Shares in Kap Industrial, which counted Steinhoff as a major investor until March, have fallen to their worst level in about four years after the group warned of a decline in earnings in the year to end-June.
Kap, which owns industrial, chemical and logistics businesses, said last week that headline earnings per share (HEPS) for the full year would be at least 20% down from a year before.
Ignoring charges of R196m relating to a BEE transaction, HEPS would fall by at least 7.9%.
“Operational execution remains sound with significant progress made during the year in key areas,” Kap said at the time. Its annual results are due on 20 August.
However, the progress has failed to arrest a sell-off that started on January 29. Since then, Kap’s shares have fallen by more than a third, from R8.78 to R5.48.
On Monday, the stock touched a low of R5.40, a level last seen in June 2015, according to Iress data. The stock has fallen by about a fifth since the start of June alone.
The stock has been under pressure due to the company’s struggles in a weak SA economy, and Steinhoff’s sell-down of its stake in the firm.
In March, Steinhoff sold its remaining 26% stake in Kap to local and foreign institutions as part of its efforts to raise funding. The stock was sold at a discount of 9.4%.
Steinhoff, which is still reeling from an accounting scandal, held just more than 60% of Kap until the transfer of its primary listing to Frankfurt in 2014, when it reduced the holding to 45%.