Share price in dra­matic drop with post­pone­ment of re­sults

Cape Times - - BUSINESS REPORT - SANDILE MCHUNU [email protected]

STEIN­HOFF In­ter­na­tional’s share price fell by 10.11 per­cent on the JSE yes­ter­day to close at R 1.60 after the group an­nounced the post­pone­ment for the pub­li­ca­tion of its 2017 and 2018 year re­sults to mid-April 2019 with an an­a­lyst warn­ing of “dark days” ahead.

The trou­bled re­tailer had in­di­cated at the be­gin­ning of the year that it would re­lease the re­sults at the end of De­cem­ber, after PwC had fin­ished with its foren­sic in­ves­ti­ga­tion.

The group said yes­ter­day that the in­ves­tiga­tive process had been sig­nif­i­cantly more com­plex than an­tic­i­pated, with mul­ti­ple work streams op­er­at­ing across a num­ber of ju­ris­dic­tions.

“The in­ves­ti­ga­tion is sub­stan­tially com­plete, but more time is re­quired to fi­nalise a num­ber of fol­low-up work streams. The in­ves­ti­ga­tion is now ex­pected to be com­plete by the end of Fe­bru­ary 2019, with the fi­nal re­port be­ing avail­able to the com­pany shortly there­after,” the group said.

Stein­hoff has al­ready lost more than R200 bil­lion after the ad­mis­sion of ac­count­ing ir­reg­u­lar­i­ties in De­cem­ber last year, with the share price de­clin­ing by more than 90 per­cent.

Former chief ex­ec­u­tive Markus Jooste re­signed, fol­lowed by former chair­per­son Christo Wiese .

Chair­per­son Heather Sonn said the group sin­cerely re­gret­ted this re­vi­sion to the re­port­ing time­line. “While sub­stan­tial progress has been made, the vol­ume and com­plex­ity of the work re­quired, in­clud­ing the in­ter­ac­tions be­tween the var­i­ous par­ties, has been sig­nif­i­cantly greater than ini­tially an­tic­i­pated and more time is needed for all par­ties in­volved to com­plete the out­stand­ing tasks,” she said and would like to as­sure all stake­hold­ers that the group con­tin­ues to ap­proach pro­jects with max­i­mum ef­fort.

“In par­al­lel, our fi­nan­cial re­struc­tur­ing con­tin­ues to make good progress. Our re­cently an­nounced plans re­gard­ing the re­struc­tur­ing of the group’s fi­nan­cial in­debt­ed­ness are sig­nif­i­cant mile­stones and will bring in a new pe­riod of fi­nan­cial sta­bil­ity for the group. These plans are un­af­fected by to­day’s an­nounce­ment,” she said.

Jor­dan Weir, a trader at Ci­tadel, said the post­pone­ment for the re­lease of the re­sults was likely to have an ad­verse ef­fect on the mar­ket value of Stein­hoff’s share price in the im­me­di­ate term, in ad­di­tion to rais­ing con­cerns over fu­ture announcements and the re­lease of com­pany re­ports.

“There may have been a valid rea­son for the de­lay, such as the foren­sic au­dit cur­rently be­ing con­ducted by PWC, which has stated that the com­plex­ity of Stein­hoff’s busi­ness struc­ture has proven a chal­lenge to nav­i­gate. Al­ter­na­tively, the fi­nance team could sim­ply be strug­gling with the best way to word the re­port for share­hold­ers in 2019,” Weir said.

“In ad­di­tion to em­bark­ing on a com­pre­hen­sive foren­sic in­ves­ti­ga­tion the com­pany has si­mul­ta­ne­ously been in­volved in a com­plex in­ter­na­tional fi­nan­cial re­struc­tur­ing process, in­volv­ing a di­verse group of fi­nan­cial cred­i­tors,” the group said.

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