Steinhoff Investment Holdings (Steinhoff) received a R8.6 billion settlement and R6.9bn Pepkor Holdings shares in the global litigation settlement by its parent company Steinhoff International Holdings.
This was disclosed in Steinhoff Investment Holdings’ results for the six months to March 31, which also showed operating profit from continuing operations (EBIT), after other material expenses, improved 221 percent to R17.2bn.
Revenue from continuing operations, comprising Pepkor Holdings only, increased 3.3 percent to R42bn. Operating profit from continuing operations, before other expenses, increased by 15.6 percent to R5.2bn.
The de-recognition of the Steinhoff Investments CPU (contingent payment undertaking) and recognition and remeasurement of the S155 Settlement Note resulted in a net gain of R17.5bn.
Headline earnings per share improved to 26 636.31 cents from 4 890.90 cents.
A dividend of 293.55308 cents per preference share was paid on April 25, 2022.
The Steinhoff International Holdings subsidiary is the issuer of variable rate, preference shares with a capital value of R1.5bn, which are listed on the JSE.
Steinhoff Investments said Pepkor Holding’s defensive business model and position in the South African discount and value sectors continued to drive growth, and underpinned resilient performance in a challenging operating environment.
Pepkor’s revenue growth was muted, impacted by a high base and a product mix change in the Flash business, but this did, however, strengthen during the second quarter.
On a two-year comparable basis Pepkor achieved “exceptional sales growth” of 15.4 percent, underpinned by “substantial market share gains across various product categories”, Steinhoff said.
Strong trading was expected by Pepkor during the second half of the year, supported by a lower base in the comparable period, which had been affected by the civil unrest.
Trading in April 2022 was strong across most businesses, with softer trading in May. Pepkor’s plans to open more than 300 stores in the 2022 financial year remained on track.
To date, Pepkor has reopened 479 (87 percent) of the 549 stores looted and damaged in the KwaZulu-Natal and Gauteng civil unrest.
The final Sasria claim for material damage was revised to R1bn and an interim payment of R500m was received and accounted for in the 2021 results.
The business interruption claim was revised to about R440m, with an interim payment of R171m received in the 2021 results.
A business interruption claim payment of R132m was received in April and accounted for in the interim period. Final insurance payments were expected during the rest of the year.