• Operating profit up 13%
  • Revenue increased 48%
  • New acquisitions including Poundland delivered 9% revenue growth

 

Steinhoff delivered a leap in profits and sales at the half-year mark, although its recent clutch of acquisitions dented margins.

The South African retail giant, which owns UK retailers including Poundland and Benson for Beds, posted a 13% increase in operating profit to €903m (£783.6m) in the six months to March 31.

Revenue during the period jumped 48% to €10.1bn (£8.8bn) while the retail group’s new acquisitions including Poundland and Mattress Firm in the US delivered a 9% increase in revenue, excluding acquisition costs.

However, restructuring costs associated with Mattress Firm decreased operating margin for the business to 4.5% compared with the remainder of the group’s operating margin at 7.5%.

Steinhoff chief executive Markus Jooste said its recent acquisitions demonstrated “the resilient model of the group underpinned by a growing discount market segment, product and geographic diversification.”

Fall in operating profit

Steinhoff’s UK operating profit fell 12% during the period to €23m (£19.9m) while revenue dropped 19% to €325m (£282.2m).

The retailer, which posted a 2% dip in like-for-like sales in the region, attributed the declines to the devaluation of the pound and store closures.

The retail group closed 57 loss-making Poundland stores during the period, which Steinhoff said “should have a positive impact on profitability going forward”.

Jooste said: “We remain excited about the Poundland acquisition providing the general merchandise business with the necessary scale in the UK.

“Poundland is trading ahead of expectations with continuing positive like-for-like revenue growth.”

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