Steinhoff share price not spared from the general investor panic

The Steinhoff share price wasn’t spared from the general investor panic that has wiped out share prices across the board, although its results weren’t too shoddy.

On Monday, after announcing a 7% advance in revenue, the Steinhoff share ended the day 11.4% lower at 88c, which is just 9c off its all-time low of 79c.

There was nothing unexpected in the results for the three months to end-December, as Pepco Group and Pepkor Africa continued to be the main drivers of Steinhoff’s performance. The central and eastern European retail discounting operations of Pepco hiked revenue an impressive 25%, but the UK and Ireland operations – under brand names Poundland and Dealz – turned in a more tepid 6% increase. “Pepco Group’s ambition is to be the largest discount variety retailer in Europe,” said management. In constant currency terms the combined increased of the European discount operations was 13% to €1.1 billion.

At French furniture and white goods retailer Conforama, revenue edged up a marginal 1% to €805 million. Clothing and general merchandiser Pepkor Africa grew sales by 8% in constant currency terms to R1.3 billion.

The US-based Mattress Firm business managed a 12% increase in revenue to €697 million, despite trading from a significantly smaller stores base following the implementation of Chapter 11 proceedings.

The management board assured shareholders that despite the relatively few statements issued since August 2019, there has been no slackening of the restructuring effort following implementation of the financial restructure last year. “We have maintained our momentum, with significant endeavours continuing across the group.” It is continuing its efforts to stabilise the group and enhance the growth prospects of its core investments.

The management board says it is continuing to work towards a resolution of outstanding legal claims against it while also evaluating potential claims against third parties. It provides no details about any of the extensive range of legal actions in which it is involved.

In South Africa alone nine litigants have lodged claims of over R80 billion.

A large chunk of this, over R50 billion relates to claims by former chairman and controlling shareholder Christo Wiese. In addition, the Public Investment Corporation and GT Ferreira have put in substantial claims.

Earlier this year the Cape Town High Court heard the local litigants explain why they were opposed to Steinhoff’s attempt to consolidate all of the local cases. They contend it is an opportunistic attempt to delay hearing the substance of their claims.

The management board also made no specific reference to action initiated against former CEO Markus Jooste and CFO Ben La Grange to claw back remuneration and bonuses paid over several years. Its only comment was that, “Recoveries against implicated entities and individuals are being initiated where appropriate.”