Steinhoff’s loss widens as Covid impacts sales


Steinhoff’s loss widens as Covid impacts sales

Published Date: 2020-07-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

Steinhoff’s loss widens as Covid impacts sales

The retail group says the financial cost of its restructuring also continues to be substantial as it seeks to settle lawsuits.

Steinhoff International says sales held up until the escalation of the Covid-19 pandemic at the end of March, when it was forced to close stores, its central office and many of its warehouses due to trading restrictions across its global operations. While that weighed on first-half sales, the financial cost of its restructuring process also continued to be substantial, resulting in a bigger loss for the beleaguered retail group.

Sales from continuing operations rose 1% to €6.24 billion for the six months to end-March, led by a 10% improvement at Pepco Group, a 3% rise at Pepkor Africa and gains of 15% and 6% at Mattress World and Fantastic Furniture respectively. On a pro forma basis, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 7% to €365 million. Finance costs for the six months amounted to €698 million as its net debt increased to €9.7 billion, from €9.6 in September. It paid €58 million in advisory fees. Its loss for the period widened to €1.52 billion from €571 million previously, while its loss per share from continuing operations swelled to 34.7 euro cents from 8.5c.

Steinhoff said after the majority of its stores were closed in April, some were reopened in May as restrictions were eased. Almost all of its stores were trading again in June.

Earlier this month, the group sold its Conforama France business including 18 properties to Mobilux, the parent company of rival furniture, appliances and consumer electronics retailer BUT, for €500 million. It also reached a deal to dispose of Conforama Suisse to a Swiss group of private equity investors for an agreed price of eight times EBITDA. The proceeds will be used to reduce debt at Conforama Holdings.

On Monday, the group proposed a R16.5 billion settlement with those who are trying to sue for the accounting fraud that brought the retail group to its knees in December 2017.

Its shares fell 2% to 98c yesterday.

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