Wrap Text
Audited interim results and dividend declaration for the six months ended 31 December 2018
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
for the six months ended 31 December 2018
CELEBRATING
40 YEARS
REVENUE(Rm)
Increased 3%
OPERATING PROFIT (Rm)
Decreased 12%
HEADLINE EARNINGS (Rm)
Decreased 11%
NAV PER SHARE (cents)
Increased 12%
DIVIDEND (cents)
Decreased 12%
SPACE GROWTH (stores)
Increased 1 %
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 (320 at the end of this
financial period which includes the four DIY stores and 62 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 audited results in accordance with International
Financial Reporting Standards ("IFRS").
Financial highlights
Revenue for the period increased by 3%. Revenue for stores in existence
prior to July 2017 (pre-existing stores - 287 stores) remained the same while
our 33 new stores since July 2017 provided the 3% increase. Selling price
inflation was 3%. Gross profit increased by 3% in tough trading conditions
with gross profit percentages decreasing from 25.2% to 25.1%.
Operating expenses, including new stores, continue to be well controlled and
increased by only 7% (existing stores 3%). Notwithstanding this, the increase
in revenue did not compensate for the increased expenses, resulting in the
operating profit decreasing by 12%. Earnings per share decreased by 12%
and headline earnings per share decreased by 11%.
The effective tax rate of 29.7% is higher than the previous period of 28.9% due
to a decrease in exempt income and an increase in disallowable charges
relating to share-based payments.
Cash and cash equivalents increased by 3% to R1,067 million. Stock levels,
including new stores, have increased by 12% with overall stockholding at
85 days (December 2017: 79 days) at period end. Net asset value per share
has shown a 12% increase, from 7 278 cents (December 2017) to 8 167 cents.
During the first half, Cashbuild Group opened eight new stores, refurbished
15 stores, relocated three stores and closed six (three Cashbuild and three
Cashbuild DIY 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 subsequent six weeks after half year end has
decreased by 1% on the comparable six week period. Management believe
trading conditions will remain extremely challenging. This information has
not been reviewed nor audited by the company's auditor.
SUMMARY CONSOLIDATED INTERIM INCOME STATEMENT - AUDITED
*Restated
Six months Six months *Restated
ended ended Year ended
31 December 31 December 30 June
2018 2017 % 2018
R'000 (26 weeks) (26 weeks) change (52 weeks)
Revenue 5 563 231 5 392 841 3 10 206 730
Cost of sales (4 168 975) (4 036 466) 3 (7 638 277)
Gross profit 1 394 256 1 356 375 3 2 568 453
Selling and marketing expenses (968 961) (894 962) 8 (1 778 355)
Administrative expenses (137 343) (147 522) (7) (267 566)
Other operating expenses (9 808) (1 428) >100 (10 263)
Other income 6 725 9 578 (30) 30 926
Operating profit 284 869 322 041 (12) 543 195
Finance cost (2 966) (1 024) >100 (3 143)
Finance income 30 717 27 975 10 54 128
Profit before income tax 312 620 348 992 (10) 594 180
Income tax expense (92 868) (100 723) (8) (169 027)
Profit for the period 219 752 248 269 (11) 425 153
Profit attributable to:
- Owners of the company 217 196 245 972 (12) 420 514
- Non-controlling interests 2 556 2 297 11 4 639
219 752 248 269 (11) 425 153
Earnings per share (cents) 956.2 1 083.1 (12) 1 851.6
Diluted earnings per share (cents) 955.8 1 082.5 (12) 1 850.9
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made.
Refer to note 1.
SUMMARY CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME - AUDITED
*Restated
Six months Six months *Restated
ended ended Year ended
31 December 31 December 30 June
2018 2017 2018
R'000 (26 weeks) (26 weeks) (52 weeks)
Profit for the period 219 752 248 269 425 153
Other comprehensive income:
Total movement in foreign currency translation reserve
(FCTR) 8 148 2 822 6 317
Attributable to:
- Owners of the company 7 161 2 773 5 395
- Non-controlling interests 987 49 922
Total comprehensive income for the period 227 900 251 091 431 470
Total comprehensive income attributable to:
- Owners of the company 224 357 248 745 425 909
- Non-controlling interests 3 543 2 346 5 561
227 900 251 091 431 470
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made.
