DURBAN - Steinhoff Investment Holdings profits tumbled from a R2.6billion profit last year to a R12.85bn loss for the six months to end March on provisions the group made for a litigation settlement proposal of R9.4bn to its creditors.
The group said it raised a R4.8bn foreign currency loss on its holding company, Steinhoff International, as a result of the change in the rand/euro exchange rate during the reporting period.
Steinhoff International is facing litigation charges after it admitted to accounting irregularities in December 2017 which led to a more than 90percent decline in its share price and approximately R200bn loss in market capitalisation.
Steinhoff Investment Holdings reported a R10.5bn loss from continuing operations after other material expenses compared to a R4.1bn profit last year. However, revenue from continuing operations increased 6.5percent to R37.6bn and the group reported a headline loss of 23716.3cents a share compared to headline earnings per share of 2481.8c reported a year earlier.
The board declared a gross dividend of 416.91c per preference share and it was paid at the end of March.
The group said its performance was mixed in a difficult retail environment where spending was hamstrung by low consumer confidence, high levels of unemployment, load shedding and low economic growth.
The spread of the Covid-19 across the globe has made trading difficult for the retailer.
Pepkor Holdings (Pepkor Africa), which consists of 100percent of the turnover of Steinhoff Investments and 82percent of its total assets, reported a 6percent growth in revenue in the six months to end March.
However, its total revenue fell 1.5percent in the nine months to end June after it took a R5bn hit on revenue in April.
The group said it expected trading to remain volatile and consumer spending continues to be constrained.
“In addition, the impact of the Covid-19 pandemic and related store closures and other trading restrictions are having a negative impact on revenue and profitability,” the group said. “Very strong trade was achieved during May and June as lockdown measures eased, and this can be attributed to pent-up demand and social grant payments, as well as the value proposition and market positioning of Pepkor Africa.”
The group said Pepkor Africa was well-positioned to gain market share in the post-Covid-19 "new economy" with its defensive discount and value positioning being more resilient through its focus on babies’ and children’s clothing and large contribution of basic and replenishment products.
Steinhoff Investment Holdings shares rose 2.35percent on the JSE yesterday to close at R0.87.
BUSINESS REPORT