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Audited results and dividend declaration for the year ended 30 June 2018
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 2018
REVENUE (Rm)
up 5%
OPERATING PROFIT (Rm)
down 12%
HEADLINE EARNINGS (Rm)
down 9%
NET ASSET VALUE PER SHARE (cents)
up 14%
TOTAL DIVIDEND PER SHARE (cents)
down 9%
SPACE GROWTH (stores)
up 7%
SUMMARY CONSOLIDATED INCOME STATEMENT - AUDITED
Year ended Year ended
30 June 2018 30 June 2017 %
R'000 (52 weeks) (52 weeks) change
Revenue 10 207 603 9 729 640 5
Cost of sales (7 639 019) (7 248 711) 5
Gross profit 2 568 584 2 480 929 4
Selling and marketing expenses (1 778 355) (1 595 510) 11
Administrative expenses (267 566) (278 953) (4)
Other operating expenses (10 263) (2 172) >100
Other income 30 926 15 703 >100
Operating profit 543 326 619 997 (12)
Finance cost (3 143) (3 785) (17)
Finance income 54 128 40 814 33
Profit before income tax 594 311 657 026 (10)
Income tax expense (169 063) (187 540) (10)
Profit for the year 425 248 469 486 (9)
Attributable to:
- Owners of the company 420 609 464 991 (10)
- Non-controlling interests 4 639 4 495 3
425 248 469 486 (9)
Earnings per share (cents) 1 852.0 2 047.7 (10)
Diluted earnings per share (cents) 1 851.3 2 046.7 (10)
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - AUDITED
Year ended Year ended
30 June 2018 30 June 2017
R'000 (52 weeks) (52 weeks)
Profit for the year 425 248 469 486
Other comprehensive income reclassifiable to profit or loss:
Total movement in foreign currency translation reserve (FCTR) 6 317 (20 833)
Attributable to:
- Owners of the company 5 395 (18 974)
- Non-controlling interests 922 (1 859)
Total comprehensive income for the year 431 565 448 653
Total comprehensive income attributable to:
- Owners of the company 426 004 446 017
- Non-controlling interests 5 561 2 636
431 565 448 653
ADDITIONAL INFORMATION - AUDITED
Year ended Year ended
R'000 30 June 2018 30 June 2017
Net asset value per share (cents) 7 578 6 642
Net asset value per share (excluding treasury shares) 8 338 7 309
Ordinary shares ('000s):
- In issue 24 990 24 990
- Weighted-average 22 711 22 708
- Diluted weighted-average 22 720 22 719
Capital investment 243 999 193 271
Depreciation of property, plant and equipment 130 356 122 425
Amortisation of intangible assets 7 631 11 870
Capital commitments 231 083 303 380
Property operating lease commitments 1 780 204 1 656 394
Contingent liabilities 16 022 38 908
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION - AUDITED
R'000 30 June 2018 30 June 2017
ASSETS
Non-current assets 1 663 396 1 481 122
Property, plant and equipment 1 100 132 978 615
Intangible assets 433 467 397 015
Rent prepayments 85 707 80 328
Deferred income tax assets 44 090 25 164
Current assets 2 609 111 2 232 120
Assets held for sale 4 510 4 345
Inventories 1 512 823 1 289 491
Trade and other receivables 118 489 122 462
Prepayments 20 360 14 402
Cash and deposits 952 929 801 420
Total assets 4 272 507 3 713 242
EQUITY AND LIABILITIES
Shareholders' equity 1 921 484 1 682 976
Share capital and reserves 1 893 759 1 659 768
Non-controlling interests 27 725 23 208
Non-current liabilities 205 225 198 469
Finance lease obligation 115 1 052
Deferred operating lease liability 162 930 137 051
Deferred income tax liability 42 180 37 480
Contingent consideration - 22 886
Current liabilities 2 145 798 1 831 797
Trade and other liabilities 2 070 688 1 768 942
Finance lease obligation 936 1 191
Current income tax liabilities 74 174 61 664
Total equity and liabilities 4 272 507 3 713 242
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS - AUDITED
Year ended Year ended
R'000 30 June 2018 30 June 2017
