Share of the week: Steinhoff

Global industrial company Steinhoff International increased annual group revenue by 21% to R43-billion and operational profit by 12% to R5.4-billion.

Cash generated from operations rose 26% to R7.2-billion, boosting net asset value a share by 24%. The company declared a distribution of 65c a share.

Steinhoff manufactures, sources, warehouses, distributes and retails furniture and household goods in Europe and the Pacific Rim.

Its diversified industrial business in Southern Africa manufactures and sources timber products and other raw materials, provides logistics services and has interests in building supplies and automotive retail. The company, traditionally a strong manufacturer, is gradually moving its focus towards the retail side of the furniture industry.

The core market of the company's products has gravitated towards Europe, with sales in that region rising by 38% to R3.567-billion, whereas SA sales rose only 10% to R8.9-billion.

Given such a significant exposure to the moribund European continent, the performance of the group is even more impressive.

Steinhoff will consider a separate listing for its European unit from April next year, says chief executive Markus Jooste.

"The business in Europe would probably be better appreciated in a European listing environment, but there's no urgency." He said the company would consider a separate listing after integrating its $1.6-billion acquisition of French retailer Conforama.

Although the Steinhoff share price has given up most of its post-recession gains over the past six months, it is still 12.5% higher than it was exactly a year ago.

The company's latest PE ratio of 9.08 is quite some distance below the overall PE ratio of the All Share index, thus making it relatively cheap.

This year , Steinhoff's directors collectively bought company stock worth R25.8-million.

This was offset by a one-off liquidation of R96-million worth of Steinhoff stock by one director, Bruno Ewald.