Scandal-ridden Steinhoff reports 2% increase in nine-month sales, what you need to know…

PUBLISHED: Fri, 31 Aug 2018 14:29:21 GMT

JOHANNESBURG (Reuters) – Steinhoff reported a slight increase in nine-month sales on Friday as its managers remained preoccupied with cleaning up after an accounting fraud that nearly tipped the South African retailer into bankruptcy.

Steinhoff was thrown a lifeline last month when its creditors agreed to delay debt claims for three years after the multinational retailer uncovered accounting irregularities that sent its shares crashing and left it scrambling for working capital.

The company, which is registered in the Netherlands, said sales rose 2 percent to 12.9 billion euros ($15 billion) in the nine months through June as a strong showing at its separately listed African unit, Pepkor, offset weak results from Europe, the United States and Europe. The group’s brands include Mattress Firm in the United States and Poundland in Britain.

“As a management team we are focused on maintaining stability within the operations; finalising the implementation of the restructuring plan with the group’s financial creditors; improving governance at all levels,” the company said in a statement.

Shares in Steinhoff rose 3.17 percent to 2.95 rand as of 1026 GMT, valuing the company at around 12 billion rand, far from the more than 200 billion rand valuation the stock fetched just nine months ago.

Steinhoff has already written down the value of its assets by more than $12 billion following initial findings of an investigation into the company’s past bookkeeping practices.

The probe, being carried out by auditing firm PwC, has uncovered accounting irregularities that date back to at least 2015, and is expected to be completed by the end of the year.

($1 = 0.8570 euros)

Reporting by Tiisetso Motsoeneng; Editing by James Macharia and Susan Fenton

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