Steinhoff to list Star unit on JSE as Shoprite deal is back on
Steinhoff Africa Retail Limited (Star), a subsidiary of Steinhoff, has announced its intention to list its issued ordinary share capital on the main board of JSE before the end of September 2017.
The group also looks set to revive its merger with retailer Shoprite.
“The Star Group has secured options which, once exercised, will result in Star acquiring a strategic investment in Shoprite, one of Africa’s leading food and grocery retailers with a track record of successful growth and expansion in South Africa and across the continent,” Steinhoff said in a statement on Wednesday.
Star, a low-cost retailer, boasts over 4,800 stores in Sub-Saharan Africa. The company operates across various stable and growing sectors, including apparel, footwear, household goods, furniture, consumer electronics, appliances, general merchandise and building materials, while also providing financial and mobile services.
Star was established on 1 July 2017 following an internal restructuring by Steinhoff of its African retail assets. It will continue to leverage off Steinhoff’s strategic expertise, centralised sourcing, manufacturing and logistics expertise in order to maximise operating efficiencies across its retail operations following the listing.
For the 12 months ended 30 September 2016, the company reported revenue of R51.234 billion, earnings before interest and tax and capital items of R3.485 billion and earnings before
interest, tax, depreciation and amortisation and capital items of R4.397 billion.
During the periods under review, Star made two sizeable acquisitions and implemented a brand consolidation and restructure of the furniture operations. “These acquisitions, the consolidation and the restructure will have a positive impact on the performance of Star going forward,” Steinhoff said.
Star expects to list with approximately two times net debt to FY17 ebitda ratio. “Further store openings and organic initiatives will provide opportunities for expanding operating margin and maintaining strong growth momentum,” Steinhoff said.
Read: Price increases in 2017: Spar vs Pick n Pay vs Shoprite vs Checkers
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