Steinhoff international sees strong growth for first half, declares dividend

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Steinhoff international sees strong growth for first half Ellerine Holdings Limited has a number of well-known South African furniture brands under its belt. PHOTO: Getty Images

The group’s operating profit increased by 41 per cent to 11 billion rand. Earnings berfore interest, taxes, depreciation and amortization (EBITDA) rose 43 per cent to 14 billion rand and Headline Earnings per share were up 25 per cent to 395 cents per share.

Steinhoff[DATA SHF:STEINHOFF INTERNATIONAL HOLDINGS LIMITED.], which specialises in the manufacturing of furniture and household goods in Europe, Africa and the Pacific Rim, declared a cash only dividend of 80 cents per share.

The group’s European strategy was to focus on margin enhancement, which saw their revenue in the region up by 51 per cent in Europe and 6 per cent in the United Kingdom.

Revenue attributable to the group’s international retail activities increased by 10 per cent to 57.5 billion rand and operating profit was up 23 per cent to 3.1 billion rand.

In the United Kingdom, the group focused on improving the quality of their store network by closing non performing stores and upgrading existing ones. Their bedding retail operation is now the largest bed retailer in the country.

“The prevailing global economic environment remains volatile. The group is confident that the diversity inherent in its assets and earnings will continue to protect the group against any prolonged downturn in any one market where it operates,” said the company in a statement on Tuesday.

While most of their operations are based in Europe, Its operations in Africa, on the other hand, were also on the rise.

Revenue increased by 41 per cent to 47.4 billion rand as a result of the consolidation of two acquisitions- the South African retailer business, the JD Group and the manufacturing assets of the industrial group, KAP.  

Margins however declined as a result of the margin decline in the African retail business segment.

“In Africa, the current low economic environment is expected to continue and has led to a focus on containment of costs and improved efficiencies to maintain margins in a more competitive low-volume environment,” said the statement.

Steinhoff have stated that while the global economic environment remains unstable, they are confident that the diversity of their assets and earnings should continue to protect them from any prolonged downturn in any one market where they operate.