Cashbuild sees decline in full-year revenue due to COVID-19 lock-down

Cashbuild, a leading building materials retailer, has announced a decline in full-year revenue due to the impact of the COVID-19 lockdown measures. The company reported a reduced annual dividend of 272 cents per share, marking a 35.2% decrease from the previous year. Cashbuild CEO, Werner de Jager, discussed the challenges faced by the company and the strategies in place to navigate through these tough times during an interview with CNBC Africa. De Jager mentioned that the group experienced a significant loss of approximately R600 million in revenue as a result of the stores being closed down during the level 5 lockdown period. Despite the financial setbacks, Cashbuild remains committed to its dividend policy of a two-time cover. De Jager acknowledged the current uncertainty surrounding the future of the business landscape, expressing caution about predicting when dividend levels would return to pre-COVID-19 levels. The financial results revealed that revenue from Cashbuild's existing stores witnessed a 10% decline, while the 22 new stores contributed to an increase, resulting in a 3% growth overall. The impact of the COVID-19 pandemic is evident in the financial performance of the company, with the existing stores bearing the brunt of the revenue reduction. However, amidst the challenges posed by the pandemic, Cashbuild experienced a surge in revenue following the easing of lockdown restrictions. De Jager revealed that revenue figures saw a significant uptick, with a 22% increase in the first six weeks since trading resumed. The shift towards home improvement projects during the lockdown period contributed to the positive revenue trend experienced by the company. De Jager highlighted the resilience of South African consumers, noting that despite the economic uncertainties and the threat of retrenchments, the company remains focused on delivering excellent customer service and value to its customers. He emphasized the importance of adapting to the evolving business landscape and remaining agile in responding to changing consumer preferences. In a strategic move to expand its market presence, Cashbuild recently acquired a building company from PIPCO, a decision that was well received by the market. De Jager emphasized that the acquisition aligns with the company's growth strategy and enables Cashbuild to tap into new market segments that were previously underserved. The acquisition is seen as a key initiative to drive sustainable growth and enhance shareholder value. Looking ahead, Cashbuild remains cautious about making further acquisitions until the current transaction is fully finalized. De Jager stressed the importance of integrating the acquired business seamlessly into Cashbuild's operations to maximize the value generated for shareholders. The company is focused on executing its strategic objectives and leveraging the strengths of the acquired entity to fuel future growth. In conclusion, Cashbuild's financial performance reflects the profound impact of the COVID-19 pandemic on the retail sector. Despite the challenges faced, the company remains optimistic about the resilience of the South African market and is committed to weathering the storm through strategic initiatives and a customer-centric approach.