Steinhoff Profit Gains as European Expansion Propels Growthby
Steinhoff International Holdings Ltd., the furniture chain that a week ago made a $2 billion counter bid for Britain’s Home Retail Group Plc, said first-half profit rose 67 percent as it expanded in the European and African discount markets.
Operating profit before capital items rose to 802 million euros ($873 million) in the six months through December, the Amsterdam-based company said in a statement on Monday. Sales advanced 47 percent to 6.7 billion euros.
The gains were “mainly due to the above-market growth in the discount market especially in Steinhoff’s key regions Europe and Africa,” the company said. The retailer will pay a gross dividend of 3.96 rand ($0.25) per preference share.
Steinhoff, which expanded into clothing with the acquisition of South African clothing retailer Pepkor Holdings Pty Ltd. for in 2014, is seeking to become one of the world’s biggest discounters with operations in Europe, Australia and Africa. It gets more than half its sales from Europe and in December moved its primary listing to Frankfurt from Johannesburg, increasing its exposure to investors on the continent.
“The positive growth momentum of the discount market segment is expected to continue for the remainder of this financial year,” Steinhoff said. “This growth momentum, supported by the investment in the group’s store network in the last three years, should continue to enable the group to take market share.”
Steinhoff shares declined 0.7 percent to 4.718 euros as of 2:39 p.m. in Frankfurt, valuing the company at 18.3 billion euros.
The company made a 1.4 billion-pound counter bid for Home Retail on Feb. 19, taking on J Sainsbury Plc for control of the Argos stores owner.