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#21 DayTraderDad

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Posted 19 May 2019 - 02:21 PM

Hi Captain,

Thank you for the great post and for sure when dealing with SNH share one has to keep on the seat belt at all times!!!

I agree my figures may be generous but I view it from a different angle.

For me the quicker Conforama and Greenlit are sold down the same as MF the better for SNH.

I recalculated and this time from the various updates I broke the figures down to Quarters and forecaster the Q2 -2019 and come to the following: (table)

UNIT Revenue Margin EBITDA
Pepkor Europe 1747 8.40% 147
Other 440 4.50% 20
Pepkor SA 2396 9.00% 216
Conforama 1530 2.50% 38
Greenlit 637 5.20% 33
Totals 6750 454

A Revenue of E6750 and EBITDA of E454 (sustainable) for H1 - 2019

I am aware the previous margins of 3.8 and 4% the way I see it was the drag from MF and UK.

In the H1-2018 UK has a EBITDA of -10 and MF -94 so if one removes that from the Sustainable EBITDA of 340
340+10+94 = 440

Anyway lots of figures but the financials will tell the truth.

Highlight fro Q1=2019 update:

"A further quarter of strong revenue growth in Pepkor
Europe is a reflection of a clear growth strategy
(currently centered on PEPCO), unwavering focus on
execution, and the Group’s market-leading position
within a core discount segment that is increasingly
attractive to a wide range of customers. The positive
early progress in Dealz provides further growth
potential.
The first quarter, which typically represents
approximately a third of full-year revenue, reported
revenue growth of 15%, driven primarily by continued
expansion of the PEPCO format in central Europe. At
31 December 2018, Pepkor Europe traded from 2 451
stores, an increase of 12% from 31 December 2017."

Regards,
DTD
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#22 Captainfrom82

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Posted 19 May 2019 - 07:14 AM

Interesting point IN.

For me much is talked about the debt and the high interest rate but not much is said that is until 2021 and interest paid
per kind.

I looked at it a number of times and if one breaks down the debt I get the following:


SEAG CVA: 5.2 bil and SFHG CVA: 2.7 bil Total CVA value: 7.9 bil

Debt distribution:

MF - 2,9 bil
Conforama: 1.7 bil
Total: 4.6 bil

So if these two identities take the debt to their books the debt left with SNH is 7.9 - 4.6 = 3.3 bil.
The balance sheet will also be much stronger once that debt is removed the way I calculate NAV to be from E1 to E2
depending how they going to deconsolidate.

As per my estimates the EBITDA for 2019 (excluding one off entries)should be close to 1 bil that gives a SNH Debt/EBITDA
of 3.3 which quite sure they will be able to restructure that debt at a much lower interest by 2021 say about 3% to 4% in
view that looks like the future is again lowering of interest rates.

So if one breaks it up for me does not look that bad any way my thoughts.

 

Hi DTD,

 

Below details are my opinion.  I am not a registered FSP in South Africa ...blah blah blah...

 

Regarding the restructuring as it relates to debt, my fellow investment colleagues and I have been speculating in this regard for well over six months.  We have run various permutations including trying to get a consensus valuation of MF Confo, and Greenlit (with the latter being the post difficult).  Clearly moving from consolidation to equity is changing the NAV materially.  This position is greatly magnified when the subsidiaries take on the external debt on their own balance sheets as will be seen.  Further the significantly lower debt will be able to be serviced (if Steinhoff chooses).  However, our opinion is that there will be still further disposals of some of their non-core holdings, and possibly even their core-holdings in Pepkor Africa (PA) and Pepkor Europe (PE). 

 

However, we remain of the opinion that like most if not all retailers, Steinhoff will realize its value from the revenue and earnings.  In this regard, we are concerned at the deteriorating circumstances in this regard. 

 

We have noted Seeking Alpha's, DTD's and Andi222's assessments, and believe that these are perhaps on the optimistic side as they pertain to 2019 and 2020. 

