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Audited interim results and dividend declaration - December 2015
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 2015
REVENUE (Rm)
UP 14%
OPERATING PROFIT *EXCL BEE
UP 32%
HEADLINE EARNINGS *EXCL BEE
UP 36%
CASH AND CASH EQUIVALENTS (Rm)
UP 23%
DIVIDEND PER SHARE (cents)
UP 36%
STORE GROWTH (number)
UP 5%
SUMMARY CONSOLIDATED INTERIM INCOME STATEMENT – AUDITED
Six months Six months
ended ended
31 December 31 December 30 June
2015 2014 % 2015
R'000 (26 weeks) (26 weeks) change (52 weeks)
Revenue 4 509 710 3 967 929 14 7 692 646
Cost of sales (3 442 867) (3 026 041) 14 (5 844 200)
Gross profit 1 066 843 941 888 13 1 848 446
Selling and marketing expenses (635 175) (580 872) 9 (1 161 479)
Administrative expenses (111 218) (115 493) (4) (226 871)
Operating expenses (1 061) (1 854) (43) (3 352)
BEE transaction expense (Note 6) (63 052) – >100 –
Other income 11 472 6 352 81 7 759
Operating profit 267 809 250 021 7 464 503
Finance cost (317) (1 077) (71) (1 752)
Finance income 33 987 20 411 67 39 676
Profit before income tax 301 479 269 355 12 502 427
Income tax expense (106 458) (78 372) 36 (139 048)
Profit for the period 195 021 190 983 2 363 379
Attributable to:
- Owners of the company 193 168 189 280 2 358 916
- Non-controlling interests 1 853 1 703 9 4 463
195 021 190 983 2 363 379
Earnings per share (cents) 852.3 824.1 3 1 556.8
Diluted earnings per share (cents) 846.7 816.1 4 1 536.7
SUMMARY CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME – AUDITED
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2015 2014 2015
R'000 (26 weeks) (26 weeks) (52 weeks)
Profit for the period 195 021 190 983 363 379
Other comprehensive income re-classifiable to profit or loss:
Total movement in foreign currency translation reserve (FCTR) 12 712 (1 144) 2 272
Attributable to:
– Owners of the company 14 026 (584) 1 794
– Non-controlling interests (1 314) (560) 478
Total comprehensive income for the period 207 733 189 839 365 651
Total comprehensive income attributable to:
- Owners of the company 207 194 188 696 360 710
- Non-controlling interests 539 1 143 4 941
207 733 189 839 365 651
ADDITIONAL INFORMATION – AUDITED
Six months Six months
ended ended Year ended
31 December 31 December 30 June
R'000 2015 2014 2015
Net asset value per share (cents) 5 867 5 389 5 329
Net asset value per share (excl treasury shares) 6 520 5 910 5 822
Ordinary shares ('000s):
– In issue 25 190 25 190 25 190
– Weighted-average 22 665 22 968 23 055
– Diluted weighted-average 22 815 23 193 23 357
Capital investment 98 469 100 207 168 602
Depreciation of property, plant and equipment 54 500 52 321 105 821
Amortisation of intangible assets 7 857 6 962 14 700
Capital commitments 697 367 165 455 105 134
Property operating lease commitments 1 443 571 1 192 369 1 216 934
Contingent liabilities 1 411 1 411 2 216
SUMMARY CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION – AUDITED
31 December 31 December 30 June
R'000 2015 2014 2015
ASSETS
Non-current assets 989 184 933 190 950 895
Property, plant and equipment 873 028 830 430 836 252
Intangible assets 35 987 41 046 39 048
Rent prepayments 79 237 61 274 68 807
Deferred income tax assets 932 440 6 788
Current assets 2 700 655 2 335 429 2 117 533
Assets held for sale 916 14 322 9 548
Inventories 1 239 022 1 118 444 1 073 129
Trade and other receivables 119 768 115 696 95 939
Cash and cash equivalents 1 340 949 1 086 967 938 917
Total assets 3 689 839 3 268 619 3 068 428
EQUITY AND LIABILITIES
Shareholders' equity 1 498 749 1 374 535 1 362 745
Share capital and reserves 1 477 791 1 357 484 1 342 326
Non-controlling interests 20 958 17 051 20 419
Non-current liabilities 110 416 102 381 105 979
Deferred operating lease liability 110 416 102 381 105 979
Current liabilities 2 080 674 1 791 703 1 599 704
Trade and other liabilities 1 986 483 1 727 954 1 551 433
Current income tax liabilities 89 102 58 930 43 387
Employee benefits 5 089 4 819 4 884
Total equity and liabilities 3 689 839 3 268 619 3 068 428
SUMMARY CONSOLIDATED INTERIM CASH FLOW STATEMENT – AUDITED
Six months Six months
ended ended Year ended
31 December 31 December 30 June
R'000 2015 2014 2015
Cash flows from operating activities
Cash generated from operations 557 869 564 004 725 567
Interest paid (317) (1 077) (1 752)
Taxation paid (54 887) (48 274) (130 841)
Net cash generated from operating activities 502 665 514 653 592 974
Cash flows from investing activities
Net investment in assets (71 849) (90 559) (148 915)
Interest received 33 987 20 411 39 676
Net cash used in investing activities (37 862) (70 148) (109 239)
Cash flows from financing activities
Shares purchased by The Cashbuild Share – (1 685) (161 237)
Incentive Trust and The Cashbuild Operations
Management Member Trust
Shares sold by The Cashbuild Share Incentive Trust – 784 54 547
Dividends paid:
– own equity (76 192) (57 718) (143 630)
– non-controlling interests – (550) (980)
Net cash used in financing activities (76 192) (59 169) (251 300)
Net increase in cash and cash equivalents 388 611 385 336 232 435
Cash and cash equivalents at beginning of period 938 917 704 322 704 322
Effect of exchange rate movements on cash and cash equivalents 13 421 (2 691) 2 160
Cash and cash equivalents at end of period 1 340 949 1 086 967 938 917
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 2015 2014 2015 2015 2014 2015 2015 2014 2015 2015 2014 2015
Income statement
Revenue 4 509 710 3 967 929 7 692 646 3 985 947 3 468 947 6 732 667 315 062 314 589 599 648 208 701 184 393 360 331
Operating profit 267 809 250 021 464 503 223 357 215 993 394 039 20 537 26 471 48 371 23 915 7 557 22 093
Statement of financial position
Segment assets 3 689 839 3 268 619 3 068 428 2 989 118 2 649 626 2 457 852 428 735 413 183 392 983 271 986 205 810 217 593
Segment liabilities 2 191 090 1 894 084 1 705 683 1 921 742 1 622 338 1 477 423 166 681 188 901 148 989 102 667 82 845 79 271
Other segment items
Depreciation 54 500 52 321 105 821 48 695 47 281 95 394 2 787 2 625 5 400 3 018 2 415 5 027
Amortisation 7 857 6 962 14 700 7 857 6 962 14 700 – – – – – –
Capital investment 98 469 100 207 168 602 78 902 91 653 148 522 9 244 3 521 8 731 10 323 5 033 11 349
* Includes Namibia, Swaziland and Lesotho
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY – AUDITED
Attributable to owners of the company
Share-
Treasury Treasury based Non-
Share share Share share payments Retained controlling Total
R'000 capital capital premium premium reserve FCTR earnings interests equity
Balance at 1 July 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
Increase in shareholding of subsidiary – – – – – – (1 063) 1 063 –
Shares purchased by The Cashbuild Share Incentive Trust and – (1) – (1 684) – – – – (1 685)
The Cashbuild Operations Management Member Trust
Shares sold by The Cashbuild Share Incentive Trust – 1 – 783 – – – – 784
Dividend paid – – – – – – (57 718) (550) (58 268)
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
Total comprehensive income for the period – – – – – 2 378 169 636 3 798 175 812
Shares purchased by The Cashbuild Share Incentive Trust and The – (7) – (159 545) – – – – (159 552)
Cashbuild Operations Management Member Trust
Shares sold by The Cashbuild Share Incentive Trust – 5 – 53 758 – – – – 53 763
Dividend paid – – – – – – (85 912) (430) (86 342)
Recognition of share-based payments – – – – 4 529 – – – 4 529
Balance at 30 June 2015 252 (25) 65 823 (192 382) 45 091 (4 289) 1 427 856 20 419 1 362 745
Total comprehensive income for the period – – – – – 14 026 193 168 539 207 733
Dividend paid – – – – – – (76 192) – (76 192)
Recognition of share-based payments – – – – 4 463 – – – 4 463
Balance at 31 December 2015 252 (25) 65 823 (192 382) 49 554 9 737 1 544 832 20 958 1 498 749
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 as required by the JSE Limited Listings Requirements, 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
interim 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 interim financial statements have been
prepared under the supervision of the Finance Director, Mr AE Prowse CA(SA), and approved by the board on 29
February 2016.
2. Independent audit by the auditor. These summary consolidated interim financial statements for the period ended 31
December 2015 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 (2015: 27 December (26 weeks); 2014: 28 December (26 weeks); June 2015: 28 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 22 665 552 ordinary shares in issue at period end (2014:
22 967 632 shares; June 2015: 23 054 612).
5. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per
ordinary share are based on headline earnings of R185.8 million (2014: R183.0 million; June 2015: R352.3 million)
and a weighted average of 22 665 552 (2014: 22 967 632; June 2015: 23 054 612) shares and fully diluted of 22 815
173 (2014: 23 192 936; June 2015: 23 357 365) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the company and headline earnings:
R'000 Dec 2015 Dec 2014 % change Jun 2015
Net profit attributable to the owners of the company 193 168 189 280 2 358 916
Profit on sale of assets after taxation (7 356) (6 272) (6 585)
Headline earnings 185 812 183 008 2 352 331
Headline earnings per share (cents) 819.8 796.8 3 1 528.2
Diluted headline earnings per share (cents) 814.4 789.1 3 1 508.5
6. BEE transaction. A special resolution in terms of a specific repurchase was adopted by shareholders on 30
November 2015, whereby 200 000 shares would be repurchased by the company from the Cashbuild Empowerment Trust
("the Trust"). The related cost has been provided for as a personnel expense in the Groups results. The specific
repurchase of shares was effected on 29 January 2016 and the value created in the Cashbuild Empowerment Trust as
a result of this specific repurchase has been distributed to the beneficiaries of the Trust.
The financial impact at period end can be summarised as follows:
% increase % increase
R'000 Before BEE on 2014 After BEE on 2014
Operating profit 330 861 32 267 809 7
Attributable earnings 256 220 35 193 168 2
Net assets value per share (cents) 6 117 14 5 867 9
Headline earnings 248 864 36 185 812 2
Headline earnings per share (cents) 1 092.2 37 819.8 3
7. Declaration of dividend. The board has declared an interim dividend (No. 46), of 513 cents (2014: 376 cents) per
ordinary share out of income reserves (excluding the effects of the BEE transaction) to all shareholders of
Cashbuild Limited. The dividend per share is calculated based on 24 989 811 (2014: 25 189 811) shares in issue at
date of dividend declaration. Net local dividend amount is 436.05 cents per share for shareholders liable to pay
Dividends Tax and 513 cents per share for shareholders exempt from paying Dividends Tax. Local dividend tax is
15%.
Cashbuild Limited's tax reference number is 9575168712.
Date dividend declared: Monday, 29 February 2016
Last day to trade "CUM" the dividend: Wednesday, 16 March 2016
Date to commence trading "EX" the dividend: Thursday, 17 March 2016
Record date: Thursday, 24 March 2016
Date of payment: Tuesday, 29 March 2016
Share certificates may not be dematerialised or rematerialised between Thursday, 17 March 2016 and Thursday, 24 March
2016, both dates inclusive.
On behalf of the board
STEFAN FOURIE WERNER DE JAGER
Chairman Chief Executive
Johannesburg
29 February 2016
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 (228 at the end of this financial 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, 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 interim audited results in accordance with International Financial Reporting Standards
("IFRS").
FINANCIAL HIGHLIGHTS
Revenue for the period increased by 14% whilst gross profit increased by 13%. Operating expenses increased by 15%
(mainly is as a result of our BEE transaction) which resulted in an operating profit increase of 7%. Basic earnings per
share and headline earnings per share increased by 3%. Net asset value per share has shown a 9% increase, from 5 389
cents (December 2014) to 5 867 cents.
Revenue for stores in existence since the beginning of July 2014 (pre-existing stores – 213 stores) increased by 11%
while our 15 new stores contributed 3%. This increase for the period has been achieved in tough trading conditions with
selling price inflation of 2%. Gross profit percentage has been maintained at 23.7%.
Operational expenses for the period remained well controlled with existing stores accounting for 3% of the increase and
new stores 3%. The BEE transaction is responsible for the remaining operating expense increase of 9%.
The effective tax rate for the period of 35% is 6% higher than that of the previous period, mainly due to an increase in
non-deductible expenditure of the BEE transaction.
Cash and cash equivalents increased by 23% to 1 341 million. Stock levels have increased by 11% in line with increased
sales, with overall stockholding at 70 days (December 2014: 73 days) at the end of the period. Trade receivables remain
well under control.
During the first half, Cashbuild opened six new stores, seven stores were refurbished and one store relocated. The DIY
pilot continues with 10 Cashbuild DIY pilot stores (not included in the above 228 stores number). Cashbuild will
continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous
process as in the past.
EVENTS AFTER THE REPORTING PERIOD
Shareholders are advised that the purchase of 100% of the shareholding of P&L Hardware (Pty) Ltd was unconditionally approved by
The Competition Tribunal on 3 February 2016. Management is in the process of finalising the due diligence processes
and other conditions precedent. Take over date is expected to be within the first two weeks of March 2016.
PROSPECTS
With revenue for the first six weeks trading since period end having increased by 16% from the comparable six weeks,
management remains positive about top line trading prospects for the financial period. This information has not been
reviewed nor audited by the company's auditor.
1 March 2016
Directors: IS Fourie* (Chairman), WF de Jager (Chief Executive), HH Hickey*, AGW Knock*,
Dr DSS Lushaba*, D Masson*, 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 CIB
Cashbuild Limited (Registration number 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE code: CSB ISIN: ZAE000028320
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za
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