Cashbuild reports a drop in half-year profit

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Building materials retailer Cashbuild reported a fall in half-year profit as consumers grapple with high-interest rates and a weak economy. Revenue for the period increased by 2% while operating profit including the impairments, fell by by 81%.

Headline earnings per share also decreased by 20% from the prior period.

CEO Werner de Jager says they’ve been aggressive in its pricing which has resulted in a drop in the gross margin. He says the pressures of paying staff and landlords are also reflected, as those their two biggest cost.

De Jager says for the first time in three years, the hardware retailer reported growth in customer transactions. He further says the average basket for the first quarter was unchanged compared to the year before.

However, in the second quarter there was a 4% increase on the average basket.

“We’re seeing that the structural items like cement and bricks and timber, those things are the ones that are not doing well. But the products that the decorative products like the floor tiles, paint and decorative ceilings and cornices, those are all the things that are still doing well in our business. We believe customers don’t have the money to spend on big projects, that bit of money that they have to spend, they spend on smaller projects in and around the home.”

Company Results | Cashbuild reports a drop in half-year profit: Werner de Jager: