| Wed 22 Aug 2001, 0:00 | | Cashbuild - Audited Results |
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CASHBUILD LIMITED
Registration number 1986/001503/06
(Incorporated in the Republic of South Africa)
("Cashbuild")
JSE Sharecode CSB
ISIN Number ZAE000028320
RECORD RESULTS
"Cashbuild delivers sustainable results, has excellent balance sheet, cash
in the bank, and expanding.
During the past year Cashbuild has restored shareholder value to 364 cents
per share (June 2000: 315 cents)."
ANNUAL RESULTS FOR THE 53 WEEKS ENDED 30 JUNE 2001
CONDENSED GROUP INCOME STATEMENT
Audited Audited
53 weeks 52 weeks
ended ended
30 June 24 June
R'000 2001 2000
Revenue 982,544 955,576
Cost of sales 771,497 788,688
Gross profit 211,047 166,888
Administrative, marketing and
other expenses 185,520 165,885
Operating profit before
exceptional item 25,527 1,003
Exceptional item 5,126 -
Operating profit before
finance charges 20,401 1,003
Net financing (income)/charges (1,615) 601
Profit before taxation 22,016 402
Taxation 8,593 (67)
Profit after taxation 13,423 469
Minority interest 2,116 1,687
Profit/(loss) attributable
to shareholders 11,307 (1,218)
Headline adjusting items:
Loss on sale of assets after taxation 79 138
Exceptional item 5,126 -
Headline profit/(loss) 16,512 (1,080)
Earnings per share (cents)
Basic earnings 48.68 (5.25)
Headline earnings 71.09 (4.65)
Number of shares in issue (`000s) 23,225 23,225
CONDENSED GROUP BALANCE SHEET
Audited Audited
30 June 24 June
R'000 2001 2000
Assets
Non-current assets 58,698 64,774
Property, plant and equipment 52,416 50,157
Loans and unlisted investments 4,163 11,311
Deferred taxation 2,119 3,306
Current assets 265,450 242,375
Inventories 161,963 180,870
Trade and other receivables 39,994 44,021
Cash resources 63,493 17,484
Total assets 324,148 307,149
Equity and liabilities
91,143 77,576
Shareholders' funds 84,554 73,247
Minority interest 6,589 4,329
Non-current liabilities 1,578 3,586
Interest-bearing debt 214 2,746
Deferred taxation 1,364 840
Current liabilities 231,427 225,987
Short-term borrowings 65 359
Trade and other liabilities 231,362 225,628
Total liabilities 233,005 229,573
Total equity and liabilities 324,148 307,149
Capital expenditure 10,216 4,874
Depreciation 8,528 9,018
Net asset value per share (cents) 364 315
Capital commitments 579 501
Contingent liabilities 6,275 10,000
CONDENSED GROUP CASH FLOW STATEMENT
Audited Audited
53 weeks 52 weeks
ended ended
30 June 24 June
R'000 2001 2000
Cash inflows from operating activities 56,848 20,158
Cash outflows from investing
activities 8,013 8,449
Cash outflows from financing
activities 2,826 11,812
Net increase/(decrease)in cash and
cash equivalents 46,009 (103)
Cash and cash equivalents
at beginning of year 17,484 17,587
Cash and cash equivalents
at end of year 63,493 17,484
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Foreign
currency Distribut-
Share Share translation able
R'000 capital premium reserve reserve Total
Balance at
25 June 2000 232 38,052 2,730 32,233 73,247
Profit attributable
to shareholders 11,307 11,307
Balance at
30 June 2001 232 38,052 2,730 43,540 84,554
COMMENTS
Management is proud to announce a vast improvement in the profitability of
Cashbuild Limited for the 53-week trading period ended 30 June 2001.
Record earnings of 71.1 cents per share have been achieved, equating to 40%
compound growth over five years. This successful performance is attributed
to strong trading results and interest received on growing cash balances.
Direct comparison of results to last year is skewed due to the substantial
once off write-off related to inventory accounting during the previous
financial year. These accounting issues have now been rectified. It should
be noted that the record results achieved relate entirely to normal trading
for the year. In addition this year's results include a 53rd week, which has
contributed an additional 6 cents to headline earnings per share.
NATURE OF BUSINESS
Cashbuild is the largest retailer of building materials and associated
products, selling directly to cash paying customers via its chain of 98 (and
growing) branded stores throughout South Africa and neighbouring countries.
Stores carry a focused in-depth quality product range to meet the needs of
the local market for home builders, home improvers, contractors, farmers and
traders.
