| Wed 13 Feb 2002, 0:00 | | Cashbuild Limited - Audited Interim Results For Th |
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December 2001
Cashbuild Limited
(Registration Number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
("Cashbuild" or "the company")
JSE Sharecode: CSB ISIN code: ZAE000028320
AUDITED INTERIM RESULTS FOR THE 26 WEEKS ENDED
29 DECEMBER 2001
22% increase in headline earnings
32% increase in profit before tax and exceptional item
39% improvement in cash resources
Cashbuild opens 100th store
Rated 4th in Business Times Top 100 companies
CONDENSED GROUP INCOME STATEMENT
Audited Audited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
29 Dec 23 Dec % 30 Jun
R'000 2001 2000 Change 2001
Revenue 539,831 546,978 (1) 982,544
Cost of sales 418,374 438,512 (5) 771,497
Gross profit 121,457 108,466 12 211,047
Administrative, marketing
and other expenses 106,895 96,544 11 186,174
Operating profit before
exceptional item 14,562 11,922 22 24,873
Exceptional item - 5,126 5,126
Operating profit before
finance income 14,562 6,796 114 19,747
Net financing income 1,635 375 336 1,615
Profit before taxation 16,197 7,171 126 21,362
Taxation 6,475 4,043 60 8,494
Profit after taxation 9,722 3,128 211 12,868
Minority interest 1,106 1,286 (14) 2,108
Attributable earnings 8,616 1,842 368 10,760
Headline adjusting items:
(Profit)/loss on sale of
assets after taxation (3) 100 79
Exceptional item - 5,126 5,126
Headline earnings 8,613 7,068 22 15,965
Earnings per share (cents)
Basic earnings 37.2 7.9 371 46.3
Headline earnings 37.2 30.4 22 68.7
Dividend per share
(cents)(Note 5) 24.0 - -
Weighted number of shares
in issue(`000s) 23,178 23,225 23,225
CONDENSED GROUP BALANCE SHEET
Audited Audited Audited
29 Dec 23 Dec 30 Jun
R'000 2001 2000 2001
Assets
Non-current assets 54,607 51,519 53,736
Property, plant and equipment 51,173 44,037 47,358
Loans and unlisted investments 2,866 3,428 4,163
Deferred taxation 568 4,054 2,215
Current assets 345,247 284,357 265,450
Inventories 199,443 168,270 161,963
Trade and other receivables 29,712 32,325 39,994
Cash resources 116,092 83,762 63,493
Total assets 399,854 335,876 319,186
Equity and liabilities
88,325 77,689 87,216
Shareholders' funds 81,860 72,031 80,737
Minority interest 6,465 5,658 6,479
Non-current liabilities 439 727 543
Interest-bearing debt 165 259 214
Deferred taxation 274 468 329
Current liabilities 311,090 257,460 231,427
Short-term borrowings 66 2,867 65
Trade and other liabilities 311,024 254,593 231,362
Total liabilities 311,529 258,187 231,970
Total equity and liabilities 399,854 335,876 319,186
Capital expenditure 8,128 2,480 10,216
Depreciation 4,313 4,581 9,058
Net asset value per share (cents) 360 310 348
Capital commitments 2,184 75 579
Contingent liabilities 4.864 60 6,275
CONDENSED GROUP CASH FLOW STATEMENT
Audited Audited Audited
26 weeks 26 weeks 53 weeks
ended ended ended
29 Dec 23 Dec 30 Jun
R'000 2001 2000 2001
Cash inflows from operating
activities 61,393 66,115 56,848
Cash (outflows)/inflows from
investing activities (8,746) 364 (8,013)
Cash (outflows) from financing
activities (48) (201) (2,826)
Net increase in cash and
cash equivalents 52,599 66,278 46,009
Cash and cash equivalents
at beginning of period 63,493 17,484 17,484
Cash and cash equivalents
at end of period 116,092 83,762 63,493
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Foreign currency
Share Share translation Distributable
R'000 capital premium reserve reserve Total
Opening balance
at 25 June 2000 232 38,052 2,730 32,233 73,247
Effects of changes
in accounting policy (3,270) (3,270)
Restated balance
at 25 June 2000 232 38,052 2,730 28,963 69,977
Attributable earnings
for the year 11,307 11,307
Effects of changes
in accounting policy (547) (547)
Restated balance at
1 July 2001 232 38,052 2,730 39,723 80,737
Attributable earnings
for the period 8,616 8,616
Dividend paid (5,574) (5,574)
Costs of shares
purchased (5) (1,914) (1,919)
Closing balance
at 29 Dec 2001 227 36,138 2,730 42,765 81,860
NOTES TO THE CONDENSED GROUP INTERIM FINANCIAL STATEMENTS
1.Accounting policies.
