Wrap Text
Fourth quarter operational update and trading statement – FY 2020
CASHBUILD LIMITED
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE share code: CSB ISIN: ZAE000028320
(“Cashbuild” or “the Group”)
FOURTH QUARTER OPERATIONAL UPDATE AND TRADING STATEMENT – FY 2020
Operational update
Cashbuild herewith provides its voluntary quarterly operational update.
Revenue for the fourth quarter for the Cashbuild Group was impacted by Covid-19 lockdown in several of the
countries we trade in. Please see “Impact of Covid-19 pandemic” note at the end of this operational update
for more detail on its impact on the Group’s revenue during the 4th quarter.
Revenue for the fourth quarter (FY 2020, 13 weeks vs FY2019, 14 weeks) for the Cashbuild Group decreased
by 23% when compared to the fourth quarter of the prior financial year while revenue for the financial year
(FY 2020, 52 weeks vs FY2019, 53 weeks) decreased by 7%. Transactions through the tills during the fourth
quarter for the Cashbuild Group decreased by 25% and decreased by 8% for the financial year.
The Cashbuild Group adopts the retail accounting calendar, which comprises the reporting period ending on
the last Sunday of the month (Year ended June 2020 – 52 weeks; Year ended June 2019 – 53 weeks). Although
the Group traded for 52 weeks in this financial year, it is appropriate and good practise to illustrate the
comparative 52 week trading. The information below highlights the comparable trading results (52 vs 52
weeks).
52 vs 52 trading weeks:
Revenue for the fourth quarter for the Cashbuild Group was down 17% on the fourth quarter of the prior
financial year, with the 22 new stores opened since 1 July 2018 contributing 3% growth, whilst the 296
existing stores reflected a decline of 20%. This, together with the growth reported in previous operational
updates, equates to a year to date decrease in revenue of 5%. Transactions through the tills during the fourth
quarter for the Cashbuild Group decreased by 18% to that of the comparative period, with new stores
contributing a growth of 3% and existing stores declining by 21%.
A revenue performance breakdown per operating segment is reflected in the table below and reflects a 52 vs 52
week performance unless otherwise stated.
Revenue performance 4th Quarter FY2020 versus 4th Quarter FY2019
Operating Segment Percentage Total New Existing
of Total % % %
Revenue
Cashbuild South Africa Half Year 79 - 3 (3)
Q3 79 (1) 3 (4)
Q4 78 (18) 3 (21)
Full Year 78 (5) 3 (8)
Cashbuild Common Monetary Half Year 5 (4) - (4)
Areas
Q3 5 (2) - (2)
Q4 6 (4) - (4)
Full Year 6 (4) - (4)
Cashbuild Other * Half Year 4 2 2 -
Q3 5 11 3 8
Q4 5 (10) 3 (13)
Full Year 5 1 3 (2)
P&L Hardware South Africa Half Year 12 (6) 3 (9)
Q3 11 (8) 2 (10)
Q4 11 (23) 3 (26)
Full Year 11 (10) 3 (13)
Total Group Half Year 100 (1) 3 (4)
Q3 100 (1) 3 (4)
Q4 100 (17) 3 (20)
Full Year 100 (5) 3 (8)
Q4 (14 Weeks 100 (23) 3 (26)
FY19)
Full Year (53 100 (7) 3 (9)
Weeks FY19)
*Botswana, Malawi and Zambia
Selling inflation was 2% at the end of June 2020 when compared to June 2019. Gross profit margin was
marginally lower than those reported for the prior financial year.
During the fourth quarter the Group opened one Cashbuild store and closed one Cashbuild store at the
expiration of its lease agreement. The Group also refurbished four Cashbuild stores, bringing the total number
of stores trading at the end of the quarter to 318. A store breakdown by segment is reflected in the table below:
Number of stores – end of quarter four Percentage Total New Existing
of total
Cashbuild South Africa 72 227 16 211
Cashbuild Common Monetary Areas 5 16 - 16
Cashbuild Other * 4 13 1 12
Cashbuild DIY Pilot stores - 1 - 1
P&L Hardware South Africa 19 61 5 56
Total Group 100 318 22 296
*Botswana, Malawi and Zambia
Impact of Covid-19 pandemic
As reported in the 3rd quarter operational update, retailing of building materials was not classified as essential
services. As a result, all Cashbuild and P&L Hardware stores as well as the Support Office, with the exception
of the six stores in Swaziland, the two stores in Malawi and the three stores in Zambia, were closed for the
period of the lockdown level 5. Upon publishing of the revised Regulations on 16 April 2020, Cashbuild stores
in South Africa were allowed to trade under strict guidelines and reduced trading hours from Saturday, 18
April 2020. With the announcement of the risk-adjusted strategy to ease the lockdown restrictions, the SA
stores were able to trade to all customers from lockdown level 4 on 1 May 2020.
Cashbuild supports the measures the South African Government and Governments of the other countries in
which it trades have outlined to contain the spread of the Covid-19 virus and complies with the required
regulations in regard to protection of staff and customers at its stores and support office.
In addition, Cashbuild has concluded negotiations with its landlords regarding rental reductions during the
initial lockdown period, generally in line with the proposals outlined by the Property Industry Group (the relief
package was revealed by a newly-formed alliance of retail property landlords in the country, known as the
Property Industry Group). The Group has experienced incidents of late or short deliveries from suppliers
without material impact on sales due to the adequate level of stockholding at our stores. Cashbuild also has
appropriate response mechanisms in place to deal with any positive Covid-19 cases reported at its stores,
resulting in deep cleaning and self-isolation of staff while the stores continue trading utilising staff from
nearby stores or towns.
The table below illustrates the Group revenue per month (comparable weeks) for the 4th quarter as impacted
by the various levels of lockdown, compared to the same period in the prior year.
Cashbuild Group Weeks 40 to Weeks 44 to Weeks 49 to
43 (April) 48 (May) 52 (June)
4th Quarter revenue (decline) / growth per month FY2020
versus per month FY2019 (87%) 12% 13%
Trading statement
In terms of the JSE Limited Listings Requirements, companies are required to publish a trading statement as
soon as they are reasonably certain that the financial results for the current reporting period will be more than
20% different than those of the prior comparative period.
Cashbuild expects earnings per share ("EPS") and headline earnings per share ("HEPS") for the year ended 30
June 2020 to decrease by more than 20% compared to EPS of 1 722 cents per share and HEPS of 1 751 cents
per share achieved for the prior comparative 52 week period. These movements are after taking into account
the implementation of IFRS 16 Leases which resulted in the depreciation of right of use assets and interest
costs on the lease liabilities raised and the effects of Covid-19 lockdown during April 2020.
Cashbuild will provide further guidance once reasonable certainty has been established on the range of the
decrease, in compliance with the JSE Listings Requirements.
Shareholders are advised that the financial information on which this trading statement and operational update
is based has not been reviewed or reported on by the Group's auditors. Cashbuild's audited results for the year
ended 30 June 2020 are expected to be released on SENS on or about Tuesday, 1 September 2020.
4 August 2020
Sponsor
Nedbank CIB
Date: 04-08-2020 09:00:00
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