TRADING ENVIRONMENT
Cashbuild has continued to grow its business profitably despite difficult
trading conditions in the local building materials supply market. This has
been achieved with excellent operational management, supported by focused
micro product advertising and a knowledgeable procurement team whose
combined efforts have improved sales product mix by growing sales on higher
margin products.
At the interim stage, the company reported record results and now, six
months later continues to maintain this performance.
STORE ACTIVITY
With a solid balance sheet and an experienced, determined, focused
management team, Cashbuild has the ability, resources and drive to expand
its business from a successful base of stores.
Four additional stores have been opened, two in the first half of the
financial year, Nhlangano (Swaziland) & Hazyview (Mpumalanga), followed by
Montague Gardens (Cape Town) & Meadowlands (Soweto) during the second half.
Meadowlands is our first initiative into this major market.
Cashbuild management intends to grow profitable market share in line with
company policy and will acquire businesses or new sites which show the clear
potential to meet strict financial and operational criteria.
FINANCIAL HIGHLIGHTS
During the reporting period gross profit improved dramatically by 26.5% to
R211 million (2000: R167 million). Revenue increased 2.8% to R983 million. A
strategic decision to grow sales on higher margin products, plus the
continued successful drive to reduce shrinkage, achieved our stated
objective to improve overall gross profit. During the year shrinkage was
reduced by R4 million to 0.6% of sales. Better in-store ranging of products
and internal audit and security initiatives contributed to this performance.
The comparative gross margin includes the inventory write-off.
Operating profit excluding the exceptional item has made an immediate
turnaround increasing to a record R26 million.
Management focus on profit enhancement, which included improved financial
controls ensured the recovery in headline earnings to R16.5 million (2000:
R1 million loss).
The balance sheet has never been as strong, with negligible borrowings and
R63 million cash at year-end. The company has been trading cash positive
over the past 12 months, funding its own working capital.
EXCEPTIONAL ITEM
The exceptional item represents a provision raised against the loan granted
to the Cashbuild Share Incentive Trust. The impairment was calculated
conservatively against the underlying values in the Trust.
MANAGEMENT
Cashbuild has strengthened its financial management during the past 12
months with the appointment of Craig Daly as financial director in December
2000. He has restructured the financial department and strengthened the
entire financial team, and has implemented strict financial controls,
disciplines and monitoring throughout the business.
In improving corporate governance, a new non-executive director Francois
Rossouw has been appointed to the board and elected chairman of the audit
committee. A Chartered Accountant, with a background in retailing, Francois
will be a valuable asset to the team.
PROSPECTS
Cashbuild has delivered excellent results during the past year. These
results have set the foundation for management to continue growing
profitable market share by continuing to expand its store base against
strict financial and operational criteria. Management will continue to
grow sales on higher margin products, and gain profitable market share in
its volume products.
Furthermore during the last six months, Cashbuild has conducted in-depth
climate surveys and market research with its employees, customers and
suppliers. Feedback has confirmed Cashbuild's strengths and has also
identified opportunities that are being tackled enthusiastically which will
further enhance profitability.
DECLARATION OF DIVIDEND
The board has declared a dividend (No. 18), of 24 cents per ordinary share
(2000: nil) to all shareholders of Cashbuild Limited. To comply with the
procedures of STRATE, the following dates are applicable:
Date dividend declared 21 August 2001
Last day to trade "CUM" the dividend 7 September 2001
Date commence trading "EX" the dividend 10 September 2001
Record date 14 September 2001
Date of payment 17 September 2001
Certificated shareholders may not dematerialise their shares between Friday,
31 August 2001 and Friday, 14 September 2001, both dates inclusive.
FINANCIAL POLICY STATEMENTS
An unqualified audit report has been issued on the financial position of the
Group at 30 June 2001 and the results of its operations and cash flows for
the year then ended.
The financial statements are prepared in accordance with and comply with the
Statements of Generally Accepted Accounting Practice in South Africa.
The accounting policies of the Group are consistent in all material respects
with those applied in the previous year.
By order of the board
Donald Masson Pat Goldrick
Chairman Chief Executive
22 August 2001
Directors: D Masson* (Chairman), PK Goldrick (Chief Executive) (Irish), CT
Daly, CB Fourie, FM Rossouw*. *Non-Executive
Auditors: PricewaterhouseCoopers Inc.
Company Secretary: Alan C Smith.
Registered Office: Cnr Aerodrome and Aeroton Roads, Aeroton, Johannesburg.
PO Box 90115, Bertham 2013.
Transfer Sercretaries: Mercantile Registrars,11 Diagonal Street,
Johannesburg. PO Box 1053, Johannesburg 2000.