 

Steinhoff guides in their 2017 AFS  as follows:

 

"...In the 2018 and 2019 financial years, we
expect that our consolidated net sales will
be reduced by the impact of several factors
including a number of disposals, a weaker
global economy and stronger competition
in our markets. These factors have been
compounded by the reputational damage
associated with the disclosures in December
2017, constraints from supplier credit lines
and the related uncertainty associated with
the ongoing investigations"

 

Clearly they are warning of declined revenues.  They go on to further state:

 

"...We expect that operating expenses,
excluding the impact of currency exchange
rates, will be significantly higher than in 2017
due to the substantial increase in adviser
costs and professional fees associated with
the investigation and restructuring effort,
which has been detailed and extensive. We
shall therefore experience an adverse impact
on our consolidated operating income,
before impairments, in both 2018 and 2019
financial years."

 

Lastly, they say:

"...net financial expenses,
excluding the impact of currency exchange
rates, to be higher than in 2017. This will
adversely affect net income"

 

Steinhoff themselves have taken tough action (restricting expenses, delaying CAPEX, reducing admin, etc).

 

But, we need to assume the brace position as the markets may react extremely negatively in a knee-jerk reaction.  However, the premise should actually not be based on Steinhoff's historical earnings.  It would be impossible as the earnings were overstated, and off a much larger asset ownership, and in a roaring global economy that enjoyed quantitative easing in both the US and Europe.  The global economy may be heading for tougher times.

 

The shares may tank significantly for a short period on release of the 2018 AFS. 

 

Best Regards

Captainfrom82


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#23 DayTraderDad

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Posted 18 May 2019 - 01:11 PM

Interesting point IN.

For me much is talked about the debt and the high interest rate but not much is said that is until 2021 and interest paid
per kind.

I looked at it a number of times and if one breaks down the debt I get the following:


SEAG CVA: 5.2 bil and SFHG CVA: 2.7 bil Total CVA value: 7.9 bil

Debt distribution:

MF - 2,9 bil
Conforama: 1.7 bil
Total: 4.6 bil

So if these two identities take the debt to their books the debt left with SNH is 7.9 - 4.6 = 3.3 bil.
The balance sheet will also be much stronger once that debt is removed the way I calculate NAV to be from E1 to E2
depending how they going to deconsolidate.

As per my estimates the EBITDA for 2019 (excluding one off entries)should be close to 1 bil that gives a SNH Debt/EBITDA
of 3.3 which quite sure they will be able to restructure that debt at a much lower interest by 2021 say about 3% to 4% in
view that looks like the future is again lowering of interest rates.

So if one breaks it up for me does not look that bad any way my thoughts.
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#24 Investment novice

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Posted 18 May 2019 - 10:54 AM

Question which intrigues me but not sure if we can begin to understand...
Following restructure and disclosure... Would snh debt rating improve and would their investment rating improve? I am sure that the legal issues would always be a dark cloud on the investment risk but a clear and through through agreed strategy with veb and wiese would really start to clear the way for the company to look forward.


Regarding yesterday's sens it is progress despite the stochato nature. Be fantastic if steinhof can finally beat due dates and deliver ahead of schedule.... Where is h1 2019....should have been provided simultaneously with 2018.

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#25 LarryK

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Posted 18 May 2019 - 02:42 AM

R3.12 :D


Thank you Milo, appreciate the info as always.
3,12 would do!
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#26 LarryK

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Posted 18 May 2019 - 02:15 AM

Still think they bunch sh ts..why they always release statements after jse trading but whilst Europe trading...its not on...im not involved snh..but not playing fair


Midas we closed on 148 vs Germany about 151 (xe.com exchange rate) so its not bad, but you do have a point.
The 2017 AFS release the day before elections could have been a big umbrella up the ...
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#27 DayTraderDad

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Posted 17 May 2019 - 09:52 PM

Still think they bunch sh ts..why they always release statements after jse trading but whilst Europe trading...its not on...im not involved snh..but not playing fair


Haha I could already smell a rat this afternoon at about 1350h in Frankfurt a sudden drop to 0.0928 (another blimp) so I knew bad news on the way.
By the time Sens is announced the traders have that news long time in hand so makes no difference if they announce at close or not its old news!!!
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#28 DayTraderDad

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Posted 17 May 2019 - 09:46 PM

Haha I love how they added the word FINAL in that SENS. I think they are also gatvol of changing terms and setting up these shitty documents that no one knows what they contain. I had a good laugh there. The sad part is they will either have to move financials or get it done before 18 June. Otherwise for sure no audit opinion.

