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SHF - Steinhoff International Holdings Limited - Results Of Annual General
Meeting ("The AGM"), Chief Executive Officer`s Statement And Broad Based Black
Economic Empowerment Transaction ("BBBEE")
STEINHOFF INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration no. 1998/003951/06)
Ordinary share code: "SHF"
ISIN: ZAE000016176
("the Company")
RESULTS OF ANNUAL GENERAL MEETING ("the AGM"), CHIEF EXECUTIVE OFFICER`S
STATEMENT AND BROAD BASED BLACK ECONOMIC EMPOWERMENT TRANSACTION ("BBBEE")
RESULTS OF AGM
Shareholders are advised that, save for ordinary resolution number 4 which was
withdrawn (general authority to issue shares for cash, requiring a 75%
majority in terms of the Listing Requirements of the JSE Limited), all the
ordinary and special resolutions proposed in the Notice of Annual General
Meeting dated 7 November 2008, were passed by the requisite majorities of
shareholders present and represented by proxy and being entitled to vote at
the AGM held earlier today. Shareholders and/or their representatives holding
or representing 80,06% of the issued share capital and being eligible to
attend and vote, were present or represented at the AGM. The special
resolutions have been lodged for registration with the Registrar of Companies.
Accordingly, the BBBEE transaction, full details of which were contained in
Ordinary resolution number 1 and Special resolution number 1 will become
unconditional once registered, where applicable, with the Registrar of
Companies. The Company will now proceed to the implementation phase following
which all of the Group`s South African operations will have advanced
substantially towards the targeted level of BBBEE ownership.
CHIEF EXECUTIVE OFFICER`S STATEMENT
The global economic slowdown and negative consumer sentiment affected our
global trading operations to varying degrees, but overall, Steinhoff`s retail
operations are benefiting from a marked shift in consumers` trading patterns
and preferences more towards the value and discount segments of the markets .
Our strategy is aimed to concentrate on our competitiveness within the
difficult environment and to position ourselves correctly to benefit from
shifts in the marketplace. Our structure and the global group`s diversity,
financial strength and risk profile within the fragmented European market,
allows the individual operations to benefit from the group`s financial
standing and, consequently, enables them to trade unhindered, notwithstanding
financiers, suppliers and landlord credit risk concerns about certain of the
Group`s competitors.
Balance Sheet
In line with the group`s strategy to benefit from the challenges brought about
by the global economic slowdown, all short-term incentive bonuses have been
enhanced with the primary focus being on cash management to optimize working
capital resources, within all divisions and regions that the group operates
in. Capital expenditure is restricted to maintaining the group`s current
capacity and is expected to be in-line with depreciation for the year. The
group trades comfortably within its cash and borrowing resources and the long-
term maturity profile of our borrowings (first refinancing due July 2010) is
benefitting our global credit risk profile and liquidity management.
Trading environment
The market within the UK is proving very challenging and first quarter
revenues and margins were flat, year-on-year. Within the group`s retail
operations in the UK, fascias such as Cargo, that trades in the more affluent
market segment has been disproportionally affected when compared to the value
propositions such as Harveys and Bensons that cater for the mass middle
market. The demise of major competitors has marred the industry as a whole,
but should result in growing market shares for financially sound players such
as Steinhoff and one or two others.
The group`s exposure to Germany, Austria, and Switzerland (given the
consumer`s conservative credit profile within these markets), as well as the
group`s exposure to the value/discount sector within these markets, has
resulted in this territory growing in excess of 10% (in constant currency) for
the first quarter and both revenues and margins are expected to be on budget
for the remainder of the year. Margins have benefited from the zloty and
forint weakness and the decrease in input prices. Sourcing operations is again
showing unprecedented growth as the group continues to add volume of own
retail operations on the sourcing platform. The strength of the US dollar has
been largely offset by deflation in respect of certain of the Group`s raw
material inputs, as well as improved buying terms due to over capacity in the
East resulting from slower demand. Logistics costs have also declined as a
result of the knock-on effects of the slow-down in Global demand and lower oil
price.
The group experienced mixed results within the retail operations in the
Pacific Rim. Again, results were influenced by the positioning of operations
in terms of value versus aspirational consumers. Revenue grew marginally
within the first quarter but profits, in constant currency terms, is expected
to remain flat year-on-year. Since September trading has shown growth in
excess of 5% mainly as a result of the interest rate cuts and corresponding
uplift within consumer sentiment, coupled with the new catalogue launched in
October. Trading within New Zealand which represents less than 1% of Group
revenues, remains depressed, with revenues and profits substantially down
within this region.
Within South Africa, Unitrans`s logistic business continues to experience
growth in excess of 30% as a result of the investment in the previous
financial year in new long-term contracts which continues to result in market
share gains.
Unitrans` motor division is affected by the total market decline with an
overreliance on volume brands. The parts and services division remains a
strong performer on the back of record vehicle sales in the past three years,
while Hertz car rental is experiencing declines within the inbound overseas
tourist market.
PG Bison and the timber operations within South Africa have been affected by
the softer demand, and pricing pressures within the competitive landscape. The
success of the newly built particle board plant in the Eastern Cape, coupled
with the closing-down of less efficient plants should, however, benefit
margins going forward for the remainder of the year. The group is also
investigating the export market as a viable long-term proposition.
PennyPinchers and Timbercity`s growth (10%) within the first quarter is mainly
as a result of the internal acquisition of Partners` status and the
consolidation of franchised and joint venture stores and is expected to
continue for the remainder of the year.
The raw material division is showing negative growth on the back of slowing
consumer demand and the division`s exposure to the furniture market within
South Africa.
The current state of the global economy, particularly the credit environment
and consumer spending patterns, represent a challenging trading environment
for the remainder of the financial year. However, management is confident that
the group`s business units in all regions are well structured to withstand
these challenges and to continue to maintain and grow activity levels and
profitability.
SJ Grobler
Company Secretary
Wynberg, Sandton
1 December 2008
Sponsor - PSG Capital (Pty) Limited
Date: 01/12/2008 16:39:15 Supplied by www.sharenet.co.za
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