Steinhoff Africa Retail Rises by Record Profit Beats Estimates
(Bloomberg) -- Steinhoff Africa Retail Ltd. rose the most since its September listing after South Africa’s second-biggest retailer reported debut earnings that beat estimates.
The stock climbed as much as 6.6 percent and traded 1.1 percent higher at 25.99 rand as of 10:28 a.m. in Johannesburg, valuing the company at 90 billion rand ($6.5 billion). That brings its gain since listing to 27 percent.
With more than 4,800 stores in 12 African countries, the owner of clothing chains including Pep and Ackermans is expanding in markets in which the company already operates. The retailer plans to open 350 more outlets in fiscal 2018, while expanding its distribution network in South Africa, it said in a statement on Monday. Mall development across the continent is helping to create opportunities for non-food retailers.
Reporting earnings for the first time since its separation from its Frankfurt-listed parent, Steinhoff International Holdings NV, the Johannesburg-based company said net income more than doubled to 3.6 billion rand ($261 million) in the year through September. That compares with the average estimate of 3.5 billion rand. STAR, as the company is known, also reported revenue that beat the highest analyst estimate.
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The company was only listed for 11 days during the 2017 fiscal year, so no dividend was paid. STAR’s management is planning a dividend cover of twice so-called headline earnings for the next financial year. A share sale prior to listing raised 15.4 billion rand, the most by a South African company in almost two years.
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