Cash flows from operating activities
Cash generated from operations 781 720 651 625
Interest paid (3 143) (3 785)
Taxation paid (169 775) (197 336)
Net cash generated from operating activities 608 802 450 504
Cash flows from investing activities
Net investment in assets (241 231) (181 472)
Business combinations (72 573) (5 740)
Interest received 54 128 40 814
Net cash used in investing activities (259 676) (146 398)
Cash flows from financing activities
Shares purchased by Cashbuild Trusts or subsidiary
companies for share incentive schemes (605) (2 561)
Shares sold by Cashbuild Trusts 1 610 2 526
Finance lease payments (1 192) (1 110)
Dividends paid:
- Own equity (201 210) (234 023)
- Non-controlling interests (1 044) (1 376)
Net cash used in financing activities (202 441) (236 544)
Net increase in cash and cash equivalents 146 685 67 562
Cash and cash equivalents at beginning of year 801 420 749 239
Effect of exchange rate movements on cash and cash
equivalents 4 824 (15 381)
Cash and cash equivalents at end of year 952 929 801 420
SUMMARY CONSOLIDATED 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 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
Total comprehensive income for the year - - - - - 5 395 420 609 5 561 431 565
Shares purchased by The Cashbuild Operations
Management Member Trust - - (605) - - - - - (605)
Shares sold by The Cashbuild Operations Management
Member Trust - - 1 610 - - - - - 1 610
Dividends paid - - - - - - (201 210) (1 044) (202 254)
Recognition of share-based payments - - - - 8 192 - - - 8 192
Balance at 30 June 2018 250 (23) 4 905 (279 319) 65 509 (2 934) 2 105 371 27 725 1 921 484
SUMMARY CONSOLIDATED SEGMENTAL ANALYSIS - AUDITED
South Africa
Other members of Botswana, Malawi and
Group Cashbuild business P&L Hardware business common monetary area* Zambia
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
R'000 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Income statement
Revenue 10 207 603 9 729 640 8 043 743 7 787 042 1 136 436 960 454 606 644 595 995 420 780 386 149
Operating profit 543 326 619 997 478 813 535 787 21 458 32 378 36 269 38 378 6 786 13 454
Statement of financial position
Segment assets 4 272 507 3 713 242 2 764 523 2 407 381 715 887 540 125 527 675 496 554 264 422 269 182
Segment liabilities 2 351 023 2 030 266 1 392 935 1 509 869 631 880 249 770 171 816 173 217 154 392 97 410
Other segment items
Depreciation 130 356 122 425 107 108 107 428 8 388 2 823 7 496 6 038 7 364 6 136
Amortisation 7 631 11 870 7 377 11 622 - - 103 93 151 155
Capital investment 243 999 193 271 119 772 106 024 81 638 13 437 23 954 42 548 18 635 31 262
* Includes Namibia, Swaziland and Lesotho
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 27 August 2018.
2. Independent audit by the auditor. These summary consolidated annual financial statements for the year
ended 30 June 2018 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 (2018: 24 June (52 weeks); 2017: 25 June (52 weeks)).
4. Declaration of dividend. The board has declared a final dividend (No. 51), of 346 cents (June 2017: 390 cents)
per ordinary share out of income reserves to all shareholders of Cashbuild Limited. The dividend per share is
calculated based on 24 989 811 (June 2017: 24 989 811) shares in issue at date of dividend declaration. Net local
dividend amount is 276.8 cents per share for shareholders liable to pay Dividends Tax and 346 cents per share for
shareholders exempt from paying Dividends Tax. The total dividend for the year amounts to 842 cents (June 2017:
930 cents) a 9% decrease on the prior year. Local Dividends Tax is 20%.
Cashbuild Limited's tax reference number is 9575168712.
