Furniture retailer Steinhoff sees massive growth

South African furniture group Steinhoff International on Tuesday reported a 36% rise in headline earnings for the year, supported by cost-savings and growth in the discount retail market.

Steinhoff, which bought clothing retailer Pepkor last year in a $5,7-billion deal, increased headline earnings to R12,4-billion ($897,80-million) in the year ended June 2015, while revenue rose 15% to R135-billion.

The company’s shares were up more than 4% by Tuesday 08 September.

Steinhoff makes its furniture mostly in developing countries and sells it to value-conscious consumers in Europe. It has been seeking to list in Europe where it makes the bulk of its profits and has said it will seek a listing in Frankfurt.

The group has also bought furniture retailer JD Group, delisting it from the Johannesburg Securities Exchange, and announced it plans to do the same with home improvement retailer Iliad Africa.

Diluted headline earnings per share totalled 420,1 cents in the year to the end of June, compared with 416,7 cents a year earlier. Headline EPS is the main profit gauges in South Africa and strips out certain one-off items.

By TJ Strydom and Jane Merriman, www.af.reuters.com

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