Steinhoff International has published its unaudited results for 12 months ended 30th June 2016.
As indicated previously, the group reports unaudited revenue growth of 33% to €13.1b, while operating profit improved by 32% to €1.5b. At 11.3%, group operating margin was similar to the comparative period.
In the UK homewares market, Steinhoff owns retail brands Harveys and Bensons for Beds, plus trade brands including Slumberland, Myer's, Dunlopillo and Relyon.
The integrated household goods segment alone increased total revenue by 10% to €8.4b, operating profit increasing by 14% to €1.1 b – an improved margin which, reports the group, can be attributed to the continued growth in scale of the retail operation, "combined with its vertical integration capability and synergies resulting from its central logistics and sourcing divisions".
In constant currency terms, Steinhoff's revenue increased by 17%, attributed to increased market share positions and the expansion of its store footprint.
The UK accounts for 9% of Steinhoff's total household goods retail revenue. Revenue grew by 14%, whilst operating profits on household goods rose by 5%, and operating margin by 8.7%.
"The UK operations generated revenue growth of 14% to €747m," reads the report. "This includes the contribution from the net 16 new stores opened during the year, and growth of 8% in like-for-like terms.
"This performance can be attributed to a solid British bedding market, combined with the long-term strategy of optimising and reducing the size of the store estate. The refurbishment of the store estate continued, with 78 stores refurbished during the period, bringing the total number of refurbished stores to 81% of the total store estate. In addition, the Harveys brand was refreshed, and the re-zoning of store interiors has proven to resonate positively with customers."
Steinhoff points out that the Brexit referendum has created uncertainty in the business community and financial market: "While the effect of this decision on consumer demand across Europe remains uncertain, the devaluation of the pound sterling may also result in an unfavourable effect when translating our businesses’ earnings reported in euro. Our retail business in the UK currently contributes approximately 5% to group operating profit, and is substantially vertically integrated. Group bedding and upholstery manufacturing is located within the UK, which should protect gross margins to some degree against prolonged sterling weakness. However, the businesses remain exposed to the dollar and other currencies in many other product categories, which could have an adverse effect on future margin."
