Steinhoff to spread retail footprint

The company reported diluted headline earnings per share of 244.2 cents for the year ended June 2010, down 1% from the previous year's 241.9 cents.

A distribution of 63 cents per share was declared from 60 cents in 2009.

The I-Net Bridge consensus forecast was for diluted headline earnings per share of 230.3 cents and a total dividend per share of 59.3 cents per share.

Steinhoff International, which operates in Africa, Continental Europe, the Pacific Rim and the UK, said that with the rand strengthening by 14% during the year against the euro and weakness in eastern European currencies, the group's underlying business was not apparent when translated and evaluated in rand.

Focus on sustainability

The group's southern African operations increased revenue by 6.7% to R20.7 billion.

Steinhoff International said that a further factor impacting upon revenue was the growth in intra-group-trading, which increased by 14% in the year under review.

"This is in line with our strategy to focus on sustainability and quality of revenue, which leads to higher margins, accordingly, as a result of the effect of the elimination and consolidation of intra-group sales as well as the impact of the strengthening rand against the euro, the group's rand denominated revenue was 48 billion rand from 51 billion rand in 2009," the group said.

Within the group's African operations, Unitrans delivered an excellent set of results, with revenue and operating profit exceeding that of 2009.

Building supply retail business takes strain

Unitrans Supply Chain Solutions designs, implements and operates supply chain and logistics solutions for customers, its services include transportation, warehousing, distribution, clearing and forwarding and related supply chain services.

The group's building supply retail business, which targets the professional tradesman, did not fare as well because trade demand had been weak throughout the year.

"The residential market continued to slow during the year; building plans passed declined and new residential construction was subdued. As a result total sales and profit for this business were down for the year under review," said Steinhoff.

Rand strength impact

Revenue was at R16.8 billion in Continental Europe, R8 billion in the UK and R2.6 billion in the Pacific Rim.

"Our mainland European businesses reported improved sales performances supported by a resilient economy and strong consumer behaviour in countries such as Switzerland, Austria and Germany.

The European retail, manufacturing and wholesale businesses generated revenue growth in euro terms," the group said.

'Rand strength will continue to impact upon the group's rand reported earnings if the growth in euro profits does not outperform the effect of the change in the average rand translation rate," said Steinhoff International.

The group said that uncertainty remained about a sustained improvement in market conditions but that it was committed to the long-term growth of its business.