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CSB - Cashbuild Limited - Audited interim results december 2007
CASHBUILD LIMITED
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
Listed on the JSE Limited
JSE Share Code: CSB & ISIN: ZAE000028320
Audited Interim results DECEMBER 2007
REVENUE UP 15%; NET ASSET VALUE PER SHARE UP 33%; OPERATING PROFIT UP 21%;
HEADLINE EARNINGS UP 28%; CASH & CASH EQUIVALENTS UP 71%; DIVIDENDS UP 28%
CONDENSED GROUP INTERIM INCOME STATEMENT - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December % 30 June
R`000 2007 2006 change 2007
(26 weeks) (26 weeks) (53 weeks)
Revenue 2,011,325 1,744,427 15 3,448,386
Cost of sales (1,589,876) (1,383,998) 15 (2,709,854)
Gross profit 421,449 360,429 17 738,532
Selling and marketing expenses (263,185) (224,148) 17 (474,334)
Administrative expenses 46,515 (44,543) 4 (85,404)
Other operating expenses (2,089) (1,001) 109 (3,674)
Other income 1,469 908 62 7,228
Operating profit 111,129 91,645 21 182,348
Finance cost (911) (854) 7 (2,533)
Finance income 9,463 4,927 92 11,856
Profit before income tax 119,681 95,718 25 191,671
Income tax expense (37,412) (31,585) 18 (63,333)
Profit for the period 82,269 64,133 28 128,338
Attributable to:
Equity holders of the company 78,213 60,848 29 121,640
Minority interest 4,056 3,285 23 6,698
82,269 64,133 28 128,338
Earnings per share (cents) 344.4 268.4 28 536.3
Diluted earnings per share (cents) 344.4 268.4 28 536.3
ADDITIONAL INFORMATION - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R`000 2007 2006 2007
Net asset value per share (cents) 1,579 1,188 1,361
Ordinary shares (`000):
- In issue 25,805 25,805 25,805
- Weighted-average 22,709 22,672 22,681
- Diluted weighted-average 22,709 22,672 22,681
Capital expenditure 26,421 39,159 75,918
Depreciation of property, plant
and equipment 15,566 13,174 28,635
Amortisation of intangible assets 1,078 549 1,333
Impairment of intangible assets - 462 462
Capital commitments 155,575 42,049 75,445
Operating lease commitments 687,203 630,189 733,872
Contingent liabilities 12,077 2,251 12,376
CONDENSED GROUP INTERIM BALANCE SHEET - AUDITED
31 December 31 December 30 June
R`000 2007 2006 2007
ASSETS
Non-current assets 273,163 241,364 261,721
Property, plant and equipment 253,179 230,488 248,434
Intangible assets 9,346 5,833 5,047
Deferred income tax assets 10,638 5,043 8,240
Current assets 1,233,954 915,920 772,583
Assets held for sale 2,740 6,695 2,740
Inventories 674,144 564,094 609,308
Trade and other receivables 63,649 57,397 60,955
Cash and cash equivalents 493,421 287,734 99,580
Total assets 1,507,117 1,157,284 1,034,304
EQUITY AND LIABILITIES
Shareholders` equity 436,991 335,354 383,293
Share capital and reserves 407,436 306,692 351,218
Minority interest 29,555 28,662 32,075
Non-current liabilities 39,152 32,081 35,537
Deferred operating lease liability 35,520 28,586 31,982
Deferred profit 1,881 1,933 1,907
Deferred income tax liability - 16 3
Borrowings (non interest bearing) 1,751 1,546 1,645
Current liabilities 1,030,974 789,849 615,474
Trade and other liabilities 998,439 764,060 575,123
Current income tax liabilities 31,347 24,718 39,222
Employee benefits 1,188 1,071 1,129
Total equity and liabilities 1,507,117 1,157,284 1,034,304
CONDENSED GROUP INTERIM STATEMENT OF CHANGES IN EQUITY - AUDITED
R`000
Attributable to equity holders of the company
Treasury Treasury Cum.
