e-spaces

Cashbuild had managed to reverse declining volume sales after it “took corrective action” on core product lines, particularly cement and bricks, the chief executive, Pat Goldrick, said yesterday.

April 25, 2008

By Tom Robbins

Cape Town – Cashbuild had managed to reverse declining volume sales after it “took corrective action” on core product lines, particularly cement and bricks, the chief executive, Pat Goldrick, said yesterday.

Goldrick said this action to grow profitable market share at the retailer had been positive.

Same-store volume sales in the three months to March were up 3 percent, compared to the same period last year. Volumes had declined 10 percent in the six months to December.

Goldrick said there had been no shift in the sales mix strategy towards lower rand-value items.

Comparable-store rand-value sales were up 14 percent for the quarter. Sales including new stores rose 19 percent.

The company targets lower-market home renovators in rural and urban areas. Despite a decline in the number of new houses built for higher-market segments due to rising interest rates, the government’s low-cost housing delivery is unaffected by this.

Brian Pyle, a portfolio manager at Old Mutual Investment Group SA, said it was a good volume growth figure in a tough market. But Pyle warned that since March, Cashbuild’s customers would have been hit by recent rises in the cost of living, including higher fuel and food prices. “The gas hasn’t hit the carburettor yet,” he said.

Pyle said it was likely that the building materials retailer had stolen market share in the three months to March. Cashbuild’s share price rose 7.1 percent to R57 on Monday, the day it released a trading update on sales figures.

The share price declined 1.09 percent to close at R55 yesterday at 5pm, while the sector lost 2.01 percent.