Johannesburg - South African furniture retailer Steinhoff International Holdings switched its primary listing to Frankfurt yesterday, reflecting Europe’s increasing importance to the company.
The stock opened at e5 (R78) and rose to e5.085 at 1.56pm in the German city, giving the company a market value of e19.6 billion. In Johannesburg, where Steinhoff now has a secondary listing, the shares climbed 3.2 percent.
Steinhoff is Europe’s second-largest furniture retailer after IKEA.
Steinhoff moved its primary listing to Frankfurt yesterday with the hope of attracting more investor attention over the long term, while retaining a secondary listing in Johannesburg.
The Frankfurt listing will potentially allow the group to tap markets to continue its aggressive expansion, which helped form a group with almost e20bn in market capitalisation.
“We probably have too much capital at the moment,” Jooste said.
After a period of expansion, the company now gets more than half its sales in Europe, where it has operations in the UK, France and Germany.
Steinhoff has switched its headquarters to Amsterdam from Johannesburg, and its main focus is to expand its brands into territories adjacent to its existing operations, particularly eastern Europe.
“That’s where our focus is lying at the moment, rather than looking at acquisitions,” chief executive Markus Jooste said yesterday.
“We are excited about the new opening (of stores) in England, Portugal, Spain, France. We are opening new stores in Germany all the time and are very aggressively expanding in Poland, Hungary, Czech Republic, Romania and Serbia,” Jooste said.
Strong investment in Europe – where Steinhoff is active with brands like Poco, Conforama or Pepco – would be balanced with large-scale expansion in Africa, so the revenue split would likely remain unchanged over the next three years, he added.
European focus
Steinhoff’s European sales gained 6.4 percent in the 12 months to June.
The Frankfurt listing was a “very emotional moment for the Steinhoff family, coming from Germany, and a high point in the history of the company”, Jooste said.
Jooste said Steinhoff currently had no acquisition plans on the table, following deals in recent months to acquire clothes retailer Pepkor for $5.7bn (R81.74bn) and the shares it did not already own in furniture group JD Group.
Bruno Steinhoff founded the company in 1964 in the German town of Westerstede. In 1997, the Steinhoff family acquired a stake in South African furniture company Gommagomma Holdings and the following year the merged entity listed on Johannesburg’s stock exchange under the name Steinhoff International Holdings. The Johannesburg-traded stock has climbed 33 percent this year.
The Johannesburg-listed stock fell 7.2 percent on Friday after German prosecutors said the firm was being investigated for possible accounting violations.
Steinhoff had not heard what allegations German prosecutors might make, Jooste said. It expected a German tax probe to have no material impact on the group, Jooste said yesterday.
“These things happen from time to time with big corporates,” Jooste said.
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