Johannesburg - Shares in Cashbuild [JSE: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
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.
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