Cashbuild launches ADR programme to attract US investors

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Cashbuild CEO Werner de Jager said the American Depositary Receipt (ADR) programme would give Cashbuild access to much larger investors. Cashbuild CEO Werner de Jager said the American Depositary Receipt (ADR) programme would give Cashbuild access to much larger investors.

Building materials retailer Cashbuild (CSB) has launched its American Depositary Receipt (ADR) Programme on the over-the-counter (OTC) market in the US through a sponsored ADR programme with BNY Mellon.

Each Cashbuild ADR represents one ordinary share and trades on the OTC market in the US‚ the company said in a statement on Tuesday.

“We aim to provide access to investors who would not normally be able or allowed to invest in Cashbuild. A benefit of the DR programme is that it is a way to boost awareness about Cashbuild and attract more attention among the US financial community‚” said Cashbuild CEO Werner de Jager.

The investment proposition for US investors was that they could buy a dollar-denominated share in a South African-based company with a long and stable history of sustainable growth in Southern Africa.

Lauren de Klerk, vice-president of BNY Mellon’s depositary receipts business, said that depositary receipts were gaining in popularity among South African counters.

"Today, 34 of the JSE top-40 have a depositary receipts programme. Three companies established programmes on the US market in the last month with BNY Mellon," she said.

Growthpoint and Redefine were property companies, which also listed their ADR programmes. More programmes would follow and BNY Mellon would work closely with Cashbuild to enhance its profile and meet its objectives.

An ADR is a negotiable security that represents securities of a non-US company that trades in US financial markets.

Each Cashbuild receipt represented one ordinary share and trade on the over-the-counter market in the US under the symbol CBUDY. Cashbuild ordinary shares trade on the JSE under the symbol CSB.

In its most recent set of financial results, Cashbuild reported its revenue in the year to June had climbed 1%, while gross profit slumped 1% in difficult trading conditions.

But operating profit fell 19%, mainly because operating expenses rose by 6%.

Cash, cash equivalents and financial assets fell 49% to R249m in the year as a result of increased capital expenditure and stockholding. Gross margin was at more normalised levels of 22.8%.


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