Prominent South African building company set for earnings jump

Cashbuild is expected to bounce back from the poor results of its 2024 financial year, with the company’s earnings set to grow by over 3,000% in its upcoming interim results.

In a trading update released on Monday, 24 January 2025, Cashbuild said it expects a significant increase in its earnings for the 26 weeks ended 29 December 2024.

Cashbuild is one of southern Africa’s largest retailers of building materials and associated products.

For the 53 weeks through June 2024, Cashbuild reported weak results.

While revenue was up around 5% to R11.2 billion, Cashbuild’s cost of sales grew by almost 6%, which put pressure on the company’s margins.

This saw its profit for the year decreased by 23.78% to R87.58 million, down from R114.90 million the year prior.

Cashbuild’s basic earnings per share declined by 13% to 396 cents per share, while headline earnings per share declined by 22% to 947 cents.

The company attributed this decline to a difficult local trading environment, which translates to fewer customers and higher costs of sales.

Aside from the difficult trading environment, Cashbuild also took impairments of R136.7 million in the 2024 financial year.

However, CEO Werner de Jager said at the time that his company was more optimistic about the next financial year.

He said the Government of National Unity and the implementation of the two-pot system would stimulate economic growth in the country.

In addition, he hoped that much-needed infrastructure programmes would find traction during the 2025 calendar year.

“In addition, the outlook is that interest rates will reduce towards the latter part of the 2024 calendar year and will alleviate some of the consumer spending pressure,” he said.

These hopes seemed to have materialised, as the first half of Cashbuild’s 2025 financial year is set to bring far better results for the company.

In the trading update released on Monday, Cashbuild said it expects to report –

• Earnings per share (EPS) of between 529.8 cents and 556.9 cents, compared to EPS of 14.0 cents reported for the 26 weeks ended 24 December 2023 
• Headline earnings per share (HEPS) of between 551.8 cents and 579.4 cents, compared to HEPS of 551.8 cents in the comparative period 

The company explained that the stark turnaround in EPS between the two reporting periods is mainly due to the impairment of its remaining P&L Hardware goodwill and trademark reported in the prior period.

Cashbuild will release its full interim results on 5 March 2025.