Cashbuild HY revenue inches up 2%

Building materials retailer Cashbuild has reported a 20% decline in earnings for the six months ending in December, despite a low base set in the same period a year earlier. Werner de Jager, CEO of Cashbuild, discussed the company's performance in a recent interview with CNBC Africa. De Jager highlighted that the revenue for the period increased by 2%, with 1% growth coming from existing stores and another 1% from nine new stores. He clarified that the new stores were not generating revenue at a faster rate but were simply adding to the existing business, resulting in the overall growth of 2%. The tough operating environment in the sector has posed challenges for Cashbuild, with hardware sales in South Africa declining by over 5% in recent periods. To combat the challenging market conditions, Cashbuild has adopted a more aggressive pricing strategy in the past six months. While this approach has led to a slight decrease in gross margin, the company is focused on driving top-line growth and ensuring competitive pricing. De Jager emphasized the importance of maintaining ample stock levels to meet customer demand and pledged to beat competitor prices with their price-match guarantee. Despite experiencing a high level of stock, which contributed to a decrease in cash reserves, De Jager remains confident in Cashbuild's strategy. The company's stock days remain steady at 90 days, and while there is room to optimize inventory levels, De Jager believes it is more prudent to have excess stock than to risk missing out on sales in the current market conditions. In conclusion, Cashbuild's resilience in the face of tough market conditions and strategic focus on aggressive pricing and stock management will be crucial in navigating the challenging landscape ahead. The company remains committed to driving sales growth and maintaining its competitive edge in the building materials retail sector.