Wrap Text
Audited results and dividend declaration for the year ended 30 June 2017
CASHBUILD LIMITED
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE code: CSB ISIN: ZAE000028320
AUDITED RESULTS AND DIVIDEND DECLARATION
for the year ended 30 June 2017
Revenue (Rm)
UP 12%
Operating profit *Excl BEE (Rm)
UP 1%
Headline earnings *Excl BEE (Rm)
DOWN 6%
NAV per share *Excl BEE (cents)
UP 11%
Total dividend *Excl BEE (cents)
DOWN 7%
Space growth *Excludes DIY stores (stores)
UP 5%
Summary consolidated income statement - audited
Year ended Year ended
30 June 2017 30 June 2016 %
R'000 (52 weeks) (52 weeks) change
Revenue 9 729 640 8 669 643 12
Cost of sales (7 248 711) (6 404 966) 13
Gross profit 2 480 929 2 264 677 10
Selling and marketing expenses (1 595 510) (1 418 609) 12
Administrative expenses (278 953) (241 142) 16
Other operating expenses (2 172) (3 123) (30)
BEE transaction expense (note 4) - (63 052) (100)
Other income 15 703 9 773 61
Operating profit 619 997 548 524 13
Finance cost (3 785) (921) >100
Finance income 40 814 71 084 (43)
Profit before income tax 657 026 618 687 6
Income tax expense (187 540) (176 685) 6
Profit for the year 469 486 442 002 6
Attributable to:
- Owners of the company 464 991 437 442 6
- Non-controlling interests 4 495 4 560 (1)
469 486 442 002 6
Earnings per share (cents) 2 047.7 1 920.4 7
Diluted earnings per share (cents) 2 046.7 1 919.5 7
Summary consolidated statement of comprehensive income - audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 (52 weeks) (52 weeks)
Profit for the year 469 486 442 002
Other comprehensive income reclassifiable to profit or loss:
Total movement in foreign currency translation reserve (FCTR) (20 833) 12 898
Attributable to:
- Owners of the company (18 974) 14 934
- Non-controlling interests (1 859) (2 036)
Total comprehensive income for the year 448 653 454 900
Total comprehensive income attributable to:
- Owners of the company 446 017 452 376
- Non-controlling interests 2 636 2 524
448 653 454 900
Additional information - audited
Year ended Year ended
R'000 30 June 2017 30 June 2016
Net asset value per share (cents) 6 642 5 776
Net asset value per share (excluding treasury shares) 7 309 6 337
Ordinary shares ('000s):
- In issue 24 990 24 990
- Weighted-average 22 708 22 779
- Diluted weighted-average 22 719 22 789
Capital investment 193 271 592 155
Depreciation of property, plant and equipment 122 425 117 181
Amortisation of intangible assets 11 870 11 590
Capital commitments 303 380 83 697
Property operating lease commitments 1 656 394 1 484 197
Contingent liabilities 38 908 41 727
Summary consolidated statement of financial position - audited
R'000 30 June 2017 30 June 2016
ASSETS
Non-current assets 1 481 122 1 430 879
Investment property - 1 900
Property, plant and equipment 978 615 929 163
Intangible assets 397 015 399 689
Rent prepayments 80 328 81 339
Deferred income tax assets 25 164 18 788
Current assets 2 232 120 2 108 067
Assets held for sale 4 345 4 510
Inventories 1 289 491 1 225 580
Trade and other receivables 122 462 90 994
Prepayments 14 402 11 029
Cash and deposits 801 420 775 954
Total assets 3 713 242 3 538 946
EQUITY AND LIABILITIES
Shareholders' equity 1 682 976 1 465 425
Share capital and reserves 1 659 768 1 443 477
Non-controlling interests 23 208 21 948
Non-current liabilities 198 469 184 432
Finance lease obligation 1 052 2 243
Deferred operating lease liability 137 051 118 475
Deferred income tax liability 37 480 30 706
Contingent consideration 22 886 33 008
Current liabilities 1 831 797 1 889 089
Trade and other liabilities 1 768 942 1 789 406
Finance lease obligation 1 191 1 110
Current income tax liabilities 61 664 71 858
Bank overdraft - 26 715
Total equity and liabilities 3 713 242 3 538 946
Summary consolidated statement of cash flows - audited
