Cashbuild sees space for more stores

Werner de Jager.

Image source: BDlive

In the year to June, net income rose to R358.9m and revenue increased 13% to R7.7bn, underpinned by the group's 'ready for business' initiative, which included better customer service and well-stocked stores.

CEO Werner de Jager said that the Cashbuild consumer was in a healthier position than a year ago.

"Basket sizes and the number of transactions have grown. ... The threat that is hanging is what is happening in the mining sector - it's such a big employer of our customer base - we watch it with bated breath," he said.

Part of the sector's strong growth owes to the fact that unlike the grocery retail segment, which is a quite well penetrated and mature space to the extent that opening new stores is cannibalising existing stores - buildingware stores in SA are underpenetrated. Cashbuild trades out of 223 stores and De Jager "believes there is space to get to 300 stores".

Massmart's Massbuild division, which includes Builders Warehouse, was again the star performer over the company's half-year period. Last week the company said Massbuild had grown total sales by 16.3%. Comparable sales rose by 10.6%.

FNB property economist John Loos said rapid growth was unlikely to continue in this segment of the retail market, given its cyclical nature.