Picture: SUNDAY TIMES
Picture: SUNDAY TIMES

Building materials retailer Cashbuild has warned of a sharp drop in profits for its year to end-June, partially due to the effect of accounting changes that bring leases onto the balance sheet.

Reported headline earnings per share (Heps) is expected to fall 36%-41% from 1,910.4c previously, the group said in a trading update.

On a comparable basis, which excludes the effect of accounting changes, Heps will fall 10%-15%, the group said.

In morning trade on Monday Cashbuild’s share was up 2.79% to R188.98, having earlier risen to its highest level since January.

The group’s share has risen about 20% since August 4, when it announced it had agreed to acquire Pepkor’s The Building Company (TBC) for almost R1.1bn.

The acquisition will almost double Southern Africa’s largest building retailer’s revenue, with CEO Werner de Jager saying at the time the acquisition would also give Cashbuild additional access to SA middle- to high-income consumers.

gernetzkyk@businesslive.co.za

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