STEINHOFF’S revenue from continuing operations increased by 10 percent for the three months to end-December, 2021 despite the reintroduction of Covid-19 restrictions in Eastern Europe, the global retailer said in a trading update on Friday.
The group is in the midst of paying out a global settlement offer to claimants after an accounting fraud allegedly involving former executives in 2017, and is gearing up for the third phase of the group’s rehabilitation: that of strengthening its balance sheet.
Group revenue increased to 2020 €2.82 billion (R48.1bn) in the quarter compared with €2.58bn at the same time a year before.
The company which has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE said the lockdown regulations fluctuated in countries independently from one another, resulting in unusual trading patterns as restrictions were imposed or lifted.
However, “operating performance, when reviewed over a longer period, and taking into account the various specific restrictions has continued to improve,” the company said.
While the overall number of stores closed was 1 percent, many more were disrupted by restrictions that lowered footfall, Steinhoff management said.
According to Steinhoff, its African subsidiary Pepkor Holdings increased revenue by 7 percent to €1.29bn.
“The Pepkor Holdings group is pleased to have achieved sales growth of 10.9 percent in constant currency.”
“This demonstrates Pepkor Holdings’s ability to achieve strong and consistent sales growth despite volatile trading conditions,” the company said.
Store expansion accelerated across all operating territories and brands as it opened 161 new stores.
The group also announced it had started distributing about €1.7bn in cash payments and shares in Pepkor Holdings per its global settlement proposal. The company said it hoped to focus on the next and last step of its strategy.
“With the first two elements of the three-step strategy – a financial restructuring and a litigation settlement – now completed, the group can fully focus on the third step, addressing the debt and the sustainability of the balance sheet,” it said.
Steinhoff will not make payments directly into claimants’ bank accounts – an independent group called the Steinhoff Recovery Foundation was created to manage the distribution of funds.
“A small number of final steps of implementation will be finalised in the next weeks,” the company said.
In January, Steinhoff secured the approval of the Western Cape High Court for a global settlement of about R25bn, following protracted legal disputes as Steinhoff faced claims of around R180bn.
Last week, Steinhoff’s former chairperson Christo Wiese received cash and a Pepkor stake worth more than R7bn as part of his settlement from Steinhoff. In 2019, Wiese had launched a R60bn claim against Steinhoff for his losses.
Wiese owned 52 percent of Pepkor before exchanging it for a stake of 20 percent in Steinhoff in 2014, when he sold Pepkor to the group. His shares in Steinhoff lost more than 95 percent of their value after the accounting fraud was uncovered. He has since sold his entire holding in the company.
BUSINESS REPORT ONLINE