Steinhoff International proves resilient in face of Covid-19
The cash position is better than expected but store closures have depressed revenue
Steinhoff International, whose businesses included Poundland in the UK and Pepco, says revenues have been trending back to pre-Covid-19 levels since May, and its cash position was better than it expected.
As a result of store closures, however, the group reported a decrease in revenue from continuing operations of 6% to €6.76bn (about R132bn) in its nine months to end-June.
Pepkor Africa Group’s revenue for the period fell 10% to €2.96bn, or 2% in constant-currency terms. It is estimated that the national lockdown period resulted in lost revenue of €285m for Pepkor Africa, the group said, though sales levels for Pep and Ackermans were positive during May and June after stores reopened.
“Trading was resilient due to the defensive discount and value market positioning, with consumers prioritising apparel spending in areas such as babies’ and children’s clothing and focusing on basic and replenishment products,” the group said.
The full effect of Covid-19 on the performance of the group for the 2020 financial year remains uncertain, Steinhoff said in a trading update.
Steinhoff has been selling off assets and is battling for survival after uncovering a €6.5bn hole in its accounts in late 2017. This caused a share collapse and multiple lawsuits from former business partners and aggrieved shareholders.
Crucial reports which contain detailed information about how the fraud took place and who is responsible are still not publicly available.
For at least a decade, it is alleged, executives and managers led by former CEO Markus Jooste engaged in self-dealing transactions to enrich themselves at the expense of the company. They covered their tracks by lying about the company’s profits.
Steinhoff’s shares were down 1.03% to 96c at the JSE’s close on Friday. They reached a record high of R97 in March 2016 and were priced at about R55 when the accounting scandal broke.
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