Steinhoff International Holdings share price on the JSE on Friday closed 2.1 percent higher at R2.38, after the group reported that the gradual easing of global lockdown restrictions had boosted its revenue.
In a trading update, on Friday, the global retailer reported a 15 percent increase in revenue to €6.81 billion (R118bn) in the first nine months of the 2021 financial year, up from €5.9bn in the same period, last year.
The group said all operations performed well in the third quarter, while results in the comparative quarter reflected a period when significant lockdown restrictions were in force.
Revenue rose by 16 percent to €3.03bn for Steinhoff’s Pepco Group in Europe as customer restrictions were progressively eased, following 18.4 percent total trading weeks lost.
Steinhoff’s US-based Mattress Firm recorded a 29 percent increase in revenue to €2.63bn despite a 3.7 percent reduction in the store base year-on-year and store closures due to Covid-19.
The group’s JSE-listed Pepkor Afrika saw revenue increasing by 12 percent to €3bn in spite of volatile third quarter trading which moderated in April, followed by strong trading in May and a return to more subdued trading in June.
Steinhoff chief executive Louis du Preez said Pepkor continued to expect a constrained retail environment going forward.
Du Preez, said this was as a result of the longer-term impact of Covid-19 on the South African economy, further exacerbated by the recent civil unrest, that resulted in damage to 10 percent of Pepkor’s store base, such as PEP, Ackermans and Russells.
“Recovery plans have been formulated and implementation has commenced,” Du Preez said.
“The pace at which stores will be reopened is dependent on factors such as access to materials and equipment for store refitment purposes and the ability of property owners to restore premises which suffered extensive damage.”
Earlier this month, Steinhoff obtained confirmation that the necessary approvals had been granted by the financial creditors to extend the maturity date of the group’s debt by 12 months, until December 31, 2022.
The group also proposed making an additional €457 million payment for investors who suffered losses due to its accounting scandal of 2017 in its ongoing litigation with active claimant group, Hamilton.
On Friday, Steinhoff said the increased and adjusted settlement proposal can resolve both the legacy claims and recent disputes relating to the settlement process itself.
Absa Asset management’s equity analyst Carmen Mpelwane said Steinhoff’s positive results had come on the back of a significant rally, two weeks ago, when the retailer announced it was going to increase their offering to shareholders.
“A lot of the trading update was centred around the fact that they are hoping to get a conclusion on that, most likely, in the first week of September, both on the international side and on the local side,” Mpelwane said.
“Another positive for them was that they managed to extend the maturity of their debt, which gives them some breathing room as well.”
BUSINESS REPORT ONLINE