15225 replies to this topic

[Tom]

A pump to pay out monies? Nay Bru I don't see that happening

If all claims r dropped? Ya I'd say pomp time.... I don't see that happening either

 

It's a 22 catch in another 22 catch.

[Lionelza1]

A pump to pay out monies? Nay Bru I don't see that happening

If all claims r dropped? Ya I'd say pomp time.... I don't see that happening either

[Investment novice]

Pls contact steinhoff investor relations
According to an analyst there is sens due today or monday on legal progress....may see a pump. I have emailed steinhoff have not received a response. I domt see anything in the calender.

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[andi222]

Andi where do you see the NAV when all the dust settles?

 

Haha DTD that's a tough question. Unfortunately there are still too many factors which are unpredictable and thus this share could still go either way. However if management can follow their plan I can still see a positive outcome. 

[DayTraderDad]

DeltaHedge, the last two points on your list are misleading.

Cash generated from operations came in at 476 Million €.

Secondly Steinhoff had the same going concern statement in the 2019 Annual report. So nothing new. They need to be very cautious due to the reasons they listed.

Thirdly, yes equity does lie at a negative 4.5 billion €. However there are unrealised tax losses of 4.3 billion €. As well as the MF equity which is currently lying at 1.4 billion €. Just these two points will have a material impact on equity going forward. Also once Pepco and Greenlit are IPO'd you will see a significant increase in equity.

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Andi where do you see the NAV when all the dust settles?

[andi222]

DeltaHedge, the last two points on your list are misleading.

Cash generated from operations came in at 476 Million €.

Secondly Steinhoff had the same going concern statement in the 2019 Annual report. So nothing new. They need to be very cautious due to the reasons they listed.

Thirdly, yes equity does lie at a negative 4.5 billion €. However there are unrealised tax losses of 4.3 billion €. As well as the MF equity which is currently lying at 1.4 billion €. Just these two points will have a material impact on equity going forward. Also once Pepco and Greenlit are IPO'd you will see a significant increase in equity.

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[DayTraderDad]

Guys I always believed in the management of Steinhoff and though they would do a good job. But guys even I have underestimated how genius they are and how perfectly they have planned this whole recovery thing.

 

Let me start with the highlights of the first half of this year:

- Revenue increased even though COVID19 apparently should have had an material negative impact.

- EBITDA increased by 80% to 702 Million €. Yes a big part is from IFRS16 but this is the new standard and it will reflect the EBITDA going forward. 

- MF has produced a operating profit of 107 Million €. It just came out of Chapter 11 and now they produce such numbers.

- Cash generated from operations shot up to 472 Million €. 

- Repayment of 300 Million € of loans

 

So even though Steinhoff has posted a huge loss once again and Equity reduced once again they are on the right way. Again releasing the proposal before the "terrible" HJ 2020 results is no suprize to me.

 

Now coming back to my theory regarding Steinhoff pleading poverty. I posted the following early in July:

 

"As mentioned before in my posts Steinhoff is pleading poverty. They are basically trying to show everyone that they do not have any value left in the company.

Examples:

- MF has been chosen to be equity accounted for. The value at the moment in the books lies at 9 Million €. However we all know that MF after Chapter 11 had an equity of around 1.5 billion $

- Conforama, Management knows that Conforama has a negative equity value of around 1.8 billion €. Why are they still consolidating Conforama. They could have made the decision to also equity account for Conforma. The decision was in the grey area according to IFRS. If Steinhoff would have equity accounted MF an additional 1.8 billion € equity would be on the books of Steinhoff.

- SA property portfolio and hemisphere. They have valued the properties way below current fair values if you have a look at the annual financial statements. Around 0.5 to 1 billion € to low.

- Pepkors share price is kept artificially low to show that its not worth anything. Also the mini issue of shares was to depress the price in my opinion. At the current share price Pepkor is trading at a EBITDA multiple of 5. That is a joke. Back when it was listed it was trading at an EBITDA multiple of 14. 

- Deferral of the IPO of the Pepco Group. This was not because of Corona in my opinion. They are deferring this IPO because they know exactly they will obtain billions and people will be able to see what its worth actually. The growth potential of this company is enormous.

