15225 replies to this topic

[Tiekkie]

Splitting up the pot: Steinhoff offers 5.5% payout to market purchase claimants to settle https://www.news24.c...settle-20210302

[Tiekkie]

The share price broke the R1,90 bottom...tested it a few times...just look like the momentum is to the bottom in the short-term...

and there is no news for the forseable future until end of June...what will stimulate the share to the upside ?

[Tiekkie]

The share price broke the R1,90 bottom...tested it a few times...just look like the momentum is to the bottom in the short-term...

[DayTraderDad]

I guess the question is where is the price going in the short-term term, I made a prediction of 2.30....now it looks like 1.40.....any takers....2,30 was based on good results.....guess Mr market knows better

Why are you expecting R1.40? All news is out so until May or June not expecting much down side. All the institutions will have to start to leak their wounds they not going to get more money. Cannot see how less than 10% of the share holders going to derail for the other 90%!!!

[Tiekkie]

I guess the question is where is the price going in the short-term term, I made a prediction of 2.30....now it looks like 1.40.....any takers....2,30 was based on good results.....guess Mr market knows better

[DayTraderDad]

Hi Guys, so I had a good weekend to read up on the financials. There were some surprises to me.

However the plan of management is making more sense step by step. As I have previously mentioned Steinhoff’s management needs to plead poverty to get these claims out of the way. And this is exactly what they have done.

So let’s first look at the major loss and where it’s coming from. Steinhoff has reported another loss of 2.2 billion Euro. This looks horrible but it is made up of the following:

• 330 Million Impairment on Goodwill. Even though the units are all operating positive management has decided to write this down.
• Over 1 Billion provisions raised. (Remember only half of this will be settled in cash if the global settlement gets approved)
• Close to 1.2 Billion finance costs. (Most of this will be capitalized) (Thus no cash outflow for now)

All these points above are being addresses at the moment.

Big surprise for me was the Greenlit and MF. Obviously Pepco and Pepkor are gems but who would have thought that Greenlit and MF could be turned around like this?

Now looking at the equity. Here we are sitting at a negative 4.2 Billion Euros. That’s a crazy number. But please have a look at my previous posts where I explain in detail where this amount came from. But for now how will Steinhoff be able to get rid of this huge negative equity?

Just have a look at page 134 on unrecognized tax losses. This amount has increased to 9.2 Billion Euros. Also read what they have disclosed there. It was management choice not to recognize any of these. Guys think again, all units are making profits at the moment with an EBITDA of more than 1 billion euro per annum. Soon, very soon management will start to recognize these deferred tax assets.

Now another example. MF has increased the EBITDA significantly and they are valued at 5 Million in the books. Again this is management choice to account for it in this way.

 

Now the key highlights for me are:

• Revenue stable even though shops were closed due to Covid etc.
• Cash generated from operations at close to 1.2 Billion Euros. Guys 1.2 Billion cash generated. That’s crazy.
• Net debt has been reduced for the first time since 2017. And lies at 9.4 billion.
• Greenlit and MF great performance
• Audit opinion only has the following key items left to be resolved before we get a clean audit opinion (Only 4 items remain) (2019 we had 6) (2018 we had 8):
  • Going concern (Will be gone once Global settlement is implemented)
  • Uncertainty of litigation (Will be gone once Global settlement is implemented)
  • Audit evidence Conforama (Conforma sold so should be gone for 2021)
  • Translation reserve (Can be solved with audit evidence)

Now a lot of people have asked me what levels of debt do I see reasonable and what values would I give the underlying businesses.

I try to keep it simple: Net debt should be a maximum of 3x EBITDA. So the net debt should not be more then 3-4.5 Billion in future.

Underlying value of the businesses: Here also I will keep it simple and take a market average of an EBITDA multiple of 12. EBITDA 2020 was 1 Billion. This would give us a reasonable value of around 12 Billion euro. (Excl. MF) A Pepco IPO should thus not be below 411 EBITDA*12= 5 Billion Euro for the Pepco Group.

So there is still huge value in the operating units.

