SA’s biggest building materials retailer, Cashbuild, has flagged a double-digit revenue fall for its half year to end-June, still feeling the pinch from July 2021’s riots and the fading effects of a Covid-19-inspired home improvement boom.
Group revenue in the fourth quarter was down 13% year on year, the retailer said in a brief trading update, despite selling inflation of 7.2%, while its 14 new stores contributed a percentage point of growth.
The group, which has 318 stores, said that equated to a revenue decrease of 12% for the full financial year, which is in line with its revenue fall at half year.
The builder had generated a record R12.62bn in revenue for 2021, up a quarter from 2020, while profit had more than doubled as it cashed in on pent-up demand for home improvement during the Covid-19 pandemic, which forced people to spend more time at home.
The slowdown in home improvement has been seen in weaker results in Massmart’s Builders Warehouse, Pepkor’s Building Company and Italtile in the past year.
Small Talk Daily analyst Anthony Clark said the building sector and residential home improvement sector will continue to weaken as consumes face high fuel and food inflation and increasing interest rates, which translate into higher bond repayments.
“The DIY sector is one of the last places I want to be in right now,” Clark said.
Looting and violence in July 2021 had also affected 36 of the group’s stores, with Cashbuild saying on Monday that excluding these stores, revenue fell 7% for the full financial year.
By close of trade on Monday, Cashbuild’s shares were little changed at R275.07, giving the group a value of R6.87bn. The shares have risen 7.75% so far in 2022.
Update: July 25 2022
This story has been updated with addition al information, including the closing share price.
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