Steinhoff investigation delays annual report, shares plummet
The news saw the value of Steinhoff shares fall as much as 21 per cent, from R1.78 (18 cents) per share to a low of R1.40 (14 cents), before climbing back up to R1.60 (16 cents) per share by the end of trade, seeing a total decrease of roughly 10 per cent.
In a release to investors, the company noted the investigative process undertaken by PwC into its financial irregularities has been “significantly more complex than initially anticipated,” and won’t be complete until the end of February.
A firm understanding of this report is necessary in the reporting of Steinhoff’s financial results, leading to the decision to push back to reporting date from January 2019 until at least April.
“We sincerely regret this revision to the reporting timeline,” Steinhoff chairperson Heather Sonn said.
“While substantial progress has been made, the volume and complexity of the work required, including the interactions between the various parties, has been significantly greater than initially anticipated… we continue to approach these projects with maximum effort and commitment as we seek to bring them to conclusion.”
While Sonn said the company is making good progress on its financial restructuring and is unaffected by the reporting delay, the market reacted quickly and negatively to the news.
The share fall, while painful, is still ahead of the low experienced by the business in June of 2018 after the business warned of its financial position and that it would seek a debt extension, which saw shares fall to R1.07 (11 cents) per share – a 98 per cent drop from the R55.81 ($5.49) per share seen at the beginning of December before the initial accounting irregularities were reported.
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