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Building materials retailer Cashbuild (CSB) has reported that revenue for the first quarter of the 2006 financial year has seen the positive trend experienced during the 4th quarter of 2005 continue, with an increase of 43% compared to the same quarter of last year.
 
Stores in existence since the beginning of July 2004 (pre-existing stores) contributed 33% of the increase, it said, while stores that were opened since the end of the 2004 financial year (new stores), added 10%.
 
Transactions through the tills increased by 32% and the number of units sold for the quarter increased by 38% in comparison to the prior period.
 
"The increase in sales are still as a result of Cashbuild's initiatives to grow the top line. These initiatives were only put in place after the first quarter of the 2005 financial year. The continued macro economic environment, consumer confidence and the strong property culture throughout southern Africa also impacted favourably on the revenue growth," the company said in a trading update.
 
Gross margins for the quarter were under slight pressure mainly due to mix changes as well as one specific incident relating to shrinkage that was experienced during the quarter. "Management has acted to address this issue and to prevent similar reoccurrences."
 
During the prior year, Cashbuild embarked on a strategy to invest in the business in order to step up and support the future growth of the company. This strategy has resulted in operational costs for the quarter increasing in the region of 38% (compared to the same quarter last year), the company said.
 
Looking ahead, Cashbuild said that turnover growth during October remained at good levels and expectations for the Christmas trading period were positive.
 
"As the Christmas trading period materially affects the results for the first half of the financial year no earnings expectations are provided at this stage."