Following media reports overnight, Steinhoff has released a
SENS statement today indicating that it has found new
information relating to accounting irregularities, prompting it
to cancel its results release today and delay the audited results
release until further notice. The CEO, Markus Jooste, has
stepped down with immediate effect. Christo Wiese is taking
over as executive chairman. We hold Steinhoff shares on
behalf of our client base. To place this in context, this company
is widely owned by institutional investors in South Africa and as
of yesterday was a top 10 company in the JSE SWIX All Share
index.
At this stage, there are clearly more unknowns than known
information pertaining to the group’s real financial position
and operations. It is clear that fraud remains a distinct
possibility given the above information.
What we do know is the following:
• The group has approximately R21 per share of value in the
listed stakes that it owns (STAR, PSG and KAP International),
per closing prices of these shares on 5th December. It is
likely there is some contagion in these assets, and indeed
these shares are experiencing selling pressure today.
• There is net debt on Steinhoff’s balance sheet of ~R100bn,
or R23 per share.
• Aside from its operational household goods retail and
manufacturing assets, the group is a significant investor in
retail properties in Europe. While we should be suspicious
of its reported segmental accounting, it disclosed €243m of
operating income from properties in FY16. This could yield
a value of €4bn, or R15 per share, and could be regarded as
a source of liquidity should the group be broken up into its
component parts.
• This leaves the core operating assets, of which we can be
highly uncertain of the value given likely fraud. The key
concern investors will have now is that, short of a fire sale
of the group’s non-controlled assets to reduce debt, the
confidence of debt funders will have all but evaporated and
this is likely to place pressure on the group’s ability to fund
itself in the normal course of business. A negative
operational impact is a certainty.
At the time of writing, the share price is R23.00 this morning
and is likely to be highly volatile. We have taken an in-principle
decision to exit our holdings given the above developments,
but given the share price response this morning we will do this
in a manner that maximises value for our clients. It is likely that
fundamental value is above current levels – even in a break-up
of the business scenario – but the company has clearly lost the
trust of institutional investors (ourselves included) and this
could weigh on listed values for some time.
Should you have any questions, please do not hesitate to
contact us on sales@anchorcapital.co.za
Kind Regards,
Sean Ashton
Chief Investment Officer
Wenn ich es aber richtig lese, haben Sie auch Steinhoff Aktien verkauft!
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