Poundland owner has credit rating cut amid scandal

THE South African owner of Poundland, which has around 20 stores in Northern Ireland, has said that it may have to restate more historic accounts as an accounting scandal at the company deepens.

Steinhoff, which also owns Harvey’s and Bensons for Beds, was plunged into crisis last month after revelations of accounting irregularities linked to its 2016 accounts.

The firm said although an internal investigation is ongoing, the restatement of the financial statements “for years prior to 2015 is likely to be required”, adding that the 2016 and 2015 financial statements “can no longer be relied upon”.

The group also warned investors to “exercise caution” in relation to the financial statements.

The initial revelation triggered a share price collapse, a management overhaul, lenders deserting the firm and credit insurance being withdrawn from its operating companies.

Last week Steinhoff was again downgraded by ratings agency Moody’s, which warned it may not have sufficient funds to “sustain its European operations”.

Cutting Steinhoff ’s credit rating from B1 to Caa1, Moody’s said the move reflected the “increasing pressure on the company’s liquidity profile”.

Moody’s pointed out that Steinhoff has €1.47bn (£1.3bn) euro of debt maturing next year, and the investigation into accounting irregularities could “make it challenging to either repay or refinance”.