Cashbuild's financial performance: Navigating market challenges and growth strategies

Cashbuild, one of southern Africa’s largest retailers of building materials and associated products, grew revenue from market share gains in a very difficult consumer spending environment through the year to end-June 2025.

The group, which sells to a predominantly cash-paying customer base through 318 stores, saw its margins come under pressure in spite of good cost controls, chief operating officer Shane Thoresson said in an interview on Wednesday.

The average selling price inflation remained steady and low, at 1.7%. Thoresson said although the market was still tough, they had seen a slight uptick in market sentiment towards the end of their financial year, and footfall was up 6%, indicating “more customers are coming through our doors.”

He said there was likely little scope to grow margins significantly in the new financial year. There were, however, a range of initiatives implemented over the past few years that should help to boost performance. There were also new initiatives underway, such as the launch of two new brands, and early indications from the first two stores from these brands were positive.

Eight new stores were currently planned in the group, he said. During the past year, Cashbuild opened 8 new stores, 7 Cashbuild and 1 P&L Hardware store, and refurbished 26 stores. Twelve stores were closed due to underperformance, comprising 11 P&L Hardware stores and 1 Cashbuild store.

Cashbuild also relocated 1 P&L Hardware store and converted 6 P&L Hardware stores into Cashbuild Small/Alternative Model Stores At the financial year end, Cashbuild had 318 stores, down from 322 stores last year.

In the year, the average basket size declined by 1.1%, from R737 in 2024 to R729. This decrease was mainly attributed to a shift in customer mix, with a higher proportion of retail shoppers compared to “bakkie” builders.

CEO Werner de Jager said their revenue for the seven weeks subsequent to year end was 6% higher than the prior year’s seven-week period, “which is pleasing.”

Revenue for the 2025 financial year increased by 3%, impacted by the 53-week period reported in the prior period, but the growth was 5% on a 52-week basis. Comparable like-for-like store sales increased by 2%, and 14 new stores contributed 1% growth. Transactions through the till increased by 4%. Gross profit increased by 2%.

Operating expenses fell 3% - there was a prior year impairment of R137m of goodwill and trade markets in P&L Hardware and an extra week’s expenses in the 53 weeks of the prior year.

“As we look ahead to 2026, we remain cautiously optimistic despite unrelenting challenges facing our core customer base. Consumer sentiment remains fragile, especially among lower-income households. Although some relief has come through social support measures and lower interest rates, the persistently high cost of living, including energy costs, have eroded disposable income and dampened spending confidence,” said De Jager.

However, despite being cautious, “revenue for the seven weeks subsequent to year end is 6% higher than the prior year’s comparative seven-week period, which is pleasing,” he added.

Headline earnings per share were up 10% to 1040 cents from 947 cents. Cash and cash equivalents, including short-term funds, increased to R1.96bn. A final dividend of 300 cents brought the total dividend to 626 cents per share, an increase of 12% on the previous total dividend of 561 cents per share.

BUSINESS REPORT