- They have written off basically all of their Goodwill (Just kept Pepkor and Pepco) and immaterial assets even though they where not required to. Again they where in the grey area and made the decision to write down billions.

- Material counter claims- have you noticed that no big claim has been launched against third parties? Yes, they have launched some minor cases against Jooste etc but the amounts where super low. Steinhoff can and will launch legal claims against auditors, banks other advisors etc. Watch out after the global settlement, they want to see how big the amount will be which they will use to draft counter claims.

- Tax related items- Have you heard of anything claiming back taxes yet? No, because they are also deferring this because all the write offs will lead to huge tax claims for prior periods. Watch out for this after the global settlement. They have just included the a disclaimer in the audit report that tax items still need to be solved surprise surprise.

- many more points to consider as well.

 

I think this month is the absolute best time to get this global settlement under the table. I cannot see them pushing the value on the books lower then it currently is. It was also no surprise to me that they have moved the announcement of HJ 1 2020 results to end of July. Also it was crucial that the first shareholder claim was won by Steinhoff last month.

 

 

All the points listed above are still valid and there are now new points which strengthen my theory. These are:

 

- They have now booked in a provision through P/L of around 900 Million €. The fact that they had to raise this provision was actually an event after the reporting period so they were not obliged according to IFRS to raise this provision in these HJ results, However they have chosen to do this. Again this reflects negative on the company.

- They have by "accident" forgot to show the possible tax losses (assets) amounting to 4.3 Billion €. Guys 4.3 billion € of possible tax losses are flying around!!

- They have written down MF to 4 Million € carrying value even though they have generated a operating profit of 107 Million €?? What I think is once the whole legal claims are settled Steinhoff will gain control again to consolidate MF again and that would generate a huge equity gain for us.

 

Again just my point of view and no recommendation to buy or sell shares.

Thanks Andi excellent post I totally agree!!

[DeltaHedge]

Here's one of the analysts thoughts on Seeking Alpha - Extract below:

I do favor Andi's theory of "Pleading Poverty" as if they were really at the point of no return then surely the plug would have already been pulled? 

 

I am quite heavily invested in this stock, good luck all! 

 

 

 

 

Sarel Oberholster

Contributor

Comments792 | Following

Author’s reply »

 

HY1 2020 initial observations:

 

1. It is to end March 2020 so the Covid-19 impact is mostly only for March 2020.

 

2. Pepco and Poundland are doing well.

 

3. Pepkor is under performing given its history.

 

4. MF is looking good.

 

5. Conforama is standing on the brink.

 

6. Shift to an operating loss due to a provision raised for litigation settlement as expected. Removing the other expenses shows an improvement of around 23% in operating profit.

 

7. Finance costs keeps escalating.

 

8. The depreciation of the ZAR against the Euro and a revaluation of the Pepkor Ltd investment is to blame for the currency loss but it will nevertheless weaken the Balance Sheet.

 

9. Negative Equity is now Eur4.5bn, which seems to me has already reached a point of no return before the full implications of Covid-19 and Conforama has reached Steinhoff.

 

10. Trade credit continues to fall.

 

11. Cash flow is still negative and constrained, this round helped by the sale of Unitrans.

 

12. The Board no longer says that Steinhoff is a going concern: "These facts therefore cast significant doubt upon the Company and Group’s ability to continue as a going concern beyond

 

the foreseeable future." There is no longer any equity and Steinhoff now continue only by the grace of creditors.

 

 

Sarel Oberholster

Contributor

Comments792 | Following

Author’s reply »

 

HY1 2020 initial observations:

 

1. It is to end March 2020 so the Covid-19 impact is mostly only for March 2020.

 

2. Pepco and Poundland are doing well.

 

3. Pepkor is under performing given its history.

 

4. MF is looking good.

 

5. Conforama is standing on the brink.

 

6. Shift to an operating loss due to a provision raised for litigation settlement as expected. Removing the other expenses shows an improvement of around 23% in operating profit.