Date dividend declared: Monday, 27 August 2018
Last day to trade "CUM" the dividend: Tuesday, 18 September 2018
Date to commence trading "EX" the dividend: Wednesday, 19 September 2018
Record date: Friday, 21 September 2018
Date of payment: Tuesday, 25 September 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 September 2018 and
Friday, 21 September 2018, both dates inclusive.
5. 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 22 710 768 ordinary shares in issue at year end
(June 2017: 22 708 147 shares).
6. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings
per ordinary share are based on headline earnings of R424.1 million (June 2017: R464.4 million) and a weighted
average of 22 710 768 (June 2017: 22 708 147) shares and fully diluted of 22 719 842 (June 2017: 22 719 432) ordinary
shares in issue.
Reconciliation between net profit attributable to the equity holders of the company and headline earnings:
R'000 June 2018 June 2017 % change
Net profit attributable to the owners of the company 420 609 464 991 (10)
Profit on sale of assets after taxation 3 456 (558)
Headline earnings 424 065 464 433 (9)
Headline earnings per share (cents) 1 867.2 2 045.2 (9)
Diluted headline earnings per share (cents) 1 866.5 2 044.2 (9)
7. Acquisition of business. In August 2017 the Group acquired the business of Build it Hunters Retreat and in September
2017 acquired Buffalo Building Supplies for a combined consideration of R72.6 million with the intention that the
businesses trade as P&L Hardware stores. These acquisitions are in line with Cashbuild's strategy for growing the
P&L Hardware brand. Property, plant and equipment of R18.3 million, trademarks of R2.2 million, inventories of
R17.2 million, trade and other receivables of R0.5 million, trade and other payables of R1.6 million, deferred tax of
R1.0 million and goodwill of R37.0 million has been recognised at date of acquisition. These values approximate
the fair values as determined under IFRS 3. The acquired businesses contributed revenue of R64.2 million and a
net loss of R4.6 million to the Group for the year. Had a full 52 weeks trading result been included in these Group
annual financial statements, the total revenue contributed would have been R75.8 million and the net loss would
have been R2.4 million excluding non-recurring costs incurred during the take-on and business integration phase.
On behalf of the board
Stefan Fourie Werner de Jager
Chairman Chief Executive
Johannesburg
27 August 2018
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 (318 at the end of this financial year
which includes the seven DIY stores and 60 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 5%. Revenue for stores in existence prior to July 2016 (pre-existing stores - 276 stores)
remained at similar levels while our 42 new stores provided the 5% increase. Gross profit increased by 4% with gross
profit percentage decreasing from 25.5% to 25.2%. This was achieved in tough trading conditions with selling price
inflation of 2%.
Operating expenses, including new stores, remained well controlled and increased by only 9% (existing stores 3%
and new stores 6%). Notwithstanding this, the increase in revenue did not compensate for the increased expenses,
resulting in operating profit decreasing by 12%. Basic earnings per share decreased by 10% with headline earnings
per share also decreasing by 9% from the prior year. The effective tax rate of 28.4% for the period is similar to that of
the previous period.
Cash and cash equivalents increased by 19% to R953 million. Stock levels, including new stores, have increased by
17% with overall stockholding at 88 days (2017: 85 days) at year end. Net asset value per share has increased by 14%,
from 6 642 cents (June 2017) to 7 578 cents.
During the year, Cashbuild opened 25 new stores (11 Cashbuild stores, six P&L Hardware stores and acquired eight
stores which were converted to P&L Hardware stores), refurbished 27 stores and relocated six Cashbuild stores.
Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying
the same rigorous process as in the past.
Prospects
Group revenue for the six weeks after year end has increased by 1% 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.
Directors:
IS Fourie* (Chairman), WF de Jager (Chief Executive), A Hattingh, HH Hickey*, AGW Knock (British)*, Dr DSS Lushaba*,
GM Tapon Njamo*, AE Prowse, NV Simamane*, SA Thoresson, WP van Aswegen (*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 BEST VALUE
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