Steinhoff has posted a fall in its UK and overall first-quarter sales as chairwoman Heather Sonn warned that its accounting scandal could stretch beyond the €6bn already flagged.
The embattled Poundland parent company’s acting chair said that capital to keep its businesses outside of South Africa ticking over has “largely dried up” in the wake of its accountancy scandal in December last year.
The retail group said that its accounting irregularities were largely related to discrepancies in its Central European operations.
Steinhoff, which drafted in PwC to investigate the extent of its accounting inaccuracies, has warned that discrepancies could be more substantial than earlier estimates indicated.
“The expected overstatement of profits and the accounting treatment of related parties may also result in material additional impairments of intangible and other assets, although further investigation is required to confirm and quantify this position,” said Sonn.
Sonn was appointed following a wave of resignations from Steinhoff in the aftermath of the scandal, including that of former chief executive Markus Jooste and former majority shareholder and chairman Christo Weise.
The beleaguered firm recorded a 5% drop in total group retail revenue to €4.8bn (£4.2bn) in the quarter to December 31, 2017.
UK sales declined 6% to €172m (£152.6m) during the period and were down 4% on a constant currency basis.
This decline was exacerbated by a 7% drop in like-for-like sales, which Steinhoff attributed to challenging sales at UK subsidiaries Harveys and Bensons for Beds.
Stablemate Poundland reported a 5% rise in like-for-like sales during the period, although overall sales were down 5% due to a 10% decrease in the number of stores it traded in during the period.
Steinhoff’s UK businesses comprise Poundland, Harveys, Bensons for Beds and value fashion retailer Pep&Co.