 

7. Finance costs keeps escalating.

 

8. The depreciation of the ZAR against the Euro and a revaluation of the Pepkor Ltd investment is to blame for the currency loss but it will nevertheless weaken the Balance Sheet.

 

9. Negative Equity is now Eur4.5bn, which seems to me has already reached a point of no return before the full implications of Covid-19 and Conforama has reached Steinhoff.

 

10. Trade credit continues to fall.

 

11. Cash flow is still negative and constrained, this round helped by the sale of Unitrans.

 

12. The Board no longer says that Steinhoff is a going concern: "These facts therefore cast significant doubt upon the Company and Group’s ability to continue as a going concern beyond

 

the foreseeable future." There is no longer any equity and Steinhoff now continue only by the grace of creditors.

 

[Tom]

The "Impact assessment of the new IFRS 16 : Leases" which is 1.865 billion euros is a lot (but mostly once off), and why this HY results not the FY19 just a month ago.

 

The fiance costs has jumped from 482 million euros to 698 million euros for the 6 months.

 

To report 2.218 billion euros comprehensive losses for the 6 months period is a lot.

 

[andi222]

Guys I always believed in the management of Steinhoff and though they would do a good job. But guys even I have underestimated how genius they are and how perfectly they have planned this whole recovery thing.

 

Let me start with the highlights of the first half of this year:

- Revenue increased even though COVID19 apparently should have had an material negative impact.

- EBITDA increased by 80% to 702 Million €. Yes a big part is from IFRS16 but this is the new standard and it will reflect the EBITDA going forward. 

- MF has produced a operating profit of 107 Million €. It just came out of Chapter 11 and now they produce such numbers.

- Cash generated from operations shot up to 472 Million €. 

- Repayment of 300 Million € of loans

 

So even though Steinhoff has posted a huge loss once again and Equity reduced once again they are on the right way. Again releasing the proposal before the "terrible" HJ 2020 results is no suprize to me.

 

Now coming back to my theory regarding Steinhoff pleading poverty. I posted the following early in July:

 

"As mentioned before in my posts Steinhoff is pleading poverty. They are basically trying to show everyone that they do not have any value left in the company.

Examples:

- MF has been chosen to be equity accounted for. The value at the moment in the books lies at 9 Million €. However we all know that MF after Chapter 11 had an equity of around 1.5 billion $

- Conforama, Management knows that Conforama has a negative equity value of around 1.8 billion €. Why are they still consolidating Conforama. They could have made the decision to also equity account for Conforma. The decision was in the grey area according to IFRS. If Steinhoff would have equity accounted MF an additional 1.8 billion € equity would be on the books of Steinhoff.

- SA property portfolio and hemisphere. They have valued the properties way below current fair values if you have a look at the annual financial statements. Around 0.5 to 1 billion € to low.

- Pepkors share price is kept artificially low to show that its not worth anything. Also the mini issue of shares was to depress the price in my opinion. At the current share price Pepkor is trading at a EBITDA multiple of 5. That is a joke. Back when it was listed it was trading at an EBITDA multiple of 14. 

- Deferral of the IPO of the Pepco Group. This was not because of Corona in my opinion. They are deferring this IPO because they know exactly they will obtain billions and people will be able to see what its worth actually. The growth potential of this company is enormous.

- They have written off basically all of their Goodwill (Just kept Pepkor and Pepco) and immaterial assets even though they where not required to. Again they where in the grey area and made the decision to write down billions.

- Material counter claims- have you noticed that no big claim has been launched against third parties? Yes, they have launched some minor cases against Jooste etc but the amounts where super low. Steinhoff can and will launch legal claims against auditors, banks other advisors etc. Watch out after the global settlement, they want to see how big the amount will be which they will use to draft counter claims.

- Tax related items- Have you heard of anything claiming back taxes yet? No, because they are also deferring this because all the write offs will lead to huge tax claims for prior periods. Watch out for this after the global settlement. They have just included the a disclaimer in the audit report that tax items still need to be solved surprise surprise.

- many more points to consider as well.

