Steinhoff Africa Retail's FY operating profit jumps 25 percent

Steinhoff Africa Retail reported a 25 percent rise in full-year operating profit on Monday, thanks mainly to cost cuts and a strong showing at discount clothing chains.

Steinhoff Africa Retail (STAR), spun off from the one of the world’s biggest furniture retailers earlier this year, said operating profit came in at 6.1 billion rand ($443.15 million) in the year ended September, compared with 5.8 billion rand a year earlier.

The top-line growth of 13 percent was slower than the operating profit jump, indicating deep cost cuts including closure of underperforming stores.

“STAR’s strategic focus on lowering the cost of doing business and accessing new products and services through existing infrastructure drove group operating profit growth,” the company said.
Steinhoff, which owns Poundland in Britain, Mattress Firm in the United States and Conforama in France, spun off its African chains to get a higher rating for its developed market businesses and to give investors keen on exposure to Africa a chance to invest in STAR directly. 

Steinhoff also announced it would stick to its schedule to release results for its fiscal full year on Dec. 6 despite an ongoing criminal and tax investigation in Germany, but it said the figures would be unaudited.

"The Supervisory Board of Steinhoff confirms that the 2017 consolidated financial statements will be released albeit in unaudited form on schedule on 6 December 2017," the company, which has listings in Germany and Johannesburg, said in a statement on Monday.

"No additional information came to light to change the previous views expressed regarding the investigation," it said, adding it expected to publish the audited results for its fiscal year through Sept. 30 before the end of January.

A court decision on whether to allow a probe into Steinhoff's accounts is expected by no later than December this year, the South African group said last month.

German prosecutors are investigating current and former executives of Steinhoff for suspected accounting fraud. Steinhoff has denied there was any wrongdoing.

($1 = 13.7650 rand)