Refer to note 1.
SUMMARY CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION - AUDITED
*Restated *Restated
31 December 31 December 30 June
R'000 2018 2017 2018
ASSETS
Non-current assets 1 684 111 1 614 077 1 665 001
Property, plant and equipment 1 128 254 1 052 109 1 100 132
Intangible assets 428 842 433 017 433 467
Rent prepayments 68 524 90 095 85 707
Deferred income tax assets 58 491 38 856 45 695
Current assets 3 129 527 2 873 970 2 634 996
Assets held for sale 25 206 4 477 4 510
Inventories 1 841 293 1 653 099 1 538 708
Trade and other receivables 164 246 138 294 118 489
Prepayments 32 064 39 019 20 360
Cash and deposits 1 066 718 1 039 081 952 929
Total assets 4 813 638 4 488 047 4 299 997
EQUITY AND LIABILITIES
Shareholders' equity 2 071 143 1 843 764 1 917 319
Share capital and reserves 2 041 023 1 818 775 1 889 594
Non-controlling interests 30 120 24 989 27 725
Non-current liabilities 215 904 203 559 205 225
Finance lease obligation - 516 115
Deferred operating lease liability 174 369 150 534 162 930
Deferred income tax liability 40 089 39 331 42 180
Contingent consideration 1 446 13 178 -
Current liabilities 2 526 591 2 440 724 2 177 453
Trade and other liabilities 2 445 748 2 350 582 2 102 343
Finance lease obligation 516 1 127 936
Current income tax liabilities 80 327 89 015 74 174
Total equity and liabilities 4 813 638 4 488 047 4 299 997
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made.
Refer to note 1.
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS - AUDITED
*Restated
Six months Six months *Restated
ended ended Year ended
31 December 31 December 30 June
R'000 2018 2017 2018
Cash flows from operating activities
Cash generated from operations 384 944 577 478 781 720
Interest paid (2 966) (1 024) (3 143)
Interest received - non-investing 334 370 389
Taxation paid (101 602) (82 642) (169 702)
Net cash generated from operating activities 280 710 494 182 609 264
Cash flows from investing activities
Net investment in assets (119 611) (121 031) (241 231)
Business combinations - (72 597) (72 573)
Interest received 30 383 27 605 53 739
Net cash used in investing activities (89 228) (166 023) (260 065)
Cash flows from financing activities
Shares purchased by Cashbuild Trusts or subsidiary
companies for share incentive schemes - - (605)
Shares sold by The Cashbuild Share Incentive Trust - - 1 610
Finance lease payments (535) (600) (1 192)
Dividends paid:
- Own equity (79 079) (89 224) (201 210)
- Non-controlling interests (1 148) (565) (1 044)
Net cash used in financing activities (80 762) (90 389) (202 441)
Net increase in cash and cash equivalents 110 720 237 770 146 685
Cash and cash equivalents at beginning of period 952 929 801 420 801 420
Effect of exchange rate movements on cash and cash
equivalents 3 069 (109) 4 824
Cash and cash equivalents at end of period 1 066 718 1 039 081 952 929
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made.
Refer to note 1.
SUMMARY CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY - AUDITED
Attributable to owners of the company
Share-based
payments Retained Non- controlling
R'000 Share capital Share premium reserve FCTR earnings interests Total equity
Balance at 30 June 2017 227 (275 419) 57 317 (8 329) 1 881 901 23 208 1 678 905
Total comprehensive income for the period (*Restated) - - - 2 773 245 972 2 346 251 091
Dividends paid - - - - (89 223) (565) (89 788)
Recognition of share-based payments - - 3 556 - - - 3 556
Balance at 31 December 2017 227 (275 419) 60 873 (5 556) 2 038 650 24 989 1 843 764
Total comprehensive income for the period - - - 2 622 174 542 3 215 180 379
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 - - - - (111 986) (479) (112 465)
Recognition of share-based payments - - 4 636 - - - 4 636
Balance at 30 June 2018 227 (274 414) 65 509 (2 934) 2 101 206 27 725 1 917 319
Total comprehensive income for the period - - - 7 161 217 196 3 543 227 900
Dividends paid - - - - (79 079) (1 148) (80 227)
Recognition of share-based payments - - 6 151 - - - 6 151
Balance at 31 December 2018 227 (274 414) 71 660 4 227 2 239 323 30 120 2 071 143
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made. Refer to note 1.
