South African retailer Steinhoff, trying to recover from a $7 billion accounting fraud, on Thursday said its sales increased by 4% in the nine months to June 30 thanks to a strong showing from its Pepkor Europe and Pepkor Africa businesses.
The company has been restructuring after it revealed the accounting problems in December 2017, which shocked investors and wiped out more than R200 billion of shareholder equity.
Earlier this month, Steinhoff, in its first presentation to investors since the scandal broke, said the group’s best hope for survival was to slim down into a retail-focused holding company.
On Thursday, the company said this would give it a well-diversified exposure to a number of strong local brands.
Steinhoff’s net sales from continuing operations for the nine-month period stood at 10.1 billion euros ($11.26 billion) a 4% increase driven by 13% sales growth at Pepkor Europe and 3% growth at Pepkor Africa.
“Encouragingly, customer confidence in our offering has continued to stabilise,” Steinhoff said, adding that its operational performance continued to reflect difficult trading conditions and the impact of the accounting scandal.
Established more than 50 years ago, the company transformed itself from a small South African business to a furniture and household goods retailer straddling four continents before its dramatic fall from grace.
Revenues were flat at two of the company’s businesses – Mattress Firm in the United States and French furniture retail division Conforama.
The company’s debt stood at 9.09 billion euros during the period and a number of lawsuits against the company continue to pose a challenge, Steinhoff said.
Steinhoff said all options would be considered as part of its debt reduction strategy, adding it would continue to keep the ownership of its well-performing businesses under review.
The company’s shares were up 1.68% at 0838 GMT.