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Steinhoff’s path to recovery not enough as shares tumble

Reports net loss of $1.3bn in the year through September; shares fall 11%.

Steinhoff International reduced its loss by 70% in the fiscal year ended in September. The step toward a recovery wasn’t enough to stop its shares from falling.

The net loss was 1.2 billion euros ($1.3 billion) during the period, down from 4 billion euros in the previous year. The owner of Conforama in France and Mattress Firm in the US was reporting its second set of full-year audited earnings in as many months following revisions to the company’s finances in the wake of the late-2017 crisis.

Read more on Steinhoff:

Steinhoff report reveals maelstrom of conflicts of interest

Steinhoff reports $4bn operating loss in 2017

Steinhoff’s assets were valued at 16.4 billion euros as of September, compared with 17.5 billion euros the previous year, the company said in a presentation on its website. The retailer had previously made 15.3 billion euros of writedowns because of accounting irregularities, as former management led by ex-chief executive officer Markus Jooste oversaw a series of related-party transactions that inflated profit and asset values.

The stock fell as much as 11% in Frankfurt, the most since May 10, extending losses since the crisis erupted to 97%.

No opinion

In Steinhoff’s financial statement for the year through September 2017, released in early May, auditors at Deloitte made clear that the company’s ability to operate as a going concern was in doubt. That’s because of numerous lawsuits and regulator probes, while a long-awaited debt restructuring has yet to be finalised. The auditors didn’t express an opinion over the 2018 numbers either.

No individual has yet been charged for his or her role in Steinhoff’s near collapse, including Jooste.

Steinhoff faces a string of claims and its legal woes deepened in May when a Frankfurt court received 10 suits to be included in a mass German investor case. That’s on top of 6.2 billion euros of claims highlighted by the group in its 2017 annual report.

“While we still have a long way to go, including resolving the various legal proceedings that have been initiated against the company, progress is being made,” Steinhoff said. “Notwithstanding the significant difficulties the group faced over the period, at operating company level a number of key subsidiaries continued to report solid performances.”

The firm reiterated that sales in the 2019 fiscal year are expected to drop because of asset disposals, more competition and a weak trading environment. Operating expenses will remain under pressure and financing costs will increase, the firm said, adding that it could “experience an adverse impact” on its results.

© 2019 Bloomberg L.P.

 

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NPA clueless. No idea what to do.

Yunus Carriem from the ANC parliaments finance committee -clueless on what to do-Adv. Francois van Zyl SC made a complete joke of his( Carriems ability)

Board of Steinhoff-no idea-clueless!!!

While these results seem horrible, they are so much better than 2017. Kudos to management for taking much of the writedowns in 2017.

Sales grew. Mattress firm secured a new long-term supply arrangement with Tempur-Sealy yesterday which will add $400M to revenue.

Apart from litigation, which won’t have an impact in the next 8-10 years, Conforama remains the big stumbling block.

Management have shown with these resuls that there is a clear plan in place. Not going to be easy and might not be enough tomsave the group, but those saying this group is finished, are simply lazy and don’t actually read the AFS.

If supply (not sales) long-term arrangement was made yesterday, then how do you get to the figure of $400m of revenue to be added (and when will this be)?

The relationship with Tempur Sealy was a long established and successful relationship before it ended a few years ago.

Basically Steve Stagner was forced to resign earlier this year to pave the way for this relationship to resume. That’s how important this deal is! Much more important than the CEO who was at the comoany for over 25 years. Mattress firm is in a really good place now, but results should only show this in 2019/2020 results.

Say what you want about the Americans, when they buckle down stuff gets done. The cleanup at MF is very important for Steinhoff as this unit has been one the many issues for the group. Independent funding has been secured and all loss-making leases have been exited. Ruthless and efficient.

Just google article.

Does this imply that Steinhoff shares have now stabilised making it a buy?

No. Unless you are gambling / trading stay well away. It will drop further.

yes…why would any one want to buy S.shares??

@chev because of the potential upside of 10x your initial investment and a creditor lock up of 3 years, which will ultimately be restructured on softer terms if perfirmance is shown. People invested in Bitcoin, with no track record or cash flows, yet Steinhoff seems like a dumb bet. Okay then.

Why isn’t Marcus Jooste in gaol?

The process is slow

But I do agree that he should at the very least have already had a court appearance and been made to hand in his passport

I sitting and ruminating Heather Sonn was a director of STAR (Steinhoff Africa Retail) but resigned but resigned end July 2018 and took up the position of chair of the supervisory board of Steinhoff International. STAR later changed its name to Pepkor where young Wiese sits as a director. I wonder how good governance is being applied given the Wiese family potential losses as a result of Steinhoff’s collapse

Maybe its time for the Steinhoff’s “legal eagles” to resign and for experienced retailers to run the business.

Why have the Preference Shares (SHFF) not relisted today – I see they remain suspended ????

Another set of results is expected in a month around 12 July, from 4bil loss, to 1.3bil loss, i estimate a 100mil profit on July 12.

May I borrow your crystal ball? Mine is still very murky …

When is KAP collapsing, the creation of Steinhof and its creative accounting. Its balance sheet is also rotten to the core.

Why would its Chemical division CEO sell off shares and resign, he knows something we do not know.

From 8000 to 600 90% gone
From 600 to 140 another 73% gone

Basically a bet whether the liquidators, creditors and bond holders take the 140c from shareholders.

Lesson : stocks can lose 80% from any price – even 10c

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