Cashbuild drops 7% to seven-month low
Johannesburg - Shares in Cashbuild (CSB) dropped as much 7% on Wednesday to seven-month lows after the building materials retailer reported slow revenue growth in the December quarter.
“The trading update has disappointed the market as the retailer was priced for strong growth‚” Vestact portfolio manager Byron Lotter said.
Revenue for its second quarter to December 2012 was up 1% from a year earlier.
In the past three years‚ revenue growth for the company has been above 8%.
“It is no coincidence the update was released in the same day as African Bank’s‚ which showed a slowdown in unsecured lending. The other potential reason for the slowdown in sales could be the strike activity last year‚ which affected low-income earners’ disposable incomes‚ because the company is largely geared towards rural areas‚” Lotter said.
At 10.37am‚ the share price was down 6.6% at R138.80‚ the lowest level since July 3‚ valuing the company at R3.491bn. - I-Net Bridge