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Steinhoff operating profit jumps 32%

Aug 31 2016 11:51
Carin Smith


Company Data

Steinhoff International Holdings NV [JSE:SNH]

Last traded 1
Change 0
% Change 1
Cumulative volume 15176198
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town - Retailer Steinhoff [JSE:SHF] reported a 33% increase in revenue to €13.1bn for the 12 months ended June 30 2016, it announced in an unaudited trading update on Wednesday.

Operating profit improved by 32% to €1.5bn (about R24bn) and group operating margin at 11.3% was similar to the comparative period. It said this is notwithstanding the lower margins inherent in the general merchandise category acquired in March 2015, the group reported.

During the period covered by the trading update, Steinhoff International Holdings commenced trading on the Frankfurt Stock Exchange. The group pointed out that the devaluation of the rand by 17% had an unfavourable impact on reported euro results.

According to Steinhoff, its positioning as an integrated value and discount retailer remains relevant and underscored a solid set of results amidst volatile markets and currencies over this period.

The group's segmental revenue contribution over the period was 64% from household goods, 9% from its automotive dealerships and car rental outlets in southern Africa and 27% from general merchandise like clothing, footwear, accessories and homeware.

Its diverse range of retail brands and products includes furniture, appliances, clothing, cellular products and selected financial services.

Steinhoff indicated that its European business has played a big role in the increase in operating profit.

READ: Steinhoff market value can double in 5 years

Its household goods store network Conforama has continued expansion across Europe to a total of 286 stores, while Poco opened five new stores in Germany to increase its total number of stores in Europe to 114.

As for its general merchandise operations, during this period the Pepkor group opened more than 600 new stores. In eastern Europe Pepco expanded with 244 new stores, while more than 290 stores were opened in Africa, including an entry into the Ugandan market. In South Africa Ackermans celebrated 100 years with the opening of its 500th store, located in Cape Town.

In the UK GMH! (Guess How Much!) – the group's second strategic retail investment in the UK - started trading in Sheffield during the period under review.

In South Africa the consolidation of JD Group's furniture retail brands is being implemented, Steinhoff said in the trade update. The aim is to transfer brand value into four brands and launch new-look stores.

The group has also gained board recommendations and awaits shareholder recommendations on the formal offer to buy the Poundland retail business in the UK and the Mattress Firm retail business in the US.

"The 12 months under review has been a busy period in terms of corporate activity. During the period many transactions that complement the value and discount strategic underpin of the group were investigated," concluded Steinhoff.

ALSO READ: Steinhoff will pay cash if it goes for Poundland

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