Atleast we now know that the CVA is continuing and not like that article we saw the other day.

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Haha I can imagine this not fun for management!!
I wounder if there was not something they had to discuss with VEB because if changes were needed why wait until now???
Surely they must have know already a while back???

Anyway one day we will get the full story in a book!!!
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#29 Midas1

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Posted 17 May 2019 - 08:53 PM

Still think they bunch sh ts..why they always release statements after jse trading but whilst Europe trading...its not on...im not involved snh..but not playing fair
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#30 andi222

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Posted 17 May 2019 - 08:50 PM

So another 6 weeks of waiting!!! Things at SNH certainly don't move fast!!!


Haha I love how they added the word FINAL in that SENS. I think they are also gatvol of changing terms and setting up these shitty documents that no one knows what they contain. I had a good laugh there. The sad part is they will either have to move financials or get it done before 18 June. Otherwise for sure no audit opinion.

Atleast we now know that the CVA is continuing and not like that article we saw the other day.

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#31 DayTraderDad

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Posted 17 May 2019 - 08:15 PM

So another 6 weeks of waiting!!! Things at SNH certainly don't move fast!!!
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#32 DayTraderDad

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Posted 17 May 2019 - 08:14 PM

R3.12  :D


Well when I read you post ran to the wine fridge to grab a bubbly bottle!!! Hahaha
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#33 DayTraderDad

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Posted 17 May 2019 - 08:11 PM

Regarding the sens...so there goes the audit opinion(regarding going concern) for 2018? Cva only Jun 2019?

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I think market already pricing in a delay in the Financial so lets hope they can get the CVA sorted before the 18th June otherwise quite
sure they will delay publishing the results.
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#34 Machine#curious

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Posted 17 May 2019 - 07:30 PM

Regarding the sens...so there goes the audit opinion(regarding going concern) for 2018? Cva only Jun 2019?

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#35 Milo

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Posted 17 May 2019 - 06:37 PM

 

The last time there was a quick drop (5 months ago) the share also went to around R1.40 and stopped and then went back up again to await news about the financial restructuring.  I think there is enough long time and medium term share holders to keep the share from dropping further than R1.40. Why would you sell your shares anyway before confirmation of the restructuring? It might be good news and everything is depending on that.

 

 

 

Anyway I think the share is forming a nice basis and rounded bottom that is part of a massive inverted head and shoulder since 23 July 2018. With the neckline at R312. 

 

R3.12  :D


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#36 Machine#curious

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Posted 17 May 2019 - 06:35 PM

Not good?

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#37 Milo

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Posted 17 May 2019 - 06:06 PM

What does your ta tell you Milo?

The last time there was a quick drop (5 months ago) the share also went to around R1.40 and stopped and then went back up again to await news about the financial restructuring.  I think there is enough long time and medium term share holders to keep the share from dropping further than R1.40. Why would you sell your shares anyway before confirmation of the restructuring? It might be good news and everything is depending on that.

 

Anyway I think the share is forming a nice basis and rounded bottom that is part of a massive inverted head and shoulder since 23 July 2018. With the neckline at R312. 


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#38 DayTraderDad

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Posted 17 May 2019 - 05:26 PM

Steinhoff International Holdings N.V. : UPDATE ON FINAL FINANCIAL RESTRUCTURING STEPS

https://www.dgap.de/...?newsID=1150949
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#39 LarryK

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Posted 17 May 2019 - 04:46 PM

R1.40 was the bottom? Up from now


What does your ta tell you Milo?
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#40 Milo

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Posted 17 May 2019 - 01:45 PM

R1.40 was the bottom? Up from now

 


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