A Poundland store in the UK, part of Steinhoff’s Pepco group.
- Steinhoff says it increased its sales by 14% in the past financial year as customers flocked to its discount stores in Europe and Africa.
- The group is now focusing on reducing its debt by 9.8 billion euros, which still exceeds the total turnover of all its operations.
- The retailer is also nearing the end of a complex legal process to reach a deal with investors who lost out when its share price fell in late 2017.
Retailer Steinhoff announced a 14% increase in revenue across its entire business for the year ending September 30, 2021.
In its annual report released Friday, Steinhoff said rising sales, expanding store footprints and easing Covid-19 restrictions helped boost revenue.
The total turnover of its operations in South Africa, Europe, the United States and Australasia increased from 8.03 billion euros in 2020 to 9.19 billion euros in 2021. The group publishes his results in euros, as he is domiciled in the Netherlands.
Steinhoff said its African subsidiary, JSE-listed Pepkor Holdings, held firm in a tough retail environment.
“From an operating environment perspective, the discount and retail sectors continue to be favored by customers, with reduced consumer spending due to rising unemployment and the effects of a underperforming economy,” he said. Turnover increased from 3.89 billion euros in 2020 to 4.35 billion euros in 2021.
The group’s European operations, which have been consolidated into the Pepco Group listed on the Warsaw Stock Exchange, increased their turnover by 18%, from 3.5 billion euros to 4.1 billion euros . The increase is partly due to the addition of 364 new stores, including the retailer’s first Pepco stores in Austria, Spain and Serbia.
Steinhoff said its main challenge for fiscal 2022 would be to reduce its total group services debt by 9.835 billion euros, which still exceeds its total revenue. This would be done, in part, through more asset disposals.
Over the past year, the group has received around 1 billion euros from the listing of the Pepco Group, which it has used to reduce its debt. The company also received a €520 million distribution from its US associate Mattress Firm, which filed for listing on the New York Stock Exchange.
Earlier this week, a court approved Steinhoff’s bid to have its proposed €1.43 billion (R25 billion) settlement with investors who lost in its stock price crash. action is made final and binding.
If no appeal is filed by Feb. 15, payments to investors can start a group called Steinhoff Recovery Foundation. As part of the settlement, the plaintiffs will have to drop all current and future legal actions against the retailer.