Steinhoff International postpones results
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.