MASSBUILD DIVISIONAL REVIEW
HOME IMPROVEMENT RETAILER AND BUILDING MATERIALS SUPPLIER

MASSBUILD STORE PROGRESS

OPENING BALANCE
   

BUILDERS WAREHOUSE

 
   
TOTAL STORES
DECEMBER 2012
   
OPENING BALANCE
   

BUILDERS EXPRESS

 
STORES OPENED 
MIDDELBURG  
   
TOTAL STORES
DECEMBER 2012
   
OPENING BALANCE
   

BUILDERS TRADE DEPOT

 
   
TOTAL STORES
DECEMBER 2012
   
Trading space m2 395,871
DC space m2 29,624
Financial performance

Sales
R4,663.1 million

Trading profit before tax
R292.6 million


Improving efficiencies


Investing in our human resources


Investing in our community

In 2011, Massbuild met the passionate and inspiring Maria Botha, of Ripples For Good, and the journey to make a meaningful difference in the lives in people in need began.Maria and her two Jack Russels are the ambassadors of this project and havetravelled around South Africa where, in 2012, 36 schools were assisted.

HIGHLIGHTS

  • Sales growth of 10.0%
  • BWH and BEX expense growth lower than sales growth
  • Botswana sales and trading margin percentages exceeded budget
  • Trading profit before tax increased by 23.6%

KEY SALES DRIVERS

  • Interest rates
  • Residential property prices and housing growth
  • Consumer confidence and disposable income
  • Price perception
  • New stores

  • Five Builders Warehouse stores acquired in February 2003
  • Three De La Rey stores acquired in June 2005, rebranded to Builders Warehouse
  • Now 28 stores
  • Operating in SA and Botswana
  • Home improvement supplies/tools/building materials
  • LSM 5-10
 

  • 34 Federated Timbers stores acquired in June 2005, rebranded to Builders Trade Depot
  • Now 29 stores
  • Operating in SA
  • Tools/building materials
  • LSM 4-8
 

  • 14 Servistar stores acquired in June 2005, rebranded to Builders Express
  • Now 28 stores
  • Operating in SA
  • Home improvement supplies/tools/building materials
  • LSM 5-10

The Massbuild brands

Massbuild operates three main complementary brands: Builders Warehouse, which operates large home improvement stores in major urban areas; Builders Express, a chain of smaller neighbourhood home improvement stores; and Builders Trade Depot, focusing on delivering the core range for all phases of building projects, focusing on contractors.

Massmart acquired five Builders Warehouse stores operating in Johannesburg and Pretoria in 2003, bought and rebranded three De La Rey stores in the Western Cape in 2005 and now operates 27 Builders Warehouse stores in eight provinces in South Africa and one in Gaborone, Botswana. Builders Warehouse follows the big-box or warehouse retail format, offering home owners, DIY enthusiasts and building and maintenance contractors a comprehensive range of competitively priced products under one roof, with a large garden centre display and a builders’ supplies yard. The brand is unique in that it is the only home improvement warehouse in South Africa.

Builders Express was formed in 2005 when Massmart bought and rebranded 14 Servistar stores operating in the Eastern Cape and KwaZulu-Natal. Massbuild now operates 28 home and garden Builders Express stores in five provinces that cater to home owners and provide a “filler strategy” for the Group – situated in convenient locations with aesthetically pleasing displays, customer-friendly store layouts and offering personalised service and advice.

Builders Trade Depot was formed when 34 Federated Timber stores were acquired and rebranded in 2005. Seven smaller stores have since been closed and after some conversions and acquisitions, Builders Trade Depot now operates 29 stores catering mostly for medium- to large-sized contractors and tradesmen engaged in building, maintenance and renovation projects. It also focuses on servicing the needs of construction entrepreneurs who need trade credit, telephonic ordering and want bulk goods delivered from low-cost outlets.

The Company acquired Kangela in Mozambique in 2010, and this represents our fourth brand. There are 13 Kangela outlets in Mozambique, with cement and construction materials making up a higher proportion of sales than in South Africa.

Future outlook

Massbuild’s five-year plan includes roll-out of new stores, revamping or relocating others and aligning our brands to service key markets.

There are opportunities for Massbuild to benefit from the experience of Walmart and our staff will look to share knowledge and experience with the world-recognised retailer.

As Massbuild seeks to find innovative ways to meet our customers’ needs, we will look to increase the convenience factor for our contractor customers by offering online catalogue services. Good progress has been made around the development of an e-commerce strategy to provide customers with more choice and advice, a development which will be a first for the hardware sector.

 

READ MORE
More information on the divisional financial
performance can be found in:

LETTER TO STAKEHOLDERS
FINANCIAL DIRECTOR’S REVIEW

 

 
  Grant Pattison Chairman, Llewellyn Walters Chief Executive, Thashmi Doorasamy HR Director, Neville Hatfield Merchandise Director, Guy Hayward Non-executive Director, Chris Lourens Operations Director, Zandile Manana Marketing Director, Alex Rymaszewski Store Development Director, Michael Spivey Non-executive Director, Andre Steyn Builders Express and Builders Trade Depot Director, Chris Tugman IT Director, Simon White Financial Director, Ilan Zwarenstein Non-executive Director