Weak rand boosts Steinhoff's profits

Johannesburg - Furniture retailer [JSE:SHF] on Tuesday reported a 25% increase in earnings, bolstered by rand weakness against the euro and a rise in group revenue.

, which runs furniture stores such as Britain's Harveys and Conforama in , said headline earnings per share for the year to end June totaled 394.8 cents, compared to 315.4 cents the year before.

Headline earnings, the main profit measure in , exclude certain one-time items.

"The group's reporting currency (rand) weakened 10% against the euro during the year," the company said. This boosts the size of its earnings when they are converted to the rand.

This can be a double-edged sword as the rand, a highly liquid emerging market currency, is prone to major swings and said "the volatility of the rand exchange rate will continue to influence the group's reported earnings".

Sales climbed 44% to R115.5bn, with business in making up the bulk of its revenue.

Turnover in - where retail growth has been surging - doubled to over R47bn but the group said it needed to contain costs on the continent and improve efficiencies to maintain margins.

Shares of were up 3.50% at R31.30 by 15:55, outpacing the 1.50% rise in the index.