Guys so far it looks good, also the phrase that the global settlement is more likely to happen then not to happen gives me hope. Once the litigation are gone Steinhoff can start its new future.

Again this is just my personal opinion, no recommendation to trade in this share.

Thanks Andi great post!!!

[DayTraderDad]

Great idea to do a rights issue when the share price is at an all time high and at a maximum P:E, not great or even an option at the current share price.

 

Company definately has a focused plan, will provide details of the Pepco IPO and valuation "within the next 2 months".! Also, knowing how cautious they have been in the past with providing details, thery would not be making any IPO noises now if they were not sure of the success of the GS suceeding.

 

By next year this time, I see I totally different Steinhoff. I see

1. Global Settlemnt implemented

2. Debt refinanced

3. Pepco IPO executed

4. Australian Business IPO executed.

5. Audit report "Un-qualified"

6. Back on SDAX 

7 Upgrade by ratings agencies

8 Relook at how MFirm is accounted for in the finacials and not just as "equity".

 

Excited to see where the price will then be,

 

Andi, have you managed to disect the Annual Report and the first Qtr results. Would love to have you valued opinion of how you see the company at the moment .

 

Lets stay positive boys!

Well said I saw that already in 2018. It will take time but there is going to be good rewards!!!

Edited by DayTraderDad, 01 March 2021 - 08:18 PM.

[Tiekkie]

https://www.bloomber...le-legal-claims this is extremely interesting, I forgot about this option...I'd they took out insurance against this...then the companies liability would be smaller

[CasualTrader]

Well well it sound they have a plan and you can see they are sticking to it and that there is a light in the end of the tunnel

Jammer ek het dit gemis. Ek altyd geluister na RSG Geldsake op pad huis toe van die werk af. Nou dat ek van die huis af werk mis ek dit. Kan wel na die potgooi luister.

Edited by CasualTrader, 01 March 2021 - 07:28 PM.

[Daytrader01]

Well well it sound they have a plan and you can see they are sticking to it and that there is a light in the end of the tunnel

[Daytrader01]

RSG is speaking to and about SNH now about there finance

[Squideye]

Steinhoff dok R30 m. op vir Valke se ondersoek @ https://docdro.id/oOgX88V

[Bushmanbob]

Thanks for sharing your valuable insights Andi

[Sleepwa123]

Thanks Andi! You're a legend.

[Tolly12]

Hi Guys, so I had a good weekend to read up on the financials. There were some surprises to me.

However the plan of management is making more sense step by step. As I have previously mentioned Steinhoff’s management needs to plead poverty to get these claims out of the way. And this is exactly what they have done.

So let’s first look at the major loss and where it’s coming from. Steinhoff has reported another loss of 2.2 billion Euro. This looks horrible but it is made up of the following:

• 330 Million Impairment on Goodwill. Even though the units are all operating positive management has decided to write this down.
• Over 1 Billion provisions raised. (Remember only half of this will be settled in cash if the global settlement gets approved)
• Close to 1.2 Billion finance costs. (Most of this will be capitalized) (Thus no cash outflow for now)

All these points above are being addresses at the moment.

Big surprise for me was the Greenlit and MF. Obviously Pepco and Pepkor are gems but who would have thought that Greenlit and MF could be turned around like this?

Now looking at the equity. Here we are sitting at a negative 4.2 Billion Euros. That’s a crazy number. But please have a look at my previous posts where I explain in detail where this amount came from. But for now how will Steinhoff be able to get rid of this huge negative equity?

Just have a look at page 134 on unrecognized tax losses. This amount has increased to 9.2 Billion Euros. Also read what they have disclosed there. It was management choice not to recognize any of these. Guys think again, all units are making profits at the moment with an EBITDA of more than 1 billion euro per annum. Soon, very soon management will start to recognize these deferred tax assets.

Now another example. MF has increased the EBITDA significantly and they are valued at 5 Million in the books. Again this is management choice to account for it in this way.

