Shares slump again at Poundland's scandal-hit owner Steinhoff
Attempts by Poundland's scandal-wracked South African owner to sooth the nerves of its financial backers seems to have had little impact, as its shares slumped again yesterday.
Steinhoff, which bought the Willenhall-based discount business for £610 million last year, has seen both its chairman and chief executive quit in an accounts scandal that has wiped billions of its stock market value.
While its retail companies like Poundland and Bensons for Beds in the UK continue to trade well, the parent group is battling to survive in the face of a string of probes and official inquiries.
Steinhoff held a major briefing in London this week for its bankers and lenders, attempting to underline the strength of its businesses, outline its debt structure and explain its actions to deal with the current crisis, including launching an internal probe by accountants PwC.
But its efforts seem to have had little impact. Its shares on the Frankfurt stock exchange fell 20 per cent yesterday, while in South Africa it slumped 30 per cent on the Johannesburg exchange.
Documents prepared for the meeting show the group has total debt of about 10.7 billion euros, or £9.5 billion. The vast majority – about £7.5bn – is in Europe. The debt total is about double the level of £4.6bn included in Steinhoff's 2016 audited financial results.
But the company has now warned these results cannot be relied on and will have to be restated. Its 2017 financial figures have also been delayed.
The briefing for bankers also stated that Steinhoff could not provide details on the “magnitude of the accounting irregularities that are under scrutiny”.
It was the revelation of those irregularities that were followed by the immediate resignation of chief executive Markus Jooste and later by the group's largest shareholder and former chairman Christo Wiese, and his son.
The company has now put together a brand new executive team to run the business, but this too has so far failed to improve investor confidence.
Steinhoff's operations in South Africa, Europe, Australia and the US employ around 130,000 people. As well as Poundland and Bensons for Beds in the UK it owns furniture chain Harveys.
