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Unaudited And Unreviewed Interim Results For The Six Months Ended 31 March 2020
Steinhoff Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
JSE Code: SHFF
ISIN: ZAE000068367
(“Steinhoff Investments”, “Company” or the “Group”)
UNAUDITED AND UNREVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2020
1. SALIENT FEATURES
• Revenue from continuing operations increased by 6.5% to R37.6 billion
• During the Reporting Period a provision of R9.4 billion has been recognised in respect of the
Litigation Settlement Proposal as well as the recognition of a foreign exchange loss of R4.8 billion
on the SIHPL CPU liability
• Operating profit from continuing operations, before other material expenses, increased from a
profit of R3.3 billion to a profit of R3.9 billion
• Operating profit from continuing operations, after other material expenses, decreased from a
profit of R4.1 billion to a loss of R10.5 billion
• Headline earnings per share decreased from a profit of 2 481.8 cents per share to a loss of 23
716.3 cents per share
• Basic earnings per share decreased from a profit of 3 487.3 cents per share to a loss of 24 187.2
cents per share
• Normalised basic earnings per share increased from a profit of 1 880.0 cents per share to a profit
of 2 327.3 cents per share
• The Group adopted IFRS 16: Leases during the current Reporting Period, using a modified
retrospective approach with no restatement of prior period reported results. This had a material
impact on the Group’s statutory results for the Reporting Period. To form a meaningful
assessment of Group performance as compared to the prior period, shareholders are referred to
Steinhoff Investments’ full interim results.
2. OVERVIEW
Steinhoff Investments is a wholly-owned subsidiary of Steinhoff International Holdings N.V.
(“Steinhoff N.V.”) and is the issuer of variable rate, cumulative, non-redeemable, non-participating
preference shares with a capital value of R1.5 billion. The preference shares are listed on the JSE. The
listing of the preference shares was suspended by the JSE effective 1 March 2018, due to outstanding
reporting requirements, and has remained suspended since that date.
The consolidated and separate annual financial statements for the year ended 30 September 2019
were released on 29 May 2020 (“FY2019 Accounts”), ahead of the release of the delayed consolidated
and separate annual financial statements for the years ended 30 September 2016, 2017 and 2018 in
order to give the market the most recent financial information as soon as possible.
In the FY2019 Accounts the Company’s external auditors, Mazars, issued (i) a disclaimer of opinion on
the 2019 Consolidated and Separate Statements of Financial Performance and Consolidated and
Separate Statements of Cash Flows, and (ii) a qualified opinion on the Consolidated and Separate
Statements of Financial Position.
The main reason for Mazars’ modification of the 30 September 2019 audit report was that the prior
years had not been audited. The opening position for the 2020 interim results has now been audited.
Certain other matters contributed to the modified audit opinion, including (i) litigation and claims, (ii)
going concern, and (iii) tax uncertainty. These matters and uncertainties still exist and remain relevant
to these Interim Results but all relate to past events. There are no further matters to report following
publication of FY2019 Accounts with respect to potential or contingent liabilities.
At 31 March 2020, Pepkor Holdings Limited (“Pepkor Africa”) comprised 100% of the turnover of
Steinhoff Investments and 82% of its total assets. Pepkor Africa received an unqualified audit report
for their 2019 Annual Financial Statements, and as such released their unreviewed Interim Results
for the six-month period ending 30 March 2020 on 27 May 2020 (“Pepkor Africa 2020 Interim
Results”).
This Interim Report covers the six-month period ended 31 March 2020 (the “Reporting Period”) and
also addresses the material events subsequent to the Reporting Date up to the publication date of this
report.
The Company is publishing these unreviewed Interim Results in circumstances where a review is
required in terms of the JSE Listings Requirements, for the following reasons:
• The Company believes that the timely publication of useful and relevant financial information
is in the best interests of its stakeholders, particularly its preference shareholders, in
circumstances where they are prejudiced by a suspension of trade.
• Publication of these Interim Results is an important step toward regularising the Company’s
periodic financial reporting.
• In light of the Steinhoff N.V. Group’s proposed global settlement of litigation, it is the
Company’s view that the publication of timely information relevant to the Company’s
preference shareholders is of great value to them.
• The audit and risk committee and the board have confirmed that they are satisfied that these
Interim Results fairly presents the Company’s financial position.
• The Company’s stakeholders have access to both the Pepkor Africa 2020 Interim Results and
the Half Year Results of Steinhoff N.V., being the Company’s major asset and holding company
respectively.