Year ended Year ended
R'000 30 June 2017 30 June 2016
Cash flows from operating activities
Cash generated from operations 651 625 761 718
Interest paid (3 785) (921)
Interest received - non-investing - 11 781
Taxation paid (197 336) (150 157)
Net cash generated from operating activities 450 504 622 421
Cash flows from investing activities
Net investment in assets (181 472) (163 434)
Business combinations (5 740) (378 901)
Interest received 40 814 59 303
Net cash used in investing activities (146 398) (483 032)
Cash flows from financing activities
Shares purchased by Cashbuild Trusts or subsidiary companies for share incentive
schemes (2 561) (244 541)
Shares sold by The Cashbuild Share Incentive Trust 2 526 95 716
Finance lease payments (1 110) -
Dividends paid:
- Own equity (234 023) (192 519)
- Non-controlling interests (1 376) (1 059)
Net cash used in financing activities (236 544) (342 403)
Net increase/(decrease) in cash and cash equivalents 67 562 (203 014)
Cash and cash equivalents at beginning of year 749 239 938 917
Effect of exchange rate movements on cash and cash equivalents (15 381) 13 336
Cash and cash equivalents at end of year 801 420 749 239
Summary consolidated statement of changes in equity - audited
Attributable to owners of the company
Share-based
Treasury share Treasury share payments Retained Non-controlling
R'000 Share capital capital Share premium premium reserve FCTR earnings interests Total equity
Balance at 1 July 2014 252 (23) 65 823 (85 694) 35 815 (6 083) 1 198 071 15 450 1 223 611
Total comprehensive income for the year - - - - - 1 794 356 703 4 950 363 447
Shares purchased by The Cashbuild Share Incentive Trust and
The Cashbuild Operations Management Member Trust - (8) - (161 229) - - - - (161 237)
Shares sold by The Cashbuild Share Incentive Trust - 6 - 54 541 - - - - 54 547
Increase in shareholding of subsidiary - - - - - - (1 063) 1 063 -
Dividends paid - - - - - - (143 630) (980) (144 610)
Recognition of share-based payments - - - - 9 276 - - - 9 276
Balance at 30 June 2015 252 (25) 65 823 (192 382) 45 091 (4 289) 1 410 081 20 483 1 345 034
Total comprehensive income for the year - - - - - 14 934 437 442 2 524 454 900
Buy-back of shares for empowerment transaction (2) 2 (61 888) 61 888 - - - - -
Shares purchased by The Cashbuild Share Incentive Trust and
Cashbuild (South Africa) Proprietary Limited - (7) - (244 534) - - - - (244 541)
Shares sold by The Cashbuild Share Incentive Trust - 7 - 95 709 - - - - 95 716
Dividends paid - - - - - - (192 519) (1 059) (193 578)
Recognition of share-based payments - - - - 7 894 - - - 7 894
Balance at 30 June 2016 250 (23) 3 935 (279 319) 52 985 10 645 1 655 004 21 948 1 465 425
Total comprehensive income for the year - - - - - (18 974) 464 991 2 636 448 653
Shares purchased by The Cashbuild Operations Management
Member Trust - - (2 561) - - - - - (2 561)
Shares sold by The Cashbuild Share Incentive Trust - - 2 526 - - - - - 2 526
Dividends paid - - - - - - (234 023) (1 376) (235 399)
Recognition of share-based payments - - - - 4 332 - - - 4 332
Balance at 30 June 2017 250 (23) 3 900 (279 319) 57 317 (8 329) 1 885 972 23 208 1 682 976
Summary consolidated segmental analysis - audited
South Africa
Other members of
Group Cashbuild business P&L Hardware business common monetary area* Botswana, Malawi and Zambia
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
R'000 30 June 2017 30 June 2016 30 June 2017 30 June 2016** 30 June 2017 30 June 2016** 30 June 2017 30 June 2016 30 June 2017 30 June 2016
Income statement
Revenue 9 729 640 8 669 643 7 787 042 7 587 742 960 454 61 458 595 995 601 403 386 149 419 040
Operating profit 619 997 548 524 535 787 453 292 32 378 1 601 38 378 51 995 13 454 41 636
Statement of financial position
