Cashbuild delivered a modest topline performance in FY25, with the group focused on pricing products aggressively to capture more sales, volumes and market share. Tied to this was management’s focus on protecting margins by implementing strategic cost-saving measures. As a result, the group achieved a commendable rise in operating margin. While results on a statutory basis show CSB losing some market share in the retail hardware market, if we adjust for the 53rd week present in last year’s results, CSB grew ahead of the market.
The roadmap for the Cashbuild SA segment will likely comprise a significant number of store rollouts and new stores converted from the P&L Hardware chain. While this endeavour should be a significant boost to the topline for the segment, we expect capital expenditure to remain elevated over the short term. Added to the store network will also be the Allbuildco acquisition. This is likely to be completed in 2H26, but it remains to be seen what management will do with the three large-format stores it acquires. We believe they will most likely be converted to the large-format CashbuildXtra.
In contrast, P&L Hardware is delivering on its turnaround despite the contraction in revenue for FY26. However, management has stated that this chain is expected to convert or consolidate a further 15 stores until only 15 P&L Hardware stores remain. We expect management to decide on the long-term viability of the brand once most of the new Cashbuild stores are bedded down and P&L Hardware returns to breakeven.