3. DIRECTORS RESPONSIBILITY STATEMENT
These condensed consolidated interim financial statements together with the announcement are the
responsibility of the directors of the Company and has not been subject to an audit or a review by the
Company’s auditors.
The directors of the Company hereby confirm that, the Group will continue as a going concern for the
foreseeable future and, as far as each of them are aware, subject to the judgements and estimates set
out in the Basis of Preparation, the 2020 Condensed Consolidated Interim Financial Statements give a
true and fair view of the assets, liabilities, financial position and profit or loss of Steinhoff Investments
and the enterprises included in the Group’s 2020 Condensed Consolidated Interim Financial
Statements.
It is the directors of Steinhoff Investments’ intention that the financial statements for the earlier years
will be released before the end of 2020 and that regular reporting will resume with effect from the
2020 full year results.
These results have been prepared under the supervision of TLR de Klerk (director); BCom (Hons), CTA,
HDip (Tax), CFM.
4. EXTERNAL AUDIT
These 2020 Interim Results have not been audited or reviewed by the Company’s auditors, Mazars
and are being released in order to give the market the most recent financial information as soon as
possible.
5. FINANCIAL PERFORMANCE
Steinhoff Investments achieved a mixed set of operating results for the six months ending 31 March
2020, despite a difficult retail environment where consumer spending remained constrained with low
consumer confidence, high levels of unemployment, load shedding and low economic growth. This
was exacerbated during March 2020 with the spread of the Coronavirus (COVID-19) across South
Africa and the globe, resulting in the declaration of a national state of disaster and the implementation
of a national lockdown effective from 27 March 2020.
A number of investments have been disposed of by the Group since December 2017, resulting in an
increase in cash held during the Reporting Period.
On 27 July 2020, Steinhoff N.V. released a detailed update on its efforts to resolve the ongoing
complex legal claims and litigation proceedings, including details of a proposal for the settlement of
the outstanding litigation (“Litigation Settlement Proposal”) in respect of these claims. Further details
of the proposal are provided in the referenced announcement. A provision of R9.4 billion in respect
of litigation claims has been recognised at the Reporting Date. In addition, as this proposal has not yet
been agreed to by any party, the claims are still being disclosed as contingent liabilities.
In addition, as a result of the change in the ZAR/EUR exchange rate during the Reporting Period a
foreign currency loss on the Steinhoff International Holdings Proprietary Limited contingent
payment undertaking (“SIHPL CPU”) of R4.8 billion was raised.
6. OUTLOOK
Trading subsequent to the Reporting Period remains volatile and the difficult trading environment is
expected to persist as consumer spending continues to be constrained. In addition, the impact of the
COVID-19 pandemic and related store closures and other trading restrictions are having a negative
impact on revenue and profitability. Very strong trade was achieved during May and June 2020 as
lockdown measures eased and this can be attributed to pent-up demand, social grant payments as
well as the value propositions and market positioning of the main trading subsidiary company
Pepkor Africa.
Pepkor Africa remains confident that it is well positioned to gain market share in the post-COVID-19
‘new economy’ with its defensive discount and value positioning being more resilient through its
focus on babies’ and children’s clothing and large contribution of basic and replenishment products.
7. DIVIDEND DECLARATIONS - Preference shares
On 21 February 2020, the board declared a gross dividend of 416.90753 South African cents per
preference share. This dividend was paid on Monday, 30 March 2020.
Subsequent to the Reporting Period, on 24 August 2020, the board declared a gross dividend of
356.78425 South African cents per preference share. This dividend will be paid on Monday, 21
September 2020.
The preference shares dividends are payable in the currency of South Africa and are subject to local
dividend tax of 20%.
8. DIVIDEND DECLARATION – Ordinary shares
In line with prior periods, no interim dividend has been declared on the ordinary shares.
9. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It is only a
summary of the information in the full announcement and does not contain full or complete details.
The Full Announcement can be found at:
https://senspdf.jse.co.za/documents/2020/jse/issh/shffh/SHFF_HY20.pdf
and also on Steinhoff International’s website http://www.steinhoffinternational.com or may be
requested in person, at the Company's registered office or the office of the sponsor, at no charge,
during office hours.
Any investment decisions by investors and/or preference shareholders should be based on
consideration of the full announcement, as a whole.
These results have been prepared under the supervision of TLR de Klerk (director); BCom (Hons), CTA,
HDip (Tax), CFM.
These results have not been audited or reviewed by the company’s auditors.
3 September 2020
JSE Sponsor
PSG Capital
Date: 03-09-2020 08:00:00
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