trending Market Intelligence /marketintelligence/en/news-insights/trending/lplX9EtAdpR3UkwMKxTp2A2 content esgSubNav
In This List

Steinhoff's 2016 results must be restated, retailer says

Blog

Using ESG Analysis to Support a Sustainable Future

Video

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Q&A: Streamlining Analytics for TCFD Reporting

Blog

Evergrande and the wider impact: a sentiment analytics based perspective


Steinhoff's 2016 results must be restated, retailer says

South African retailer Steinhoff International Holdings NV said Dec. 14 that accounting issues currently under investigation also impact its 2016 results, and its consolidated financial statements for that year need to be restated.

Steinhoff, which has seen its share price collapse since disclosing Dec. 6 that it appointed an independent auditor to probe accounting irregularities, said its 2016 financial statements could no longer be relied upon.

"The company, on the advice of the independent committee of the supervisory board, has today formed the view that issues concerning the validity and recoverability of certain Steinhoff Europe balance sheet assets under scrutiny in the 2017 audit work are also relevant to the 2016 consolidated financial statements," it said.

The furniture, household goods and general merchandise retailer was due to deliver financial statements for the fiscal year ended Sept. 30, 2017, on Dec. 6. The issue date is now uncertain. Meanwhile, an annual meeting of Steinhoff's lenders due to take place in London on Dec. 11 has been postponed until Dec. 19.

Steinhoff faces questions over its accounting of revenue and profit from joint ventures in Europe. It is involved in courtroom battles in the Netherlands and Germany with a former joint venture partner. A verdict in the Netherlands case is expected by Dec. 22.

The company's shares, which have reversed some of their losses in recent days, headed lower Dec. 14. In early-morning trading in Frankfurt, the stock traded down 7 euro cents, or 11%, at 59 cents. Steinhoff's shares have plunged about 80% in value since the Dec. 6 statement, wiping out more than €10 billion in market capitalization.

Steinhoff, which is based in Stellenbosch and incorporated in the Netherlands, has its primary listing in Frankfurt. Its shares are also listed in Johannesburg.

The company, which includes the U.S. business Mattress Firm that owns the Sleepy's brand, is taking steps to urgently shore up its finances. It said Dec. 7 that it had received "expressions of interest" in certain noncore assets that would release a minimum of €1 billion of liquidity.

It also said its Steinhoff Africa Retail Ltd. subsidiary, which was floated only in September, has committed to refinancing its long-term liabilities due to the company, which would free up another approximately €2 billion.

Steinhoff's brands include Poundland, Harveys and Bensons for Beds in the U.K., and Conforama in continental Europe. According to its website, the company operates more than 12,000 stores and employs over 130,000 people.