Cashbuild stock rallies to record highs

Cashbuild's share price rallied to record levels at noon on Tuesday after the building materials retailer posted strong half-year profit growth, coupled with a positive outlook

Cashbuild, which has operations in South Africa and southern Africa, reported a 134% rise in diluted headline earnings per share to 652.1 cents in the six months ended December 2011, from 278.8 cents a year ago.

Revenue was up 9% at R3.253 billion, while operating profit grew 80% to R209.15 million. Excluding the effects of black economic empowerment transaction implemented in the prior comparative period, operating profit was up 25%.

An interim dividend of 296 cents per share was declared, up 89% on the previous year's interim dividend of 157 cents.

"This increase [in earnings] for the half-year has been achieved in tough trading conditions with selling price inflation of 5%. Disappointing customer transaction growth - 1% growth was from the new stores with a decline of 1% from existing stores - is an area of focus for management for the remainder of the year," the company said in a statement.

The company's customers include typically home-builders and improvers and large construction companies.

Cashbuild said it remained positive about the top line trading prospects for the next quarter. "The first nine trading weeks since period-end have reported an increase in revenue of 10% on that of the comparable nine weeks," it said.

At 14.30, the share price was up R3 or 2.50% to R123 on the JSE, off the intraday record high of R125.