Acquisitive Hardware Warehouse looking to expand to Limpopo, ...

Tag : building hardware

AltX-listed low-cost building materials retailer Hardware Warehouseintends to "aggressively seek acquisitive opportunities"in Limpopo and Mpumalanga provinces, it stated on Thursday.
The retailer said in a statement to shareholders that this wouldextend its footprint to four provinces and about 70% of itspotential South African customer base in a relatively short periodof time.
The company, which is based in the Eastern Cape, said it alsowanted to grow its current base in KwaZulu-Natal over the next 12months.
Hardware Warehouse, led by CEO Shaun Miller , said it was also seeking alliances for expansion into theSouthern African Development Community region at the end of 2009 orearly in 2010.
"It is within Africa that we strongly believe our unique andsimplistic business model will enable further growth, specificallyfor margins," the company said in the statement.
Meanwhile, the retailer said its results for the year ended June30, 2008, were "pleasing" and had exceeded its prelistingforecasts, despite the challenging retail market environment.
The company noted that, despite the retail sector being affected byhigher interest rates, and higher fuel and electricity costs, itscustomer base was at a level where housing was a need, with anydownturn in demand offset by government spend.
It added that, despite the inflationary conditions of late 2007 andearly 2008, the company had achieved "real growth". Italso expected the positive effects of this inflationary period tofilter through in the first six months of its 2009 financialresults.
Net profit was up 70,4% to R10,46-million for the year ended June30, 2008, compared with R6,14-million the year before.
Headline earnings a share increased by 47% to 15,49c a share forthe 2008 financial year, compared with 10,54c a share for the yearended June 2007.
Revenues were up 74,6% to R220,5-million for the year, comparedwith R126,3-million for the year ended June 2007.
Hardware Warehouse stated that this increase was owing to both newand existing stores, with new stores contributing to 43,4% of therevenue, and existing stores contributing 31,2%.
During the 2008 financial year, it had made two store acquisitions,one of which was its first entry into the KwaZulu-Natal market, andhad bought three new sites on which to build stores.
This was in addition to the 16 stores it already owned.
Meanwhile, the retailer stated that significant effort had been putinto developing its Bath and Tile Warehouse brand, with the firstconcept store having opened in November 2007.
The first standalone Bath and Tile Warehouse brand store startedtrading at the end of the 2008 financial year and the companyplanned to open a further two of these stores during the 2009financial year.
This was in addition to its store-within-a-store approach, in whichBath and Tile Warehouse stores were opened within HardwareWarehouse stores, if standalone stores were not feasible.
Further, the retailer noted that product diversification wouldcontinue, following its expansion into new regions.
In July, it had announced that its strategy was to diversify itscustomer base and product range to sell more upmarket products to ahigher living standard measurement category in urban areas.