Our opinion on the current state of CASHBIL(CSB)
Cashbuild (CSB) is the largest retailer of building materials and related hardware in Southern Africa, focusing primarily on the home improvement market. In the context of the currently depressed economies in the region, much of the company's growth has been driven by the opening of new stores. This strategy positions Cashbuild to survive the economic downturn and benefit from any general recovery in Southern Africa's economic conditions.
In its results for the six months ending 24th December 2023, the company reported a revenue increase of 2%, while headline earnings per share (HEPS) decreased by 20%. The company's net asset value (NAV) fell by 16% to 7757c per share. The company noted that revenue from stores that existed prior to July 2022 (312 stores) increased by 1%, and its nine new stores contributed an additional 1% to growth. However, the gross profit margin decreased slightly from 25.3% to 24.7%, with selling price inflation at 3.2% by December 2023 compared to the previous year.
In a subsequent update on the third quarter ending 31st March 2024, the company reported a 3% increase in revenue, with the nine new stores again contributing 1% growth. Selling inflation during this period was 2.4%. By the fourth quarter ending 30th June 2024, Cashbuild reported a 4% revenue increase compared to the same quarter of the previous year. For the full financial year, existing stores contributed a 3% revenue increase, while the 12 new stores added 1% growth.
In a trading statement for the 53 weeks ending 30th June 2024, Cashbuild estimated that HEPS would decrease by between 20% and 30%. Technically, the share experienced a steady downward trend from March 2018, bottoming out at R120 per share in March 2020. It subsequently rose to R337 in February 2021 before beginning another downward trend, with the current price around R164. The stock is now trading at a P:E ratio of 15.19 and offers a dividend yield of 3.2%.
Cashbuild is widely regarded as an extremely well-managed company, well-positioned to capitalize on any future improvement in local economic conditions. However, it operates in a tough and highly competitive industry, and even at current levels, it may still appear a bit expensive.
In its results for the six months ending 24th December 2023, the company reported a revenue increase of 2%, while headline earnings per share (HEPS) decreased by 20%. The company's net asset value (NAV) fell by 16% to 7757c per share. The company noted that revenue from stores that existed prior to July 2022 (312 stores) increased by 1%, and its nine new stores contributed an additional 1% to growth. However, the gross profit margin decreased slightly from 25.3% to 24.7%, with selling price inflation at 3.2% by December 2023 compared to the previous year.
In a subsequent update on the third quarter ending 31st March 2024, the company reported a 3% increase in revenue, with the nine new stores again contributing 1% growth. Selling inflation during this period was 2.4%. By the fourth quarter ending 30th June 2024, Cashbuild reported a 4% revenue increase compared to the same quarter of the previous year. For the full financial year, existing stores contributed a 3% revenue increase, while the 12 new stores added 1% growth.
In a trading statement for the 53 weeks ending 30th June 2024, Cashbuild estimated that HEPS would decrease by between 20% and 30%. Technically, the share experienced a steady downward trend from March 2018, bottoming out at R120 per share in March 2020. It subsequently rose to R337 in February 2021 before beginning another downward trend, with the current price around R164. The stock is now trading at a P:E ratio of 15.19 and offers a dividend yield of 3.2%.
Cashbuild is widely regarded as an extremely well-managed company, well-positioned to capitalize on any future improvement in local economic conditions. However, it operates in a tough and highly competitive industry, and even at current levels, it may still appear a bit expensive.
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