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Steinhoff reports rise in profit as buying spree boosts trading

Steinhoff International Holdings NV, the South African retailer that in 2016 bought U.S.-based Mattress Firm for $2.4 billion, on June 7 reported a jump in fiscal first-half profit and revenue as recent acquisitions boosted its performance.

The low-price furniture retailer, which also bought British discount retailer Poundland for £610 million last year, said net profit in the six months to March 31 rose to €706 million, or 15.4 cents per share, compared with €645 million, or 16.1 cents a share, in the same period a year earlier. Revenue increased 47% to €10.17 billion. Adjusted operating profit, a figure closely watched by analysts, climbed to €903 million from €797 million.

Steinhoff, which is based in South Africa but has its main listing in Frankfurt, sells furniture in developed markets through brands such as Bensons for Beds and Best & Less. It also owns a chain of apparel retailers in Africa. Steinhoff purchased Mattress Firm last year, marking its entry into the U.S. market, then subsequently purchased Sleepy's, another bed seller. Steinhoff said it incurred €48 million costs in the first half associated with rebranding Sleepy's into Mattress Firm.

"The group remains confident in its ability to keep prices low, and to improve operating margins through increased efficiencies, relative scale and increased operating leverage," CEO Markus Jooste said in a statement.

Steinhoff recently pulled out of plans to merge its African business with supermarket chain Shoprite Holdings Ltd. and said in May it intended to list the African operation in Johannesburg. The company said June 7 it expected the listing to complete in the third quarter of 2017.