Steinhoff Financial Recovery Boosted by Quarterly Sales Gain

JOHANNESBURG (Capital Markets in Africa) – Steinhoff International Holdings NV said it’s on track to publish audited financial results and is entering the final stages of a debt restructuring as first-quarter sales rose 3 percent.

The South African retailer, which almost collapsed amid an accounting scandal in late 2017, has sold assets and held extensive talks with lenders as it battles to stay afloat. The owner of Conforama in France and Mattress Firm in the U.S. is now entering the final furlong of its recovery plan, and expects to report two years’ worth of earnings on April 18.

“Good progress was made on critical matters despite challenging times,” Chief Executive Officer Louis du Preez said in a statement. “The liquidity constraints and loss of confidence resulting from the discovery of the alleged accounting irregularities continued to have an impact on operations.”

Steinhoff shares crashed after the scandal erupted, and remain more than 95 percent below pre-crisis levels.

Hanging over the firm is a long-awaited report into its financials by auditors at PwC, who are expected to reveal details of inflated profits and off-balance-sheet transactions. That’s due to be delivered to the board in mid-March. Legal actions against Steinhoff have intensified, and a number of initial defences have been filed, the retailer said. The company is being investigated by regulators and law authorities around the world and is being sued by a Dutch investor group and former Chairman Christo Wiese, among others.

Unaudited sales for the three months through December were 4.7 billion euros ($5.4 billion), with Pepkor Europe the standout performer with a 15 percent gain. Conforama revenue declined by 3 percent. On Wednesday, French news service BFM said Steinhoff is looking to sell the division with more than 300 stores across Europe.

 Source: Bloomberg Business News