 

Now the key highlights for me are:

• Revenue stable even though shops were closed due to Covid etc.
• Cash generated from operations at close to 1.2 Billion Euros. Guys 1.2 Billion cash generated. That’s crazy.
• Net debt has been reduced for the first time since 2017. And lies at 9.4 billion.
• Greenlit and MF great performance
• Audit opinion only has the following key items left to be resolved before we get a clean audit opinion (Only 4 items remain) (2019 we had 6) (2018 we had 8):
  • Going concern (Will be gone once Global settlement is implemented)
  • Uncertainty of litigation (Will be gone once Global settlement is implemented)
  • Audit evidence Conforama (Conforma sold so should be gone for 2021)
  • Translation reserve (Can be solved with audit evidence)

Now a lot of people have asked me what levels of debt do I see reasonable and what values would I give the underlying businesses.

I try to keep it simple: Net debt should be a maximum of 3x EBITDA. So the net debt should not be more then 3-4.5 Billion in future.

Underlying value of the businesses: Here also I will keep it simple and take a market average of an EBITDA multiple of 12. EBITDA 2020 was 1 Billion. This would give us a reasonable value of around 12 Billion euro. (Excl. MF) A Pepco IPO should thus not be below 411 EBITDA*12= 5 Billion Euro for the Pepco Group.

So there is still huge value in the operating units.

Guys so far it looks good, also the phrase that the global settlement is more likely to happen then not to happen gives me hope. Once the litigation are gone Steinhoff can start its new future.

Again this is just my personal opinion, no recommendation to trade in this share.

 

Hi,

 

so you see in the next future the following Steinhoff structure/ownership?

 

Pepco (50%, after the IPO)

Pepkor (55%, after Global Settlement, form current 68%)

MF (50%)

Greenlit (50%, after the IPO)

LIPO (100%)

 

Based on current Net Debt (9.4 Bil €), the potential cash from IPOs (2,5 Bil € from Pepco and 500 Mil € from Greenlit) and the sales of remainig part of Conforama, I think Net Debt level could arrive at 6 Bil €.

We have to remind that the IPO’s for sure are very important to obtain cash and give visibility to the brand, but they also reduce the ownership and their ‘benefit’, EBITDA in particular.

I’m still worried that above new Steinhoff structure (even with a debt interest rate reduction), won't be able to manage that huge remaining debt.

Happy to see different and constructive views from other Users.

[Everlearning]

Andi,

 

Thanks for summing this up for us so consisely.

Appreciate your perspective and share your view. We've been patient so long and now we can see the results of the turnaround starting to materIalize. The report and financials reflect the clever strategy of management and with their milestones being achieved, we will see future method being used to report financials beiing a little different.

 

Excited with the ride although it some time feels like it's taking damn forever!

[andi222]

Hi Guys, so I had a good weekend to read up on the financials. There were some surprises to me.

However the plan of management is making more sense step by step. As I have previously mentioned Steinhoff’s management needs to plead poverty to get these claims out of the way. And this is exactly what they have done.

So let’s first look at the major loss and where it’s coming from. Steinhoff has reported another loss of 2.2 billion Euro. This looks horrible but it is made up of the following:

• 330 Million Impairment on Goodwill. Even though the units are all operating positive management has decided to write this down.
• Over 1 Billion provisions raised. (Remember only half of this will be settled in cash if the global settlement gets approved)
• Close to 1.2 Billion finance costs. (Most of this will be capitalized) (Thus no cash outflow for now)

All these points above are being addresses at the moment.

Big surprise for me was the Greenlit and MF. Obviously Pepco and Pepkor are gems but who would have thought that Greenlit and MF could be turned around like this?

Now looking at the equity. Here we are sitting at a negative 4.2 Billion Euros. That’s a crazy number. But please have a look at my previous posts where I explain in detail where this amount came from. But for now how will Steinhoff be able to get rid of this huge negative equity?

Just have a look at page 134 on unrecognized tax losses. This amount has increased to 9.2 Billion Euros. Also read what they have disclosed there. It was management choice not to recognize any of these. Guys think again, all units are making profits at the moment with an EBITDA of more than 1 billion euro per annum. Soon, very soon management will start to recognize these deferred tax assets.

