SIKI MGABADELI: Southern Africa’s largest retailer of building materials and associated products Cashbuild reported 14% growth in revenue to R4.5 billion and their operating profit improved by 32% to R331 million.
Etienne Prowse is financial director at Cashbuild and joins us now. Etienne, thanks for your time this evening. A solid performance during the period, even though everybody’s talking about an economic slowdown. So what do you attribute it to?
ETIENNE PROWSE: Good evening, Siki. Yes, we also agree they are great results brought about by growth in our turnover of 14%, our revenue contributed by our existing stores. We kept our margin at 23.7%. And then cost control pretty well under control this past six months, only growing by 6%, gives the result to the bottom line.
SIKI MGABADELI: Alright. I understand you also opened some new stores during the period. Those have been accounted for in these results that we are looking at now – or will they factor in in your next set of results?
ETIENNE PROWSE: We’ve opened up six new stores in this last six-month period and we expect another six for the latter half of this financial year. So that will be 12 in total. And also we relocated one store and refurbished another seven.
SIKI MGABADELI: You also during the time increased your cash on hand by 23%. So you’ve maintained your debt-free positon as well. Are you pursuing any acquisitions or are you happy with where things stand within the southern Africa region.
ETIENNE PROWSE: The cash is obviously inflated now because it’s just after peak trading. The R1.3 billion [?] 23% up on the prior year was just before paying our creditors about R670 million at the end of December. And as for acquisitions on February 3 we received conditional approval from the Competition Tribunal for the takeover of P&L Hardware, a total value of R350 million, so that’s where our cash will be going soon.
SIKI MGABADELI: And what are your plans for that business?
ETIENNE PROWSE: It’s a very good business model… and we’ll retain the model and we expect to expand that model throughout Africa and South Africa.
SIKI MGABADELI: And what are your expectations then for trading conditions for the remainder of the year, Etienne?
ETIENNE PROWSE: Well, we are positive. For the last six weeks since our year-end, we’ve been up 16%. Obviously with the run-up to elections there are unsettled relations in communities and so forth, so that brings a bit of risk with it. Other than that another risk would be employment from the mines looking at cutting their workforces. But other than that, we are positive for the rest of the year.