Cashbuild Limited Reports Mixed Financial Results for Interim Period

Published by
Lethabo Ntsoane

Cashbuild Limited announced its interim financial results for the six months ended 24 December 2023. While the company reported a 2% increase in revenue, reaching R5.789 billion, the period also saw significant declines in operating profit and earnings per share.

Financial Performance Overview

Financial MetricSix months ended 24 December 2023Six months ended 25 December 2022Change
RevenueR5.789 billionR5.649 billion+2%
Gross profitR1.431 billionR1.431 billionNo change
Operating profitR50 millionR262 million-81%
Basic earnings per share (cents)14.0652.8-98%
Headline earnings per share (cents)551.8693.5-20%
Net asset value (NAV) per share (cents)7 7579 266-16%
Dividend per share (cents)325400-19%

The 2% increase in revenue was driven by a combination of growth from existing stores and contributions from new stores. However, the company’s gross profit margin decreased slightly from 25.3% to 24.7%. Operating expenses rose by 7%, primarily due to increased costs associated with existing stores. Operating profit saw a significant decline of 81%, mainly attributed to the impairment of P&L Hardware Goodwill.

Store Operations and Expansion Strategy

During the interim period, Cashbuild opened three new stores and refurbished three existing stores as part of its ongoing expansion and refurbishment strategy. The company aims to continue this approach in a controlled manner, considering the evolving feasibility process.

Outlook and Dividend Declaration

Management anticipates continued challenging trading conditions in the foreseeable future. Despite revenue growth, declines in operating profit and earnings per share signal the need for cautious optimism.

The Board of Cashbuild declared an interim dividend of 325 cents per ordinary share, down from 400 cents in the prior period. Shareholders will receive the dividend out of income reserves, with the payment scheduled for Monday, 25 March 2024.

Conclusion

Cashbuild Limited’s interim financial results reflect a mixed performance, with revenue growth offset by declines in profit and earnings. The company remains committed to its store expansion and refurbishment strategy but acknowledges the ongoing challenges in the operating environment. Shareholders can expect a reduced dividend compared to the previous period, reflecting the company’s prudent approach amidst uncertain market conditions.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo