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Steinhoff on brink of dropping off JSE's top 100 company list

Dec 21 2017 13:21
Jan Cronje

Cape Town - Shares in embattled SA-headquartered global furniture retailer Steinhoff decreased to under R4 a share in morning trade on Thursday, some 91% down from what they were worth two weeks ago. 

The global retail conglomerate now risks dropping off the list of the top 100 biggest JSE companies by market capitalisation.

Steinhoff’s [JSE:SNH] share price opened Thursday at R4.20 and fell to a low R3.75, before recovering somewhat to trade at R4.00 at 11:25.

This puts Steinhoff’s market capitalisation at just R17.15bn. 

Once in the top 10 of the JSE by market cap, Steinhoff is now at around #85. 

According to Fin24 calculations, if its share price were to dip below R2.80 a share, it would likely exit the top 100 list, depending on the fluctuations of other companies. 

In 2015 Steinhoff's former chair and billlionaire Christo Wiese made history when he was named both the Sunday Times Top 100 Business Leader of the Year and received the Lifetime Achiever Award.

The annual Sunday Times Top 100 Companies Awards are based on those JSE listed companies that achieved the highest shareholder returns on a R10 000 investment over the previous five years.

However, an accounting scandal reduced the company that was built over five decades to an near penny stock in a matter of days.

Some of the SA stores under Steinhoff's umbrella are Ackermans, Pep, Tekkie Town, Russells, HiFi Corp, Incredible Connection and Hertz car rental, among others.

It also owns pan-European furniture retailer Conforama, Mattress Firm in the US, and German discount furniture and household retailer Poco among about 30 other brands. 

From R46.25 to R4.00

On December 5, before its share price started to nosedive, Steinhoff was trading at around R46.25 a share. At the time, it had a market capitalisation of about R199.3bn. 

This means that in two weeks some R181.75bn worth of value has been lost.  

The firm’s share price started its fall after it announced that it had red-flagged “accounting irregularities requiring further investigation” in its books, and retained PwC to conduct an independent investigation. 

The quick resignation of its CEO Markus Jooste, and later of its board chairperson Christo Wiese have not yet been able to stop the decline.

Its 2017 audited results have now been delayed, and it has said its 2016 results cannot be relied upon either.

The PwC investigation is ongoing, and Steinhoff has been meeting with lenders with week to try and convince them its fundamentals were still sound.

The company said in an investor update on Thursday that the decision of a Dutch court, related to a legal case with a former joint venture partner, was only anticipated to be issued in late January. 

The decision was set to be published on Friday. 

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