Now another example. MF has increased the EBITDA significantly and they are valued at 5 Million in the books. Again this is management choice to account for it in this way.

 

Now the key highlights for me are:

• Revenue stable even though shops were closed due to Covid etc.
• Cash generated from operations at close to 1.2 Billion Euros. Guys 1.2 Billion cash generated. That’s crazy.
• Net debt has been reduced for the first time since 2017. And lies at 9.4 billion.
• Greenlit and MF great performance
• Audit opinion only has the following key items left to be resolved before we get a clean audit opinion (Only 4 items remain) (2019 we had 6) (2018 we had 8):
  • Going concern (Will be gone once Global settlement is implemented)
  • Uncertainty of litigation (Will be gone once Global settlement is implemented)
  • Audit evidence Conforama (Conforma sold so should be gone for 2021)
  • Translation reserve (Can be solved with audit evidence)

Now a lot of people have asked me what levels of debt do I see reasonable and what values would I give the underlying businesses.

I try to keep it simple: Net debt should be a maximum of 3x EBITDA. So the net debt should not be more then 3-4.5 Billion in future.

Underlying value of the businesses: Here also I will keep it simple and take a market average of an EBITDA multiple of 12. EBITDA 2020 was 1 Billion. This would give us a reasonable value of around 12 Billion euro. (Excl. MF) A Pepco IPO should thus not be below 411 EBITDA*12= 5 Billion Euro for the Pepco Group.

So there is still huge value in the operating units.

Guys so far it looks good, also the phrase that the global settlement is more likely to happen then not to happen gives me hope. Once the litigation are gone Steinhoff can start its new future.

Again this is just my personal opinion, no recommendation to trade in this share.

 

[CasualTrader]

thanks for you views, I guess STeinhoff also does not have to issue shares as there are 2 IPO's happening. Can they actually use the proceeds from the Pepco and the Aus IPO's to get them out of the dwang?

 

[Polla]

Just a question from my side. I see Aveng is doing a rights issue which will assist with settling some of their debt. Why is this not an option for Steinhoff. Is it because no one will actually take up the rights offer?

In Aveng's case they are doing a right issue to the value of R300mil, with which they will settle approx R1bill of debt.  This will bring all outstanding debt down to manageable levels that will be able to be serviced and settled over the next three years.  The rights issue is being done at R0.015/share with 20bill shares being issued.  Thus meaning doubling almost the amount of shares in the market, but at a price which is actually on average half the price which was trading at around R0.03/share.  The rights issue was also done at a ratio of 1.0312 shares for every share held.

In Aveng's scenario, if a shareholder exercise 100% of his rights, the shareholder actually only stands to gain and the company will be placed in a better position.  What counts in their favor is that the two biggest shareholders subscribed to the rights issue and brought relative certainty that the full R300mil will be able to be raised. If I remember correctly the two biggest shareholders subscribed to about 63% of all rights.

I believe it would be more difficult for Steinhoff to accomplish the same, especially with the creditors currently being effectively in control while the restructuring takes place. But also because currently the spread of shareholders is of such a diverse spread that it would be very difficult to ascertain whether the end goal would be achieved by a rights issue.

Just my opinion

[Everlearning]

Great idea to do a rights issue when the share price is at an all time high and at a maximum P:E, not great or even an option at the current share price.

 

Company definately has a focused plan, will provide details of the Pepco IPO and valuation "within the next 2 months".! Also, knowing how cautious they have been in the past with providing details, thery would not be making any IPO noises now if they were not sure of the success of the GS suceeding.

 

By next year this time, I see I totally different Steinhoff. I see

1. Global Settlemnt implemented

2. Debt refinanced

3. Pepco IPO executed

4. Australian Business IPO executed.

5. Audit report "Un-qualified"

6. Back on SDAX 

7 Upgrade by ratings agencies

8 Relook at how MFirm is accounted for in the finacials and not just as "equity".

 

Excited to see where the price will then be,

 

Andi, have you managed to disect the Annual Report and the first Qtr results. Would love to have you valued opinion of how you see the company at the moment .

 

Lets stay positive boys!