ADDITIONAL INFORMATION - AUDITED
*Restated
Six months Six months *Restated
ended ended Year ended
31 December 31 December 30 June
R'000 2018 2017 2018
Net asset value per share (cents) 8 167 7 278 7 561
Net asset value per share (excluding treasury shares) 8 986 8 009 8 320
Ordinary shares ('000s):
- In issue 24 990 24 990 24 990
- Weighted-average 22 714 22 710 22 711
- Diluted weighted-average 22 723 22 722 22 720
Capital investment 124 491 186 982 243 999
Depreciation of property, plant and equipment 66 286 63 974 130 356
Amortisation of intangible assets 3 399 4 256 7 631
Capital commitments 221 672 259 668 231 083
Property operating lease commitments 1 998 506 1 905 706 1 948 239
Contingent liabilities 14 618 29 049 16 022
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made.
Refer to note 1.
SUMMARY CONSOLIDATED INTERIM SEGMENTAL ANALYSIS - AUDITED
South Africa
Other members of common
Group Cashbuild business P&L Hardware business monetary area** Botswana, Malawi and Zambia
Year Year Year Year Year
Six months ended ended Six months ended ended Six months ended ended Six months ended ended Six months ended ended
31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June
*Restated *Restated *Restated *Restated *Restated *Restated *Restated *Restated *Restated *Restated
R'000 2018 2017 2018 2018 2017 2018 2018 2017 2018 2018 2017 2018 2018 2017 2018
Income statement
Revenue 5 563 231 5 392 841 10 206 730 4 338 290 4 261 486 8 043 313 670 900 582 496 1 136 053 313 914 320 760 606 637 240 127 228 099 420 727
Operating profit 284 869 322 041 543 195 248 114 277 547 478 776 16 535 17 771 21 388 15 456 22 179 36 266 4 764 4 544 6 765
Statement of financial
position
Segment assets 4 813 638 4 488 047 4 299 997 3 095 260 2 951 771 2 787 079 854 664 722 958 719 003 559 784 541 538 528 377 303 930 271 780 265 538
Segment liabilities 2 742 495 2 644 283 2 382 678 1 998 559 1 828 618 1 418 988 371 341 447 624 635 375 190 365 199 380 172 615 182 230 168 661 155 700
Other segment items
Number of stores 320 317 318 225 226 225 62 58 60 18 18 18 15 15 15
Depreciation 66 286 63 974 130 356 52 020 53 590 107 108 6 037 3 350 8 388 4 093 3 477 7 496 4 136 3 557 7 364
Amortisation 3 399 4 256 7 631 3 271 4 126 7 377 - - - 47 52 103 81 78 151
Capital investment 124 491 186 982 243 999 109 797 92 065 119 772 9 182 72 665 81 638 4 254 13 592 23 954 1 258 8 660 18 635
* Certain comparative amounts shown do not correspond to the prior period financial statements and reflect adjustments made. Refer to note 1.
** Includes Namibia, Swaziland and Lesotho.
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. There are three significant
new accounting standards which will impact the Group's reporting. The group
has adopted the following standards that are effective for reporting periods
commencing on or after 1 July 2018:
- IFRS 15 Revenue from Contracts with Customers
- IFRS 9 Financial Instruments
IFRS 15 - Revenue from Contracts with Customers replaces IAS 18 - Revenue,
and provides a single comprehensive model for revenue recognition based
on the satisfaction of performance obligations and additional disclosures in
respect of revenue. The adoption relates to the expected sale returns and
the impact has been applied to the comparative figures to create a fair
presentation for each period.
