Cashbuild, SA’s largest retailer of building materials, has more than doubled its interim profit and is continuing its expansion as Covid-19 drives impressive growth in demand for home improvement.

The group upped its interim dividend for the period ending December 27 by two thirds to R7.24 a share, a R181m payout, with group profit more than doubling to R364.2m.

Cash also more than doubled to R2.82bn, with Cashbuild citing strict cost management as a driver of improved profitability, though its cash balance was partly due to the timing of payment to suppliers.

Cashbuild, along with industry peers including Italtile, have reported robust demand for home improvement during 2020, when Covid-19 kept people at home, even as interest rates plummeted.

Group revenue rose 21% to R6.69bn, with new stores contributing 2 percentage points of this increase.

Cashbuild had 317 stores at the end of December, located across Southern Africa, up 14 year on year. During its half year, Cashbuild opened three new stores, refurbished 12, and relocated three.

Cashbuild said on Tuesday it would continue its store expansion, relocation and refurbishment strategy, but “in a controlled manner, applying an even more rigorous process, due to the Covid-19 pandemic and associated economic uncertainties.”

The group is in the midst of an acquisition that could almost double its revenue, saying in August it had agreed to buy Pepkor’s The Building Company (TBC) for almost R1.1bn — a move it says will improve its retail presence in SA’s coastal regions.

Cashbuild said the acquisition would help the group tap into SA’s middle to high-income customer segment, particularly in KwaZulu-Natal, the Western Cape and the Eastern Cape.

Group sales for the six weeks after period end increased 24%.