Steinhoff in a state of (re)flux
The market seems concerned about possible indigestion after the company’s two-year buying spree
That Steinhoff is now the world’s largest bedding retailer appears to have left the market entirely unmoved. The release last week of its interim results to the end of March showed that revenue grew 7% but diluted sustainable EPS dropped 3% to €15.5c. Steinhoff’s shares are trading about 25% weaker since August 8 2016, when the company sprang its US$2.4bn offer for US group Mattress Firm. It has argued that the acquisition will be a game changer in the vein of its two biggest purchases of the past decade: furniture chain Conforama and retail giant Pepkor. The weakness is explained partly by a 15% increase in shares under issue to fund the acquisitions of Mattress Firm and the UK’s Poundland. But the market is clearly worried about impending indigestion after a two-year buying spree that, besides these two companies, included listed building materials outfit Iliad Africa and Austrian furniture group kika-Leiner in 2015, Australian budget chain Fantastic Furniture in 2016, and SA’s Te...
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