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Audited interim results and dividend declaration December 2014
Cashbuild Limited (Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE code: CSB ISIN: ZAE000028320
Audited interim results and dividend declaration December 2014
Revenue up 12%
Operating profit up 31%
Headline earnings up 32%
Interim dividend per share up 37%
Net asset value per share up 12%
SUMMARY CONSOLIDATED INTERIM INCOME STATEMENT – AUDITED
Six months Six months
ended ended Year ended
31 Dec 2014 31 Dec 2013 % 30 Jun 2014
R'000 (26 weeks) (26 weeks) change (52 weeks)
Revenue 3 967 929 3 550 787 12 6 781 274
Cost of sales (3 026 041) (2 736 277) 11 (5 175 906)
Gross profit 941 888 814 510 16 1 605 368
Selling and marketing expenses (580 872) (526 971) 10 (1 051 550)
Administrative expenses (115 493) (100 602) 15 (200 734)
Operating expenses (1 854) (1 909) (3) (3 713)
Other income 6 352 5 952 7 8 195
Operating profit 250 021 190 980 31 357 566
Finance cost (1 077) (836) 29 (1 004)
Finance income 20 411 10 824 89 23 927
Profit before income tax 269 355 200 968 34 380 489
Income tax expense (78 372) (60 179) 30 (111 036)
Profit for the period 190 983 140 789 36 269 453
Profit attributable to:
Owners of the company 189 280 138 691 36 265 915
Non-controlling interests 1 703 2 098 (19) 3 538
190 983 140 789 36 269 453
Earnings per share (cents) 824.1 600.6 37 1 147.6
Diluted earnings per share (cents) 816.1 587.1 39 1 136.6
SUMMARY CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME – AUDITED
Six months Six months
ended ended Year ended
31 Dec 2014 31 Dec 2013 30 Jun 2014
R'000 (26 weeks) (26 weeks) (52 weeks)
Profit for the period 190 983 140 789 269 453
Other comprehensive income:
Total movement in foreign currency translation
reserve (FCTR) (1 144) 2 872 3 711
Attributable to:
– Owners of the company (584) 4 037 4 253
– Non-controlling interests (560) (1 165) (542)
Total comprehensive income for the period 189 839 143 661 273 164
Total comprehensive income attributable to:
Owners of the company 188 696 142 728 270 168
Non-controlling interests 1 143 933 2 996
189 839 143 661 273 164
ADDITIONAL INFORMATION – AUDITED
Six months Six months
ended ended Year ended
R'000 31 Dec 2014 31 Dec 2013 30 Jun 2014
Net asset value per share (cents) 5 389 4 799 4 858
Ordinary shares ('000s):
– In issue 25 190 25 190 25 190
– Weighted–average 22 968 23 090 23 171
– Diluted weighted–average 23 193 23 623 23 395
Capital investment 100 207 133 056 269 555
Depreciation of property, plant and equipment 52 321 42 683 87 351
Amortisation of intangible assets 6 962 6 649 13 237
Capital commitments 165 455 174 454 163 787
Property operating lease commitments 1 192 369 1 040 423 1 130 661
Contingent liabilities 1 411 1 411 1 411
SUMMARY CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION – AUDITED
R'000 31 Dec 2014 31 Dec 2013 30 Jun 2014
ASSETS
Non-current assets 933 190 777 606 873 144
Property, plant and equipment 830 430 704 584 794 174
Intangible assets 41 046 47 885 42 019
Rent prepayments 61 274 24 870 36 530
Deferred income tax assets 440 267 421
Current assets 2 335 429 2 092 428 1 743 011
Assets held for sale 14 322 12 397 12 393
Inventories 1 118 444 1 028 496 933 035
Trade and other receivables 115 696 138 236 93 261
Financial assets at fair value – 124 868 –
Cash and cash equivalents 1 086 967 788 431 704 322
Total assets 3 268 619 2 870 034 2 616 155
EQUITY AND LIABILITIES
Shareholders' equity 1 374 535 1 222 729 1 239 118
Share capital and reserves 1 357 484 1 208 816 1 223 723
Non-controlling interests 17 051 13 913 15 395
Non-current liabilities 102 381 101 666 100 217
Deferred operating lease liability 102 381 97 412 100 217
Deferred profit – 1 569 –
Borrowings – 2 685 –
Current liabilities 1 791 703 1 545 639 1 276 820
Trade and other liabilities 1 727 954 1 510 846 1 243 406
Current income tax liabilities 58 930 32 182 28 813
Employee benefits 4 819 2 611 4 601
Total equity and liabilities 3 268 619 2 870 034 2 616 155
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS – AUDITED
Six months Six months
ended ended Year ended
31 Dec 2014 31 Dec 2013 30 Jun 2014
R'000 (26 weeks) (26 weeks) (52 weeks)
Cash flows from operating activities
Cash generated from operations 564 004 836 521 929 670
Interest paid (1 077) (836) (1 004)
Taxation paid (48 274) (15 747) (70 127)
Net cash generated from operating activities 514 653 819 938 858 539
Cash flows from investing activities
Net investment in assets (90 559) (126 480) (261 968)
Decrease in financial assets – 5 000 125 628
Interest received 20 411 10 824 23 927
Net cash used in investing activities (70 148) (110 656) (112 413)
