Steinhoff upbeat about better trading conditions

Steinhoff International, the embattled global retailer which still faces the threat of liquidation, says its encouraged by improving trading conditions as the threat of Covid-19 broadly recedes.

Group revenue from continuing operations grew 15% to €6.8bn (R119bn) in the nine months to end-June, with the group saying there was momentum during the period for greater freedom of trade for its businesses. Steinhoff added that the resilience of its assets, including Pepkor, has provided it room it to increase the settlement offer to shareholders who maintain they were misled by dodgy books.

The beleaguered global furniture retailer increased its global settlement offer to €1.426bn in August, which up from an original €943m offer made in July 2020.

Steinhoff holds 79% of pan-European variety discount retailer Pepco, trading from over 3,200 stores in 16 countries, and which saw revenue grow 16% to €3bn to end-June.

Pepco owns the Pepco and Dealz brands in mainland Europe and the Poundland brand in the UK.

Pepkor Africa saw its revenue grow 12% to €3bn, with furniture, appliances and electronics segmental revenue for the nine-month period increasing 22%, and 51% for the third quarter.

Pepkor, however, had about 10% of its store base hit during riots in July, but Steinhoff added that it had the necessary insurance to mitigate losses.

Steinhoff holds 68% of Pepkor, which has the largest retail store footprint in Southern Africa, with more than 5,000 stores operating across 10 African countries.

Steinhoff faces more than 100 legal claims totalling R130bn by shareholders who maintain they were duped into buying a worthless stock through misleading information about the company’s health.

To settle with litigants, Steinhoff proposed an offer that includes 50% Pepkor stock and 50% cash. It argues that meeting all claims will force it into bankruptcy, leaving litigants penniless, so claimants should vote in favour of the settlement offer.

Certain claimants will meet to vote on September 6 on the group’s settlement plan. Steinhoff has proposed paying different classes of claimants different amounts.

gernetzkyk@businesslive.co.za