Share share Share share translation Retained Minority Total
capital capital premium premium adjustment earnings interest equity
Balance at 1 July 2006
258 (30) 115,817 (85,998) (6,850) 235,712 27,936 286,845
Profit for the period
- - - - - 60,848 3,285 64,133
Dividend paid - final 2006
- - - - - (13,150) (2,559) (15,709)
Currency translation adjustments
- - - - 85 - - 85
Balance at 31 December 2006
258 (30) 115,817 (85,998) (6,765) 283,410 28,662 335,354
Profit for the period
- - - - - 60,792 3,413 64,205
Dividend paid - interim 2007
- - - - - (17,912) - (17,912)
Treasury shares movement
- 1 - 2,312 - - - 2,313
Currency translation adjustments
- - - - (667) - - (667)
Balance at 30 June 2007
258 (29) 115,817 (83,686) (7,432) 326,290 32,075 383,293
Profit for the period
- - - - - 78,213 4,056 82,269
Dividend paid - final 2007
- - - - - (21,347) (6,576) (27,923)
Currency translation adjustments
- - - - (648) - - (648)
Balance at 31 December 2007
258 (29) 115,817 (83,686) (8,080) (383,156) 29,555 436,991
CONDENSED GROUP INTERIM CASH FLOW STATEMENT - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R`000 2007 2006 2007
Cash flows from operating activities
Cash generated from operations 487,006 250,777 120,421
Interest paid (911) (854) (2,533)
Taxation paid (47,688) (44,384) (64,838)
Net cash generated from operating
activities 438,407 205,539 53,050
Cash flows from investing activities
Net investment in assets (26,212) (39,139) (66,233)
Interest received 9,463 4,927 11,856
Net cash used in investing activities (16,749) (34,212) (54,377)
Cash flows from financing activities
Net treasury shares movement - - 2,313
Increase in borrowings 106 92 191
Dividends paid
- own equity (21,347) (13,150) (31,062)
- minorities (6,576) (2,559) (2,559)
Net cash used in financing activities (27,817) (15,617) (31,117)
Net increase/(decrease) in cash and cash
equivalents 393,841 155,710 (32,444)
Cash and cash equivalents at
beginning of period 99,580 132,024 132,024
Cash and cash equivalents at
end of period 493,421 287,734 99,580
CONDENSED GROUP INTERIM SEGMENTAL ANALYSIS - AUDITED
South Africa
R`000 Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Income statement
Revenue 1,659,897 1,430,440 2,843,136
Operating profit 88,111 72,043 150,272
Balance sheet
Segment assets 1,206,464 859,197 814,280
Segment liabilities 880,198 619,987 536,731
Other segment items
Depreciation 13,542 11,186 24,618
Amortisation 1,061 549 1,298
Impairment - 462 462
Capital expenditure 25,934 34,178 66,926
Other members of common monetary area *
R`000 Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Income statement
Revenue 213,110 198,951 382,039
Operating profit 11,583 7,554 16,593
Balance sheet
Segment assets 172,104 192,207 118,612
Segment liabilities 99,833 122,434 42,157
Other segment items
Depreciation 1,405 1,495 2,927
Amortisation - - -
Impairment - - -
Capital expenditure 418 4,644 6,476
*Includes Namibia, Swaziland and Lesotho
Botswana and Malawi
R`000 Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Income statement
Revenue 138,318 115,036 223,211
Operating profit 11,435 12,048 15,483
Balance sheet
Segment assets 128,549 105,880 101,412
Segment liabilities 90,095 79,509 72,123
Other segment items
Depreciation 619 493 1,090
Amortisation 17 - 35
Impairment - - -
Capital expenditure 69 337 2,516
Group
R`000 Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Income statement
Revenue 2,011,325 1,744,427 3,448,386
Operating profit 111,129 91,645 182,348
Balance sheet
Segment assets 1,507,117 1,157,284 1,034,304
Segment liabilities 1,070,126 821,930 651,011
Other segment items
Depreciation 15,566 13,174 28,635
Amortisation 1,078 549 1,333
Impairment - 462 462
Capital expenditure 26,421 39,159 75,918
NOTES TO THE CONDENSED GROUP INTERIM FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated interim financial
information ("financial information") announcement is based on the audited
interim financial statements of the group for the period ended 31 December 2007
which have been prepared in accordance with International Financial Reporting
Standards ("IFRS")and the presentation and disclosure requirements of IAS 34 -
Interim Financial Reporting, the Listings Requirements of the JSE Limited and
the South African Companies Act (1973).
2. Independent audit by the auditors. These condensed consolidated interim
results have been audited by our auditors PricewaterhouseCoopers Inc., who have
performed their audit in accordance with the International Standards on
Auditing. A copy of their unqualified audit report is available for inspection
at the registered office of the company.
3. Reporting period. The group adopts the retail accounting calendar, which
comprises the reporting period ending on the last Saturday of the month (2007:
29 December (26 weeks); 2006: 23 December (26 weeks); June 2007: 30 June (53
weeks)).
4. Earnings per share. Earnings per share is calculated by dividing the earnings
attributable to shareholders for the period by the weighted average number of
22,709,487 ordinary shares in issue during the year. (December 2006: 22,672,800
shares; June 2007: 22,680,722 shares).
5. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline earnings
of R 78.7 million (December 2006: R 61.3 million; June 2007: R 119.8 million)
and a weighted average of 22,709,487 (December 2006: 22,672,800; June 2007:
22,680,722) and fully diluted of 22,709,487 (December 2006: 22,672,800; June
2007: 22,680 722) ordinary shares in issue. Reconciliation between net profit
attributable to the equity holders of the company and headline earnings:
R`000 Dec-07 Dec-06 % change Jun-07
Net profit attributable to the
company`s equity holders 78,213 60,848 29 121,640
Impairment of goodwill - 462 462
Loss/(profit) on sale of assets
after taxation 464 30 (2,351)
Headline earnings 78,677 61,340 28 119,751
Headline earnings per share (cents) 346.5 270.6 28 528.0
Diluted headline earnings per share
(cents) 346.5 270.6 28 528.0
6. Declaration of dividend. The board has declared an interim dividend (No. 30),
of 101 cents (December 2006: 79 cents) per ordinary share to all shareholders of
Cashbuild Limited. The dividend per share is calculated based on 25,805,347
shares in issue at date of dividend declaration.
Date dividend declared: Monday, 17 March 2008
Last day to trade "CUM" the dividend: Friday, 4 April 2008
Date commence trading "EX" the dividend: Monday, 7 April 2008
Record date: Friday, 11 April 2008
Date of payment: Monday, 14 April 2008
Share certificates may not be dematerialised or rematerialised between Monday, 7
April 2008 and Friday, 11 April 2008, both dates inclusive.
On behalf of the board
DONALD MASSON PAT GOLDRICK
Chairman Chief executive
Johannesburg Date: 17 March 2008
COMMENTS
NATURE OF BUSINESS
Cashbuild is southern Africa`s largest retailer of quality building materials
and associated products, selling direct to a cash-paying customer-base through
our constantly expanding chain of stores (166 at the end of this reporting
period). Cashbuild carries an in-depth quality product range tailored to the
specific needs of the communities we serve. Our customers are typically home-
builders and improvers, contractors, farmers, traders, large construction
companies and government-related infrastructure developers, as well as all
customers requiring quality building materials at lowest prices.
Cashbuild has built its credibility and reputation by consistently offering its
customers quality building materials at the lowest prices and through a
purchasing and inventory policy that ensures customers` requirements are always
in stock.
FINANCIAL HIGHLIGHTS
Revenue for the period increased by 15% whilst profit increased by 28%. This
growth in profit was the result of an improvement in operating profit of 21% as
well as a 110% increase in net finance income. Basic earnings per share as well
as headline earnings per share improved by 28%. Net asset value per share has
increased by 33%, from 1 188 cents (December 2006) to 1 579 cents. Cash and cash
equivalents have increased by 71% supported by a favourable December trading
period, fewer stores opened, as well as a 31% increase in trade payables.
Stores in existence since the beginning of July 2006 (pre-existing stores)
accounted for 9% of the increase in revenue with the remaining 6% increase due
to the 17 new stores the group has opened since July 2006. The increase for the
period has been achieved on the back of steady revenue growth in both the first
and second quarters of this financial year. Gross profit margins for the period
were slightly higher in percentage terms at 21.0% (December 2006 - 20.7%), but
in rand terms the increase is a pleasing 17%.
Operational expenses for the period remained well controlled with existing
stores accounting for 10% of the increase. New stores accounted for 5%, the
total increase for the period being 15%. The main contributor to the higher than
inflation increase on existing stores is the continued investment in people to
maintain and improve customer service standards, as well as customer delivery
expenses that follow in close correlation to revenue movements. The lower number
of stores opened during the half year had a positive impact on expenses as the
pre-opening costs were lower than those of the comparable period. These costs
will be higher during the second half due to the number of stores we plan to
open and refit during the second half.
The effective tax rate of 31% for the period is lower than the prior period,
mainly due to the 1% reduction in the South African Companies tax rate from 29%
to 28%.
Cashbuild`s balance sheet remains solid. Stock levels have increased by 20% on
the back of higher trading volumes with the Cashbuild stock model being adhered
to by line management. This increase is further attributable to the stocking of
seven additional stores since the previous half year (accounting for 5% of the
increase). Overall stockholding at 68 days (December 2006: 69 days; June 2007:
72 days) showed a slight improvement on the prior period and remains well within
acceptable parameters. Trade receivables remain well under control.
During the period Cashbuild opened two new stores. One store was relocated
during the period as well as five stores refurbished. Cashbuild will continue
its store expansion, relocation and refurbishment strategy in a controlled
manner, with eight to ten new stores planned to open during the second half.
PROSPECTS
Management remains confident about the trading prospects for the remainder of
the financial year. The first 10 trading weeks since half year-end have reported
an increase in revenue in the region of 21% on that of the comparable 10 weeks.
Directors: D Masson* (Chairman), PK Goldrick (Chief executive) (Irish), WF de
Jager, J Molobela*, KB Pomario, FM Rossouw*, NV Simamane*, SA Thoresson, A van
Onselen
(*Non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: cnr Aeroton and Aerodrome Roads, Aeroton, Johannesburg 2001
PO Box 90115, Bertsham 2013
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Auditors: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za
Date: 17/03/2008 13:08:47 Supplied by www.sharenet.co.za
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