Cashbuild Heps Up 22% Sustained Profitability Due To Focus On Core

Strategies
Cashbuild Ltd
Registration Number: 1986/001503/06
JSE Code: CSB
ISIN Code: ZAE000028320
NEWS RELEASE
CASHBUILD HEPS UP 22%,

SUSTAINED PROFITABILITY DUE TO FOCUS ON CORE STRATEGIES

JOHANNESBURG - JSE Securities Exchange-listed retailer, Cashbuild Ltd, today
announced results for the 26 weeks trading period ended 29 December 2001,
saying that it had not only grown cash resources, but that it had also
improved profitability.

"Over the six months period, we have focused on improving the quality of
earnings", states Pat Goldrick, chief executive of Cashbuild Limited. Whilst
turnover remained static at R539,8 million, operating profit before tax and
exceptional items improved by 32% up from R12,3 million to R16,2 million.
The 5% reduction in the cost of sales comes as a result of the continued
emphasis on stock management; rooting out shrinkage, obsolescence and
unwarranted markdowns. Improved purchasing strategies, stocking a higher
margin product mix, as well as matching product ranges to community needs
enhanced sales margins. "Setting a new standard for the retail industry,
Cashbuild has reduced shrinkage to 0,38% of sales, which confirms the
abilities of our management and the excellent controls within the business,"
states Goldrick.

The enhanced profitability also stems from the adherence to proven business
strategies, among which `being the cheapest in the community in which
Cashbuild trades', `to always be in stock', and to offer a `dependable
customer delivery service'. "We have deliberately increased stock levels, to
eliminate any possible customer disappointment due to the inability to
complete the purchase," explains Goldrick.

The implementation of these strategies, however, also had a short-term
influence on sales. In concentrating on improving retail strategies during
the first quarter, management decided to pull back advertising until all
fundamentals were in place.

Advertising was resumed by end-September, turnover picked up strongly from
that point on, with the result that Cashbuild experienced its most
successful December trading period ever.

During the year, Cashbuild expanded its number of outlets to 101 stores with
the recent store introductions in Louis Trichardt, Gaborone (Botswana),
Sibayeni (Naas, Mpumalanga) and Edenvale. The latter represents the first
venture into a truly urban market, which offers a practical shopping

environment and a broader product selection, stocked in-depth to meet the
specific needs of city dwellers.

All four stores are meeting or beating internal projections for month-on-
month growth in market share, as well as in profitability.

"The 1,5 million Pula invested in our first-class Gaborone store was

essential to expanding our current 10% market share of Botswana's building
materials retail market. Botswana is maintaining one of the highest economic
growth rates in the developing world. We anticipate that our stores in
Botswana will continue to contribute substantially to the group," states
Goldrick.

"It is the company's intention to open up to 10 stores per year in southern
Africa. Our cash flow remains strong despite the recent store openings,
closing the half year with R116 million in the bank (2000: R84 million).
This underlying strength will assist the company to fund further expansion
internally," states Craig Daly, financial director of Cashbuild.

In December, the company embarked on a refurbishment program to upgrade all
stores over a five-year period. A project manager has been appointed to
ensure business continuity. The first store to benefit will be Manzini in
Swaziland.

"Building on past successes, Cashbuild is growing its market share in
supplying building materials to large construction companies. The company
has also focusing on business from Government, relating to large-scale
infrastructural developments, and will continue to pursue opportunities in
this market," Goldrick concludes.

In line with company policy, no interim dividend has been declared.
ENDS
Note to the editor:

Cashbuild is the largest retailer of building material and associated
products, selling directly to a cash paying customer base via its chain of
101 and growing branded stores throughout southern Africa. Stores carry a
focused, in-depth quality product range to meet the needs of the local
market for home builders and home improvers, contractors, farmers and
traders.
For more information, please contact:
Mr Pat Goldrick
Chief Executive
Mr Craig Daly
Financial Director
Cashbuild Limited
Tel: (011) 248-1500
Fax: (011) 494-1935