CASHBUILD: Built and Rebuilt on Immovable Foundations

From a vast, ever-growing network comprising well over 300 stores taking in South Africa, Namibia, Lesotho, Botswana, Swaziland, Malawi and Zambia, Cashbuild, whose shares have been listed on the JSE Securities Exchange since 1986, has honed its very own formula of selling directly to cash-paying customers to become the dominant retailer of building materials and associated products.

South African construction has been on the receiving end of several massive shots in the arm to aid its recovery from the impact of the Covid-19 pandemic. With infrastructure investment critical in propelling the economy back into action, government announced that it is to pledge, over the course of a 10-year infrastructure investment plan, ZAR2.3 trillion (US$124.7 billion) to benefit the housing, energy, agriculture, transport, water and sanitation and digital infrastructure sectors.

Combined with a resurgence in pandemic-inspired renovation, it is underpinning the complete revitalisation of an industry under severe pressure in recent years brought on by a dearth of infrastructure investment to this level, weak economic growth and low business confidence. The rebound is forecast to continue into 2022 and expand by 9.1% in real terms, building on the growth realised in 2021, and then stabilise at an annual average growth of 3.1% between 2023-2025.

CEMENTING LEADING STATUS

What a time, then, to be the preferred vendor of mass building materials, home improvement and related products in each and every one of its territories and markets, able to offer a focused range of products and services suited to the specific needs of each. “We are the preferred retailer and integrated supplier of building materials, associated products and services, through chosen brands, across all market segments in selected countries, serving home-builders and improvers, contractors, farmers, traders,” Cashbuild opens.

“Cashbuild is the first choice retailer in its chosen field in all the regions in which it operates. It achieves this by carrying a focused in-depth quality product range at the most competitive prices, to meet the needs of the local market for homebuilders, home improvers, contractors, farmers, traders and any customers requiring quality building materials at the best value.”

Employing close to 7000 people through the totality of Cashbuild Limited, the South Africa-based arm, and the various operating subsidiaries registered in the many other countries it has established a presence, Cashbuild sets out to empower, recognise and reward its people at every turn. “Our progressive human resources practices, which promote a challenging and productive working environment and ensures that all our people develop to their fullest potential and are recognised and rewarded for outstanding performance.

“Cashbuild is committed to the development of all its employees and encourages self-motivation and initiative.”

Benefitting from a more than 40-year heritage in the industry, the company has grown into the leading brand for affordability and quality materials and true one-stop-shop for every conceivable DIY and renovation need, boasting product lines spanning the likes of bathroom, building, doors and windows, garden and hand tools, household and lighting products, paint and security wares.

If that weren’t enough, Cashbuild has also built up an array of value-added services in the unending quest to ameliorate its service offering. The VIC card has succeeded in developing a veritable fellowship among Cashbuild’s largest customers at national, regional and store level, and served to increase customer loyalty and, in turn, increase Cashbuild’s purchasing power.

The Cashbuild Payment Card is also now available, to facilitate the purchase of building materials on credit, as is access to Nedbank personal loans, the perfect way to easily acquire the goods required for the project at hand. “We manage and improve our business through the Cashbuild way,” the company distils of this approach of continual innovation and development.

“We deliver exceptional service and total customer satisfaction.”

BUILDING DESPITE SETBACKS

Not only blighted by the turmoil of the pandemic and its oft-ruinous reverberations, Cashbuild was also forced to rebuild as swathes of South Africa were affected by last summer’s spate of looting, violence, vandalism and property damage. Almost one tenth of its store portfolio was left damaged and unable to trade, with 32 Cashbuild and four P&L Hardware sites affected, the latter acquired by Cashbuild in 2016.

It hit group revenue to the tune of 10% for the first six weeks after year end, but the company was immediate in its assurances to stakeholders, confirming that comprehensive insurance cover in place would serve to minimise losses to the group and the initiation of the process of rebuilding, restoring and restocking those establishments impacted.

It was this customary resilience and stoicism in the face of any challenge thrown at it that had enabled Cashbuild to post a revenue increase of 25%, to R12.6 billion, and gross profit to swell by 34%. Basic earnings per share increased by 149% to R29.36, while headline earnings per share reached R28.73, a 152% boost from the prior year. It was a strength and ability to overcome which Cashbuild again called upon in its vow to continue to pursue growth opportunities, despite the shelving of its planned R1 billion acquisition of Pepkor subsidiary The Building Company (BUCO), which owns TimberCity and Tiletoria.

The two parties were unable to agree on an extended timeframe for the deal following the Competition Commission’s recommendation that it be blocked, as reported in May last year, when it adjudicated that the proposed merger would create the single largest retailer of building material, hardware and related products in South Africa.

“The proposed merger will give the merging parties the ability to unilaterally increase prices or change trading terms in several geographic areas,” it ruled, also concerned that the merging parties would use their buying power to exclude their rivals from competing in townships or rural areas.

Disheartened, perhaps; nevertheless, Cashbuild was undeterred in its mission to open an average of 10 new stores each year, which would be approved based on the identified locations showing clear potential to meet strict financial and operational criteria. “We have consistently grown revenue and operating profit, and we won’t be slowing down,” it pointed out, as Werner de Jager, Cashbuild CEO, added that the transaction would have aligned with Cashbuild’s overarching vision.

“We are disappointed with the termination of the acquisition of BUCO,” he expressed, “as we firmly believe that this transaction would have aligned with Cashbuild’s vision of being the preferred supplier of building material and associated products and services across all market segments.

“Cashbuild will, however, continue to pursue growth opportunities while still maintaining its commitment to its customers in the South African and neighbouring market,” he countered in closing. “Opportunities to expand further into the rest of Africa will continue to be carefully considered and their viability assessed, as and when they become evident.”