 

I think this month is the absolute best time to get this global settlement under the table. I cannot see them pushing the value on the books lower then it currently is. It was also no surprise to me that they have moved the announcement of HJ 1 2020 results to end of July. Also it was crucial that the first shareholder claim was won by Steinhoff last month.

 

 

All the points listed above are still valid and there are now new points which strengthen my theory. These are:

 

- They have now booked in a provision through P/L of around 900 Million €. The fact that they had to raise this provision was actually an event after the reporting period so they were not obliged according to IFRS to raise this provision in these HJ results, However they have chosen to do this. Again this reflects negative on the company.

- They have by "accident" forgot to show the possible tax losses (assets) amounting to 4.3 Billion €. Guys 4.3 billion € of possible tax losses are flying around!!

- They have written down MF to 4 Million € carrying value even though they have generated a operating profit of 107 Million €?? What I think is once the whole legal claims are settled Steinhoff will gain control again to consolidate MF again and that would generate a huge equity gain for us.

 

Again just my point of view and no recommendation to buy or sell shares.

 

 

 

[Everlearning]

Tom, like I said, such bad journalism, absolute selective reporting without the true picture being reported !!!

 

Had the journalist taken the trouble to read and understand the results, they would have contectualized the "1,7bn loss" and produced a more balance informed report!

 

Whats your view Andi ???

[Tom]

Steinhoff’s first-half loss more than doubles to $1.7bn

It reported a small rise in sales to 6.2 billion euros from 6.1 billion euros a year earlier

https://www.moneyweb...ubles-to-1-7bn/

[Tom]

Wiese has no incentive to accept the settlement because he will be getting nearly nothing, because his creditors have and will put a court case claim on any money he might get, already Steinhof said they won't pay until this is unappealably settled.

So why would he accept to settle for nothing, and court cases might still come on him from various parties, and he didn't read the PwC report yet in order to see where does he stand.

And his claim is 59 billion euros (not 9).

Edited by Tom, 30 July 2020 - 04:22 PM.

[Investment novice]

Can see the share price hovering....the news already priced in. Lots of trades and buys...coming through in the window. Think people waiting for wiese announcement. Lots going on in the back ground preparing for agm...should see lots of speculative traders coming in now to ride the settlement news...lookout for a nice bump....the share price moves oposite to how we remember ...before was a pump and dump...now we have consilidation and small bumps up
......any thoughts on when wiese is likely to settle...???

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[Everlearning]

Totally squed and misleading reporting. This journalist has not bothered to read and understand the consolidated balance sheet/income statement against the backgound of what is taking place.

 

The fact of the matter is that the 882 Euros is included in the P/L (see note 3 on page 52) as a provision for settlement, in addition, provision for lease laibilities of 115 Euros has been included, this totalling 997 ! certainly not a true "loss" ! It would ultimately result in an adjustment of the balance sheet and is not a recurring item !!!  

 

True Loss is closer to 500 Euros, which is not bad given the history, or am I missing something ???

 

Just irritated by irresponble reporting !!!  

[Tom]

Steinhoff’s first-half loss doubles to €1.5bn

https://www.business...oubles-to-15bn/

[Tom]

And on top of that the  "pro forma" new story.

[Everlearning]

Although 'cash' provision of 882 Euros, it is intended to fund half this by way of Pepkor shares, hence cashflow impact is only 441.

 

Given the period these results refer to, it was not neccesary to reflect this proposal but, as Andi pointed out, I also think that management wants to paint the worst picture possible in its strategy to get settlement on the litigation.

 

Great cash generating underlying businesses, 110,000 employees, can't wait to see the true reflection and value of the Company once litigation has been put to bed and creditors have refinanced/renegotiated!

[Investment novice]

I think we can expect the uptrend from this strong base thats formed.

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[Tom]

They putting a litigation settlement proposal provision of 882 million euros on the six months ended March 2020, despite it wasn't made that time, neither paid that time, and still not even certain if it will be paid.

 

And even if it will be paid, it will most probably be even after the the financial year 2020 (end of Sep 2020).

Edited by Tom, 30 July 2020 - 01:14 PM.