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:
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 firstname.lastname@example.org