Cash flows from financing activities
Increase/(decrease) in other borrowings – 197 (250)
Shares purchased by The Cashbuild Share
Incentive Trust and The Cashbuild Operations
Management Member Trust (1 685) – (77 349)
Shares sold by The Cashbuild Share
Incentive Trust 784 – 21 763
Dividends paid
– own equity (57 718) (44 168) (107 763)
– non-controlling interests (550) (480) (1 061)
Increase in shareholding in subsidiary – – (2 238)
Net cash used in financing activities (59 169) (44 451) (166 898)
Net increase in cash and cash equivalents 385 336 664 831 579 228
Effect of exchange rate movements on
cash and cash equivalents (2 691) (218) 1 276
Cash and cash equivalents at beginning of period 704 322 123 818 123 818
Cash and cash equivalents at end of period 1 086 967 788 431 704 322
SUMMARY CONSOLIDATED INTERIM SEGMENTAL ANALYSIS – AUDITED
Group South Africa Other members of common monetary area* Botswana and Malawi
Six months ended Year ended Six months ended Year ended Six months ended Year ended Six months ended Year ended
31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June
R'000 2014 2013 2014 2014 2013 2014 2014 2013 2014 2014 2013 2014
Income statement
Revenue 3 967 929 3 550 787 6 781 274 3 468 947 3 089 049 5 889 869 314 589 299 442 568 700 184 393 162 296 322 705
Operating profit 250 021 190 980 357 566 215 993 166 007 311 405 26 471 19 504 34 718 7 557 5 469 11 443
Statement of financial position
Segment assets 3 268 619 2 870 034 2 616 155 2 649 626 2 318 384 2 072 733 413 183 368 597 354 062 205 810 183 053 189 360
Segment liabilities 1 894 084 1 647 305 1 377 037 1 622 338 1 394 376 1 155 662 188 901 177 609 151 474 82 845 75 320 69 901
Other segment items
Depreciation 52 321 42 683 87 351 47 281 38 199 78 209 2 625 2 537 5 251 2 415 1 947 3 891
Amortisation 6 962 6 649 13 237 6 962 6 649 13 237 – – – – – –
Capital investment 100 207 133 056 269 555 91 653 123 209 247 785 3 521 6 341 9 107 5 033 3 506 12 663
*Includes Namibia, Swaziland and Lesotho
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY – AUDITED
Attributable to owners of the company
Treasury Share-based Non-
Treasury Share share payments Retained controlling
R'000 Share capital share capital premium premium reserve FCTR earnings interests Total equity
Balance at 1 July 2013 252 (20) 65 823 (30 111) 21 887 (10 336) 1 055 481 13 460 1 116 436
Total comprehensive income for the period – – – – – 4 037 138 691 933 143 661
Dividends paid – – – – – – (44 168) (480) (44 648)
Recognition of share-based payments – – – – 7 280 – – – 7 280
Balance at 31 December 2013 252 (20) 65 823 (30 111) 29 167 (6 299) 1 150 004 13 913 1 222 729
Total comprehensive income for the period – – – – – 216 127 224 2 063 129 503
Dividends paid – – – – – – (63 595) (581) (64 176)
Shares sold by The Cashbuild Share Incentive Trust – 3 – 21 760 – – – – 21 763
Shares purchased by The Cashbuild Share Incentive Trust – (6) – (77 343) – – – – (77 349)
Recognition of share-based payments – – – – 6 648 – – – 6 648
Balance at 30 June 2014 252 (23) 65 823 (85 694) 35 815 (6 083) 1 213 633 15 395 1 239 118
Total comprehensive income for the period – – – – – (584) 189 280 1 143 189 839
Dividends paid – – – – – – (57 718) (550) (58 268)
Increase in shareholding of subsidiary – – – – – – (1 063) 1 063 –
Shares sold by The Cashbuild Share Incentive Trust – 1 – 783 – – – – 784
Shares purchased by The Cashbuild Share Incentive Trust and
The Cashbuild Operations Management Member Trust – (1) – (1 684) – – – – (1 685)
Recognition of share-based payments – – – – 4 747 – – – 4 747
Balance at 31 December 2014 252 (23) 65 823 (86 595) 40 562 (6 667) 1 344 132 17 051 1 374 535
NOTES TO THE SUMMARY CONSOLIDATED INTERIM FINANCIAL INFORMATION
1. Basis of preparation. The summary consolidated interim financial statements are prepared
in accordance with International Financial Reporting Standards ("IFRS"), the presentation and
disclosure requirements of IAS 34 – Interim Financial Reporting, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by
the Financial Reporting Standards Council and the requirements of the Companies Act of South
Africa applicable to summary financial statements. The accounting policies applied in the preparation
of the consolidated interim financial statements from which the summary consolidated interim
financial statements were derived are in terms of International Financial Reporting Standards and
are consistent with those accounting policies applied in the preparation of the previous consolidated
annual financial statements.The financial statements have been prepared under the supervision of the
financial director, Mr AE Prowse CA(SA), and approved by the board on 2 March 2015.
