Cape Town - Industrial conglomerate Steinhoff International smashed through the R50bn sales mark after a strong showing from its international operations - particularly those in Europe.
Year to end-June results released on Tuesday showed Steinhoff - which owns furniture manufacturing, specialist retail, logistics and automotive operations - boosting international sales by a vibrant 28% to R31.5bn.
By contrast, sales from SA-based operations, hampered by a weak performance from Steinhoff's automotive division, dipped 5% to R19.3bn.
Overall sales were up 13% to R50.9bn, with bottom line profits coming in 6% higher at R3.6bn.
Steinhoff CEO Markus Jooste said continental European retail operations benefited from dominant large-scale formats that offered a wide range of furniture and household goods at discounted prices.
He said like-for-like sales growth was in double digits.
Jooste said the discounted retail operations - especially in central European markets such as Germany and Switzerland - scored as consumers traded down.
He said European manufacturing operations took advantage of industry rationalisation and increased productivity - although there was some deflationary short-term pressure on selling prices.
A full breakdown of Steinhoff's geographic revenue spread showed Europe generating R19bn (37% of total sales), SA R19.3bn (38%), the UK R9.4bn (19%) and the Pacific Rim R3bn (7%).
Logistics a star performer
Last year sales from SA markets accounted for 45% of total turnover, while Europe contributed 29%.
The breakdown at operating profit level - up 12% to R6.1bn - showed household goods and building supplies hiking profits 43% to R1.4bn, while profits from the manufacturing of household goods division shifted up 175% to R2.56bn.
The star performer was the logistics division - incorporating Unitrans (formerly listed on the JSE), which managed a 47% surge in profits to R676m off a 16% increase in turnover to R5.8bn.
Steinhoff's weak spot was its automotive division, which saw revenue down 18% to R10.2bn and profits crunched down 42% to R283m.
Despite the profit stall at the automotive division, Steinhoff managed to hold its group trading margin above 10%.
Operational cash flow was also reassuring, with cash generated by operations coming in over R3.9bn, while gearing looks manageable at 35%.
There was a cautious air in Steinhoff's decision to peg its dividend at last year's level of 60c per share, covered about 4.3 times by basic earnings of 256 cents per share.
Looking ahead, Jooste said trading for the first two months of the new financial year was encouraging.
He said Steinhoff was seeing signs of a recovery which was beginning to have an impact on consumer confidence and spending patterns, especially in the market segments where the company operated.
- Fin24.com