These condensed group interim financial statements are prepared in
accordance with Statements of Generally Accepted Accounting Practice in
South Africa. The accounting policies used in the preparation of the interim
financial statements are consistent with those used in the annual financial
statements for the year ended 30 June 2001, except that Statement AC 135 in
respect of investment property has been adopted. This policy change has been
affected by a restatement of prior year numbers as follows:
Dec Dec Jun
R'000 2001 2000 2001
Decrease in opening distributable
reserves 3,817 3,270 3,270
Decrease in attributable earnings 244 304 547
Decrease in closing distributable
reserves 4,061 3,574 3,817
The interim financial statements should be read in conjunction with the
annual financial statements at 30 June 2001.
2. Audited results
The interim financial results, and the comparative figures for December 2000
have been audited.
The unqualified audit report is available at the registered office of the
company.
3. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to shareholders by the weighted average number of 23 178 395 ordinary shares
in issue during the period
(2000: 23 224 812 shares; 2001 financial year: 23 224 812 shares).
To calculate the headline earnings per share, the earnings attributable to
shareholders is adjusted for the (profit)/loss on sale of assets and the
exceptional item.
4. Shares purchased by subsidiary
The company has purchased 499 296 ordinary shares of Cashbuild Limited
through its subsidiary Cashbuild SA (Pty) Limited. The company does not
intend cancelling these shares and will place the shares in the market at an
opportune date.
5. Dividend
A dividend of 24 cents per share was declared on 21 August 2001 and paid on
17 September 2001. In line with the company's dividend policy no interim
dividend has been declared.
COMMENTS
"Six months ago, Cashbuild reported record annual results. Now with a
further six months trading behind us, we have once again exceeded market
expectations with a 22% growth in headline earnings."
- Pat Goldrick, Chief Executive
NATURE OF BUSINESS
Cashbuild is the largest retailer of building materials and associated
products, selling directly to a cash paying customer base via its chain of
101 (and expanding) branded stores throughout southern Africa. 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.
STORE ACTIVITY
Since year end, Cashbuild has added four new stores to its retail chain.
Recent store introductions include Louis Trichardt, Sibayeni (Naas,
Mpumalanga), Gaborone, and Edenvale. The latter represents the first venture
into a truly urban market, offering a practical shopping environment and a
broader product selection, to meet the needs of customers.
Cashbuild has invested over 1,5 million Pula in establishing a second store
in Gaborone (Botswana), situated in the heart of the building and
construction node, and occupying some 2000 square meters. Supported by
Botswana's high economic growth, this store is expected to deliver
exceptional returns.
All four new stores are meeting or beating expectations.
FINANCIAL HIGHLIGHTS
Whilst revenue remained static, profit before taxation and exceptional item
improved by 32%, up from R12,3 million to R16,2 million. The 5% reduction in
the cost of sales is as a result of continued emphasis on stock management,
rooting out shrinkage, obsolescence and unwarranted markdowns. Improved
purchasing strategies, stocking a higher margin product mix, as well as
matching product ranges to community needs have enhanced sales margins.
Improved profitability resulted from the adherence to proven business
strategies, from being the cheapest in the community in which we trade, to
always being in stock, and to offer a dependable customer delivery service
in all stores.
The implementation of these strategies has had an influence on advertising,
sales, and stock levels. During the first quarter, management decided to
pull back advertising until these strategies were fully implemented at all
stores. The result was that some turnover growth was sacrificed. On the
reinstatement of advertising, an improvement in turnover was immediately
evident and continues to gain momentum.
Headline earnings per share improved by 22%, up from 30,4 cents to 37,2
cents.
Cashbuild has funded its expansion from internal resources, and closed the
half-year with R116 million in the bank (2000:R84 million).
The net asset value is now 360 cents per share (year end 2001:348 cents).
MANAGEMENT
As we strive for excellence and smarter ways to run our business, Cashbuild
will continue to invest in information technology and its people, holding
them accountable for their areas of responsibility. The financial and
procurement teams have been strengthened further, resulting in improved
financial reporting and controls, inventory management, and ranging.
PROSPECTS
The company will continue to fund its expansion programme from internal
resources and intends opening up to 10 new stores per annum in line with
strict financial and operational criteria.
In December, the company embarked on a refurbishment programme to upgrade
each store every five years. A project manager has been appointed to ensure
business continuity. The first store to benefit will be Manzini (Swaziland).
Building on past successes, Cashbuild is growing its market share in
supplying building materials to large construction companies and government
related infrastructural developments.
DIVIDEND
In line with the company's dividend policy, no interim dividend has been
declared.
On behalf of the Board
Donald Masson Pat Goldrick
Chairman Chief Executive
13 February 2002
DIRECTORS:
D Masson* (Chairman)
P.K. Goldrick (Chief Executive) (Irish)
C B Fourie
C T Daly
F M Rossouw*
*Non-Executive
COMPANY SECRETARY:
Alan C Smith
REGISTERED OFFICE:
Cnr. Aeroton and Aerodrome Roads,
Aeroton,
Johannesburg, 2001
PO Box 90115,
Bertsham, 2013
TRANSFER SECRETARIES:
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg 2001.
PO Box 1053, Johannesburg, 2000.
AUDITORS:
PricewaterhouseCoopers Inc.
SPONSOR:
BOE Securities (Pty) Limited
WEBSITE:
www.cashbuild.co.za
