Cashbuild targets rural areas for expansion

CEO Pat Goldrick said yesterday, 15 September 2009, the group's focus on opening stores in rural areas was paying dividends because there was a need for building materials in those areas. He said the majority of the group's 183 stores were in rural areas because people there bought building materials as they received cash.

He said there was an opportunity for the group to open more stores in the neighbouring African countries to add to 30 stores in Botswana, Lesotho, Namibia and Swaziland.

“But the focus for us now is locally because there are more opportunities,” he said.

Cashbuild would continue its store expansion, relocation and refurbishment in a controlled manner, said Goldrick. It posted a 10% increase in operating profit to R251,3m for the year to June and declared a dividend of 246c.

Revenue rose 25% to R5,067bn from R4,043bn, while diluted earnings per share climbed 10% to 779.5c from 707.9c a year ago.

Net asset value per share jumped 24% from 1825c last year to 2265c. But cash and cash equivalents decreased 9% to R348m. The company said the decrease was as a result of an amount of R55m being paid to suppliers before the year-end cut off.

The reduction in the price of steel over several months resulted in the prices of steel-related products decreasing accordingly.

Goldrick said gross margins were expected to remain under pressure for the next quarter due to the anticipated increase in steel prices.

Source: Business Day

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