The implementation of the two-pot retirement system, interest rate cuts and lower inflation have not brought about the relief SA’s building retail sector hoped for over the second half of last year, according to Cashbuild.
The group supplies its largely cash-paying customer base through 318 stores, servicing primarily low- to middle-income homebuilders, contractors, farmers and other consumers with building materials and related products.
Cashbuild delivered a stable financial performance for the six months ended December despite a macroeconomic and trading environment which remained challenging.
Headline earnings per share were up 4% to 572.8c, with the group declaring an interim dividend of 326c, unchanged from the previous matching period.
Revenue was up 5% to R6.1bn, while operating profit excluding prior period P&L Hardware goodwill and trademark impairment losses decreased by 7%, the group said.
The group opened three new stores and refurbished 14, while one store was relocated, and another seven underperformers were closed during the period.
In the seven weeks after December, the retailer’s revenue grew by 6% year on year, but CEO Werner de Jager said adverse weather patterns had since put a dampener on sales.
“Although interest rate cuts and reduced cost inflation are expected to provide much-needed relief to distressed consumers, we remain cautiously optimistic regarding the outlook for the remainder of 2025,” he said.
De Jager said that despite the group's optimism that the two-pot retirement system would lift consumer spending in the final quarter, it failed to produce growth in the building retail subsector.
“It seems like people used that money to pay taxes, buy food and household goods and settle some of their debt which is good in the long term, but we have not seen any direct benefit. We’re a discretionary spend, so we need to wait for the economy to pick up and for consumers to be in a better state before we start seeing that benefit,” he said.
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