JOHANNESBURG - Steinhoff International’s share price surged by 54.7percent on the JSE yesterday morning to its highest peak in more than two months, with the industry analyst attributing the rise to the expected payment of a preference share dividend next month.
The stock climbed to R2.12 a share yesterday morning, up from Monday’s closing price of R1.37 a share. It closed at R1.80 on the JSE yesterday. Ron Klipin, a senior analyst at Cratos Capital, said the payment of the preference dividend was a sign of confidence by the group.
Half-year results
Last week, Steinhoff released unaudited half-year results in which the board declared a gross dividend of 427.42cents a preference share in respect of the preference dividend, payable on July 23, to those holders of preference shares recorded in the books of the company at the close of business on July 20.
The group said that the preference dividend would be payable in the currency of South Africa and will be subject to a local dividend tax rate of 20percent.
“This will result in a net dividend of 341.93c a preference share, unless the preference shareholder is exempt from dividend tax or is entitled to a reduced rate in terms of an applicable double-tax agreement,” the group said. It said at the date of declaration that there were 15million preference shares in issue.
Klipin added that in addition to this positive aspect of preference share dividend, the debt restructure standstill into late July could give a company some breathing space to conclude potential asset sales.
“Also, there are some talks of private equity interest in acquiring a stake in Steinhoff International was a positive driver of the share price,” Klipin added.
Last month, Steinhoff announced that it had sold its Austrian loss-making subsidiary Kika/Leiner’s operating companies and property holding companies to Signa Holding.
The group said the consideration for the property holding companies was based on an enterprise value of about 490million (R7.87billion), which was subject to agreed balance sheet adjustments.
The group said the sale of the operating companies was conditional upon merger clearance being received from competition authorities in Austria, the Czech Republic and Slovakia on or before September 30.
In the unaudited results for the six months to the end of March, Steinhoff reported a 6percent decline in revenue to 9.35bn, down from 9.90bn compared with last year.
Gross profit declined by 10percent to 3.65bn, from 4.07bn.
Operating loss escalated to 381m compared with the loss of 168m, while the loss attributable to ordinary shareholders was 63percent higher at 621m compared with a loss of 380m that was reported last year.