Steinhoff profit dips, cashflow up

Johannesburg - Steinhoff reported a 2% dip in interim headline earnings per share but said cashflow from operations jumped threefold as it kept a tight rein on spending in a tough environment.

The furniture maker said headline EPS fell to 117.9c from 120.4c in the six months to end December, while the average operating margin slipped to 9.5% from 9.6% in the year-ago period.

Steinhoff's UK units have struggled as recession-hit consumers rein in spending on big-ticket items such as furniture. Fitch ratings agency cut its outlook on Steinhoff to negative from stable, citing a sharp consumer downturn in its markets.

But the company said net cashflow from operating activities increased threefold to R1.4bn while its gearing stood at 39% compared to 38% at the end of June.

Steinhoff, which operates in southern Africa, Europe and the Pacific Rim, said revenue rose 26% to R25.9bn and said it expected trading conditions to remain "challenging" in the second half.

Steinhoff shares fell 4% to R10.77 by 15:17, lagging a slightly weaker Johannesburg Top-40 index of blue-chip stocks.

Headline EPS is the key profit gauge in South Africa and strips out certain one-off, financial and non-trading items.

- Reuters