced record results in the history of the company during the 53-week trading period ending June 2001.
"The company achieved record results despite difficult trading conditions in the local building materials retail market," says Pat Goldrick, chief executive of Cashbuild Ltd.
Gross profit increased by 26,5% to R211,0m (on a limited sales growth of 2.8%). This improvement is as a result of growing sales in higher margin products and reducing shrinkage. Operating profit excluding exceptional items made an immediate turnaround to a record R25,5m as a result of
improving the financial management and fixing the controls within the business thus eliminating issues surrounding the accounting for inventory, which had a major negative impact on previous year's operating profits. This issue has now been fixed and will not re-occur.
The extraordinary item reflects a provision of R5,1m that has been raised against the loan of R8,5 m granted to the Cashbuild Share Incentive Trust. Although pegged at the share price ruling on 23 December 2000, taking a conservative outlook on the stock market, management believes it prudent to maintain the full provision.
The highest ever headline earnings per share achieved by the business of 71,09 cents has been enhanced by an additional 6 cents due to the extra trading week in the year under review. Goldrick states this is due entirely to normal trading during the year and some interest generated from growing cash balances.
The company traded cash positive during the last twelve months and has eliminated borrowing and closed the year with R63m in the bank.
Having restored the business to its former growth trends in profit,
Cashbuild has the advantage of resources in experienced, committed and capable management and cash in the bank to grow the business. Four new stores have been opened during the 12 months under review at the beginning of the financial year - Nhlangano (Swaziland), Hazyview (Mpumalanga) and more recently Montague Gardens (Cape Town), Meadowlands (Soweto), and since the financial year-end, Louis Trichardt.
Goldrick added: "We will grow our business by gaining profitable market share. We are responsible traders who do not debase markets or chase non- profitable sales. In line with our expansion policy, we will continue to add stores where acquisitions and new sites are identified that will give the required returns on the investment.
In improving corporate governance, a new non-executive director has been appointed to the Cashbuild Ltd board. A qualified chartered accountant, Francois Rossouw has been appointed chairman of the audit committee. With a retail financial background, Rossouw will be a valuable asset to the team. During the past six months Cashbuild has conducted in-depth climate surveys and market research via its employees, customers & suppliers. "The findings contained in this feedback has confirmed Cashbuild strengths. It has also identified opportunities that are being tackled enthusiastically, and that will further enhance our profits as we continue to grow profitable market share" , Goldrick concluded.
The company is paying a dividend of 24 cents per share. ENDS FOR MORE INFORMATION PLEASE CONTACT: Issued on behalf of : Cashbuild Ltd
Client Contact : Mr Pat Goldrick - Managing Director Tel No : (011) 248-1603 Cell : 082 800 3681 e-Mail : brenda@cashbuild.co.za Editorial Contact : Suza Adam Tel No : (011) 880-0364 Fax No : (011) 788-3697 e-Mail : southgro@icon.co.za Lindy Heunis Account Executive Southgro Investor Relations (Pty) Ltd + 27 11 880-0364 (t) + 27 11 788-3697 (f)