Segment assets 3 713 242 3 538 946 2 407 381 2 357 562 540 125 474 719 496 554 434 769 269 182 271 896
Segment liabilities 2 030 266 2 073 521 1 509 869 1 631 174 249 770 202 747 173 217 148 937 97 410 90 663
Other segment items
Depreciation 122 425 117 181 107 428 104 970 2 823 298 6 038 5 600 6 136 6 313
Amortisation 11 870 11 590 11 622 11 389 - - 93 68 155 133
Capital investment 193 271 592 155 106 024 564 443 13 437 677 42 548 15 442 31 262 11 593
* Includes Namibia, Swaziland and Lesotho
** June 2016 results reflected South Africa combined
Notes to the summary consolidated financial information
1. Basis of preparation. The summary consolidated annual 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 annual financial statements. The accounting
policies applied in the preparation of the consolidated annual financial statements from which these summary consolidated
annual 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 annual
financial statements have been prepared under the supervision of the Finance Director, Mr AE Prowse CA(SA), and approved
by the board on 28 August 2017.
2. Independent audit by the auditor. These summary consolidated annual financial statements for the year
ended 30 June 2017 have been audited by PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon.
The auditor also expressed an unmodified opinion on the consolidated annual financial statements from which these
summary consolidated annual 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 (2017: 25 June (52 weeks); 2016: 26 June (52 weeks)).
4. BEE transaction. A special resolution in terms of a specific repurchase was adopted by shareholders on 30 November 2015,
whereby 200 000 shares were repurchased from The Cashbuild Empowerment Trust ("the Trust"). The related cost of
R61.890 million was classified as a personnel expense in the prior years group results and the related transaction costs were
R1.162 million. The specific repurchase of shares was effected on 29 January 2016.
The financial impact at year end can be summarised as follows:
June 2016 % 2017 June 2016 % 2017
R'000 June 2017 excl BEE increase on 2016 incl BEE increase on 2016
Operating profit 619 997 611 576 1 548 524 13
Attributable earnings 464 991 500 494 (7) 437 442 6
Net asset value per share (cents) 6 642 5 981 11 5 776 15
Headline earnings 464 433 493 928 (6) 430 876 8
Headline earnings per share (cents) 2 045.2 2 168.3 (6) 1 891.5 8
5. Declaration of dividend. The board has declared a final dividend (No. 49), of 390 cents (June 2016: 488 cents) per ordinary share
out of income reserves (prior year excluded the effects of the BEE transaction) to all shareholders of Cashbuild Limited. The
dividend per share is calculated based on 24 989 811 (June 2016: 24 989 811) shares in issue at date of dividend declaration. Net
local dividend amount is 312.00 cents per share for shareholders liable to pay Dividends Tax and 390 cents per share for
shareholders exempt from paying Dividends Tax. The total dividend for the year amounts to 930 cents (June 2016: 1 001 cents)
a 7% decrease on the prior year. Local Dividends Tax is 20%.
Cashbuild Limited's tax reference number is 9575168712.
Date dividend declared: Monday, 28 August 2017
Last day to trade "CUM" the dividend: Tuesday, 19 September 2017
Date to commence trading "EX" the dividend: Wednesday, 20 September 2017
Record date: Friday, 22 September 2017
Date of payment: Tuesday, 26 September 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 20 September 2017 and Friday,
22 September 2017, both dates inclusive.
6. Earnings per share. Earnings per share is calculated by dividing the earnings attributable to owners of the company for
the year by the weighted average number of 22 708 147 ordinary shares in issue at year end (June 2016: 22 779 353 shares).
7. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per ordinary
share are based on headline earnings of R464.4 million (June 2016: R430.9 million) and a weighted average of 22 708 147
(June 2016: 22 779 353) shares and fully diluted of 22 719 432 (June 2016: 22 788 839) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the company and headline earnings:
R'000 June 2017 June 2016 % change
Net profit attributable to the owners of the company 464 991 437 422 6
Profit on sale of assets after taxation (558) (6 566)
Headline earnings 464 433 430 876 8
Headline earnings per share (cents) 2 045.2 1 891.5 8
Diluted headline earnings per share (cents) 2 044.2 1 890.7 8
8. Acquisition of business. On 1 June 2016 the group acquired 100% of the business of P&L Hardware for a consideration
of R350 million and a further R80 million (fair value: R23 million) payable if certain profit targets are met over a three-year
period. In line with Cashbuild's strategy for growing market share, the rationale for the acquisition is to expand Cashbuild's
geographical footprint and market share. It is intended that P&L Hardware will remain and grow as a separate brand to
Cashbuild. There were no measurement adjustments made from the provisional values determined in the prior year.
On behalf of the board
STEFAN FOURIE WERNER DE JAGER
Chairman Chief Executive
Johannesburg
28 August 2017
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 (297 at the end of this financial year which includes the nine DIY
stores and 46 P&L Hardware stores). 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 the best value.
Cashbuild has built its credibility and reputation by consistently offering its customers quality building materials at the best value
and through a purchasing and inventory policy that ensures customers' requirements are always met.
International Financial Reporting Standards
The group is reporting its annual audited results in accordance with International Financial Reporting Standards ("IFRS").
Financial highlights
Revenue for the year increased by 12% whilst gross profit increased by 10%. Revenue for stores in existence prior to July 2015
(pre-existing stores - 219 stores, plus the nine Cashbuild DIY pilot stores) decreased by 2% while our 23 new stores contributed 4%
and P&L Hardware contributed 10% to revenue growth. This increase for the year has been achieved in tough trading conditions
with selling price inflation of 2%. Gross profit percentage has decreased to 25.5% from the 26.1% of the prior year, mainly due to
including P&L Hardware for the full year.
Operating expenses, excluding the BEE transaction in the prior year increased by 13% which resulted in an operating profit increase
of 1%. New stores contributed 5% and P&L Hardware 8% of the increase in operating costs, while existing stores remained well controlled
at similar levels.
The effective tax rate for the year of 29% is similar to that of the previous year.
Cash and cash equivalents increased by 3% to R801 million. Stock levels have increased by 5% with stockholding at 78 days
(June 2016: 77 days) at the end of the year. Net asset value per share has shown a 15% increase, from 5 776 cents (June 2016)
to 6 642 cents.
During the financial year, Cashbuild opened 12 new stores, 12 stores were refurbished, two stores were relocated and four P&L
Hardware stores were opened. Two stores were closed, one traded in close proximity to another Cashbuild store and the other reached
the end of its lease term. The DIY pilot continues with nine Cashbuild DIY pilot stores. Cashbuild will continue its store expansion,
relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as in the past.
Change in accounting policy in Cashbuild's annual financial statements for the year ended 30 June 2016 ("the 2016 Annual
Financial Statements").
The JSE has undertaken a proactive monitoring review of the 2016 Annual Financial Statements which detected that the change
in accounting policy relating to the treatment of advertising rebates as disclosed in the 2016 Annual Financial Statements was
incorrectly dealt with. The JSE's proactive monitoring process involved a referral to the Financial Reporting Investigation Panel and
concluded that the change in accounting policy should have been dealt with as a correction of a prior period error. Cashbuild
has accepted the JSE's decision in this matter. On the basis that the previous application by Cashbuild was also applied
retrospectively in 2016, the clarification of a prior period error does not change any amounts that were reported in the 2016 results.
Prospects
Group revenue for the subsequent six weeks after year end has increased by 6% on the comparable six week period. Management believe
trading conditions will remain extremely challenging. This information has neither been reviewed nor audited by the company's auditor.
28 August 2017
Directors:
IS Fourie* (Chairman), WF de Jager (Chief Executive), HH Hickey*, AGW Knock (British)*, 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, Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
Auditor:
PricewaterhouseCoopers Inc.
Sponsor:
Nedbank CIB
www.cashbuild.co.za
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
Date: 29/08/2017 07:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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