Johannesburg - Retailer Steinhoff International delivered a solid set of quarterly results to March.
“Steinhoff’s positioning as an integrated value and discount retailer remains relevant in the current consumer environment, and this underscored a solid set of results,” chief executive Markus Jooste said yesterday.
Read: Steinhoff folds in Darty auction
In the quarter, Steinhoff walked away from two big corporate deals. UK’s Home Retail group was later seen not to be an appropriate investment for the group. It scuttled the proposed acquisition of European electronics retailer, Darty, as the competitive bidding process eroded the potential value this transaction could have delivered to Steinhoff.
Steinhoff, with local brands such as Hardware Warehouse, Hi-Fi Corporation, Incredible Connection, JD Furniture and Timbercity, lifted its operating profit for the quarter by 46 percent to e1.1 billion (R19.5bn), up from e748 million reported in the same quarter last year. The revenue was also up 45.3 percent to e9.93bn.
African business
The European business accounts for 77 percent of the business and it lifted its revenue by 15 percent in the period to e4.96bn. Included in the figure is an amount of e311m of revenue derived from the acquisition of Kika-Leiner business that retails in Austria and central Europe.
The African business reported a decline in its revenue by 15.8 percent to e631m. The company said this reflected the weakness of the rand as measured with the euro. UK and Australasia lifted revenue by 14.1 percent to e844m. In April the group issued a seven-and-a-half-year euro-dominated convertible bond (2023 bond) to raise an amount of e1.1bn before expenses.
The bond pays fixed interest at a rate of 1.25 percent a year, semi-annually in arrears and is convertible into 141.8 million ordinary shares in Steinhoff at a conversion price of e7.76 a share.
The group said net debt increased to e2.9bn compared to e2.2bn reported in December, reflecting the investment in the growing store network and the finalisation of the Iliad acquisition.
Independent analyst Ian Cruickshanks said: “The group has many divisions which consist of broader array of goods. I would wait for a year before I can say the group is going to deliver goods results in the future. But judging from what I see the results look positive.”
Steinhoff shares yesterday fell 1.8 percent to R92.23.
BUSINESS REPORT