IFRS 9 - Financial Instruments replaces IAS 39 Financial Instruments.
The adjustments have taken into account the impairment allowance of
receivables which were estimated on the incurred loss model and now
estimated on an expected credit loss model. No restatement has been done
for prior periods as there is no material impact.
The following table summarises the impact of the adoption of IFRS 15 on the
results of the comparative reporting periods:
Previously Adjustment
reported IFRS 15 Restated
IFRS 15 R'000 R'000 R'000
December 2017
Non-current assets
Deferred tax assets 36 494 2 362 38 856
Current assets
Inventories 1 618 671 34 428 1 653 099
Current liabilities
Trade and other payables 2 307 658 42 924 2 350 582
Retained earnings 2 044 784 (6 134) 2 038 650
June 2018
Non-current assets
Deferred tax assets 44 090 1 605 45 695
Current assets
Inventories 1 512 823 25 885 1 538 708
Current liabilities
Trade and other payables 2 070 688 31 655 2 102 343
Retained earnings 2 105 371 (4 165) 2 101 206
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
25 February 2019.
2. Independent audit by the auditor. These summary financial statements were
derived from the consolidated interim financial statements for the six months
ended 31 December 2018. The consolidated interim financial statements have
been audited by PricewaterhouseCoopers Inc. who expressed an unmodified
opinion thereon. 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:
23 December (26 weeks); 2017: 24 December (26 weeks); June 2018: 25 June
(52 weeks)). The Group closed on the second last Sunday for the period ending
December 2018. This was done to ensure a comparable 26 weeks year on year.
4. Declaration of dividend. The board has declared an interim dividend (No. 52),
of 435 cents (2017: 496 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 (2017: 24 989 811) shares in issue at date of dividend declaration.
Net local dividend amount is 348 cents per share for shareholders liable to pay
Dividends Tax and 435 cents per share for shareholders exempt from paying
Dividends Tax. Local dividend tax is 20%.
Cashbuild Limited's tax reference number is 9575168712.
Date dividend declared: Monday, 25 February 2019
Last day to trade "CUM" the dividend: Monday, 18 March 2019
Date to commence trading "EX" the dividend: Tuesday, 19 March 2019
Record date: Thursday, 22 March 2019
Date of payment: Tuesday, 25 March 2019
Share certificates may not be dematerialised or rematerialised between
Tuesday, 19 March 2019 and Thursday, 22 March 2019, both dates inclusive.
5. 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 22 714 257 ordinary shares in issue at period end (2017:
22 709 554 shares; June 2018: 22 710 768).
6. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline
earnings of R221 million (2017: R247 million; June 2018: R423 million) and a
weighted-average of 22 714 257 (2017: 22 709 554 shares; June 2018: 22 710 768)
shares and fully diluted of 22 723 330 (2017: 22 721 970; June 2018: 22 719 842)
ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the
company and headline earnings:
Six months Six months Year
ended ended ended
December December % June
R'000 2018 2017 change 2018
Net profit attributable
to the owners of the
company 217 196 245 972 (12) 420 514
Loss/(profit) on sale of
assets after taxation 2 034 1 306 >100 3 457
Impairment on intangible
assets 1 620 - >100 -
Headline earnings 220 850 247 278 (11) 423 971
Headline earnings per
share (cents) 972.3 1 088.9 (11) 1 866.8
Diluted headline
earnings per share
(cents) 971.9 1 088.3 (11) 1 866.1
On behalf of the board
Stefan Fourie Werner de Jager
Chairman Chief Executive
Johannesburg
Directors: IS Fourie* (Chairman), AGW Knock (British)*, Dr DSS Lushaba*, NV Simamane*, HH Hickey*, GM Tapon Njamo*, WF de Jager (Chief Executive), AE Prowse, SA Thoresson, A Hattingh, WP van Aswegen (*Non-executive)
Company Secretary: T Nengovhela
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
26 February 2019
Date: 26/02/2019 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
