The Covid-induced home renovations boom is over for Cashbuild
The Covid-induced home renovations and building boom is over for Cashbuild, as the largest JSE-listed retailer of building materials and associated products reported its worst half-year performance since 2018 on Tuesday.
Its interim revenue, operating profit, and headline earnings and dividend for the period ended 25 December 2022 were all significantly down compared to the group’s 2021 and 2020 half years.
Cashbuild was one of the biggest beneficiaries in the retail sector from the Covid-19 home renovations boom and historically low interest rates during the peak of the pandemic, which saw consumers under lockdown spending more on their homes.
The group reported a 4% decline in revenue (to R5.6 billion) for its latest half-year, while headline earnings plunged 39% to R156 million, compared to the corresponding half-year period.
This saw the group slashing its interim dividend for the current financial year by 32%, to 400 cents a share.
Cashbuild said in its half-year results media statement on Tuesday that the results were “reflective of the current tough economic and trading environment”.
However, Cashbuild CEO Werner de Jager, also highlighted increased competition from independent competitors.
“The notable increase in independent competitors as well as the concerning increase of unregulated, inferior products in the market will also continue to negatively impact our business,” said de Jager.
“We will focus on protecting and growing market share through various initiatives over the short- to -medium-term,” he said.
He warned that trading conditions would continue to remain challenging.
“Although our operations are less affected by load shedding due to either generators, battery power or solar systems at our stores, these installations come at a cost,” he said.
Cashbuild noted in its results Sens statement on the JSE that group revenue for the six weeks subsequent to period end (after 25 December 2022) is 8% lower than the prior year’s comparative six-week period.