Cashbuild continues to expand
Fin24.com - Sep 20th 2012, 13:00
Johannesburg - Cashbuild [JSE:CSB] will continue its intensive store expansion, relocation and refurbishment strategy in the new financial year despite tough trading conditions, it said on Tuesday.
Southern Africa's biggest building materials company made this disclosure as most companies were cutting back on their capital outlay due to uncertain global economic conditions.
Most companies are spending and expanding cautiously or have stopped doing so because they want to see what will eventually happen to the eurozone crisis, which many believe is an emerging recession.
Any kind of recession in the eurozone would have devastating implications on the global economy.
Cashbuild said in the year to June 2012 it had opened four new stores and refurbished 13 stores. Three stores were relocated.
"But this year's expansion will be in a controlled manner, applying the same rigorous process as in the past few years.
"We are expecting an increase in the number of new stores compared with the prior two years," CEO Werner de Jager said.
Cashbuild said the first nine trading weeks since financial year ended in June saw a 5% rise in revenue compared with the previous period. This was indicative of tough trading conditions.
The company said revenues for the year to June surged by 16% while basic earnings per share saw a 91% explosion. Headline earnings tumbled 88%.
Stores in existence since the beginning of July 2010 (pre-existing 182 stores) accounted for 10% of the revenue rise, with the remaining 1% increase due to the nine new stores the group has opened since July 2010.
But the share price on the JSE remained subdued, an indication that the market was really expecting the results. Cashbuild shares gained only 0.86% during intraday trading.
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