Cashbuild growth defies flagging mood

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Building confidence declined for the third straight quarter in the three months to September, with hardware retailers the most hit, an index compiled by the Bureau of Economic Research in conjunction with SA's secondlargest bank, FNB, showed.

Notwithstanding the depressed mood among building retailers, which have started to feel the pinch because of a weak consumer environment, Cashbuild grew revenue by 13% in its first quarter ended September.

Transactions rose 5%, driven mainly by strong sales from new stores, particularly the outlet in the Ekurhuleni township of Daveyton, Cashbuild CEO Werner de Jager said yesterday.

Cashbuild has opened 10 stores since July last year and one during the first quarter of this year, for a total of 223.

In contrast to the double-digit growth in its home market, sales at Cashbuild's rest-of-Africa operations fell in the first quarter, with the exception of Lesotho, which increased revenue by 11% during the period following last year's decline of 18%.

De Jager said trading in Namibia came off a high base in the year before, sales were boosted by payments to war veterans and cuts in personal income tax. "Malawi was the same story," he said, highlighting that softer revenue in the first quarter should be read in the context of the country having increased sales by 72% in the first quarter of last year. He pointed to Swaziland's struggling economy as a constraint on sales, but gave no reason for the soft performance from Botswana.

Cashbuild's rest-of-Africa operations generate just over 10% of the group's revenue, with SA accounting for the balance.