Supporting local pays off for Cashbuild in half-year results
FD Etienne Prowse attributes profits to ensuring Cashbuild always had stock through local suppliers.
South Africa’s largest retailer of building materials, Cashbuild, has more than doubled its interim profit for the six months ended 27 December 2020.
Cashbuild FD Etienne Prowse attributes the great results to the company sticking by its principles of being in stock. “Where stocks were running low in the country we made arrangements with suppliers to ensure we remained in stock.”
He explains that because Cashbuild kept on paying their suppliers throughout the Covid-19 lockdown, the company can now call upon them when it needs stock.
“When our competitors that import a large portion of their stock were running low, we seemed to attract more customers, as seen in our transaction counts that increased by 14 percent,” he says. “We have always supported local businesses and only have about 15 percent imported content in our sales mix.”
While its competitors have been struggling to import supplies and make sales, Cashbuild has been able to trade in full since lockdown level 4 and its top line sales over the period have constantly been up 20 percent. “I do foresee that when suppliers are all able to get back to full production levels and stock all competitors, those margins will come under pressure and so too the top line,” he explains.
Casbuild also reported a revenue increase of 21 percent for the period.
Etienne says that, in the current environment, the top line sales reported was a great feat. He explains that ensuring the company keeps its cost growth under control resulted in the doubling of profits compared to the previous year. “To be able to do this during these unusual times and grow our cash balances to R2.8 billion makes me proud to be part of Cashbuild.”