2. Independent audit by the auditor. These summary consolidated interim financial statements for the
six month period ended 31 December 2014 have been audited by PricewaterhouseCoopers Inc.,
who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion
on the consolidated interim financial statements from which these summary consolidated interim
financial statements were derived. 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 Sunday of the month (2014: 28 December (26 weeks); 2013: 29 December
(26 weeks); June 2014: 29 June (52 weeks).
4. Earnings per share. Earnings per share is calculated by dividing the earnings attributable to owners of
the company for the period by the weighted average number of 22 967 632 ordinary shares in issue
at period end (December 2013: 23 090 396 shares; June 2014: 23 171 020 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 R183.0 million (December 2013:
R138.6 million; June 2014: R265.2 million) and a weighted average of 22 967 632 (December 2013:
23 090 396 shares; June 2014: 23 171 020) and fully diluted of 23 192 936 (December 2013: 23 622
629; June 2014: 23 394 727) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the company and headline
earnings:
R'000 Dec 2014 Dec 2013 % change Jun 2014
Net profit attributable to the owners of
the company 189 280 138 691 36 265 915
Profit on sale of assets after taxation (6 272) (122) (692)
Headline earnings 183 008 138 569 32 265 223
Headline earnings per share (cents) 796.8 600.1 33 1 144.6
Diluted headline earnings per share (cents) 789.1 586.6 35 1 133.7
6. Declaration of dividend. The board has declared an interim dividend (No. 44), of 376 cents
(December 2013: 275 cents) per ordinary share out of income reserves to all shareholders of
Cashbuild Limited. The dividend per share is calculated based on 25 189 811 (2013: 25 189 811)
shares in issue at date of dividend declaration. Net local dividend amount is 319.6 cents per share
for shareholders liable to pay Dividends Tax and 376 cents per share for shareholders exempt from
paying Dividends Tax. Local dividend tax is 15% and there are no STC credits available for use.
Cashbuild Limited's tax reference number is 9575168712.
Date dividend declared: Monday, 2 March 2015
Last day to trade "CUM" the dividend: Friday, 20 March 2015
Date commence trading "EX" the dividend: Monday, 23 March 2015
Record date: Friday, 27 March 2015
Date of payment: Monday, 30 March 2015
Share certificates may not be dematerialised or rematerialised between Monday, 23 March 2015 and
Friday, 27 March 2015, both dates inclusive.
On behalf of the board
DONALD MASSON WERNER DE JAGER
Chairman Chief Executive
Johannesburg
2 March 2015
COMMENTARY
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 (217
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 other 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 met.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group is reporting its audited interim results in accordance with International Financial Reporting
Standards ("IFRS").
FINANCIAL HIGHLIGHTS
Revenue for the period increased by 12% whilst gross profit increased by 16%, with operating
expense growth contained at 11% resulted in an operating profit increase of 31%. Basic earnings per
share increased by 37% and headline earnings per share increased by 33%. Net asset value per share
has shown a 12% increase, from 4 799 cents (December 2013) to 5 389 cents.
Revenue for stores in existence since the beginning of July 2013 (pre-existing stores – 198 stores)
increased by 6% while our 19 new stores contributed 6%. This increase for the period has been
achieved in tough trading conditions with selling price inflation of 3.4%.
Due to continued focus on margins within the competitive environment, gross profit percentage
increased to 23.7% from the 22.9% of the prior comparative period.
Operational expenses for the period remained well controlled with existing stores accounting for 5%
of the increase and new stores 6%. The total increase for the period amounted to 11%.
The effective tax rate for the period of 29% is 1% lower than that of the previous period, mainly due
to an increase in exempt income from the sale of property in a neighbouring country.
Cashbuild's statement of financial position remains solid. Cash and cash equivalents increased by
38% to R1 087 million. Stock levels have increased by 9% in line with increased sales, with overall
stockholding at 73 days (December 2013: 76 days) at the end of the period. Trade receivables remain
well under control.
During the first half, Cashbuild opened four new stores, 12 stores were refurbished, four stores were
relocated and two stores trading in close proximity to other Cashbuild stores were closed.
Five Cashbuild DIY pilot stores (not included in the 217 stores number), were opened
during the period bringing the total number of these pilot stores trading at the end of the period to
11. Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled
manner, applying the same rigorous process as in the past.
PROSPECTS
With revenue for the first six weeks trading since period-end having increased by 14% from the prior comparative
period, management remains positive about top line trading prospects for the remainder of the
financial year. This information has not been reviewed nor audited by the company's auditor.
Directors: D Masson* (Chairman), WF de Jager (Chief Executive),
IS Fourie*, HH Hickey*, AGW Knock*, Dr DSS Lushaba*, AE Prowse,
NV Simamane*, SA Thoresson, A van Onselen (*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: 101 Northern Parkway, Ormonde, Johannesburg, 2091.
PO Box 90115, Bertsham, 2013
Transfer secretaries: Computershare Investor Services (Proprietary) Limited,
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
Auditor: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
www.cashbuild.co.za
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
Date: 03/03/2015 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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