15225 replies to this topic

[Captainfrom82]

i would guess Oberholtzer is very wrong.  As per the balance sheet, the bulk of net assets are goodwill and intangibles, worth zero.  Of the Eur641m equity, the tangible NAV is negative Eur5800m ajusted for G&I. So technically insolvent.  There is a total of Eur1927m that is held for sale.  The stock is worth 1c offered, no buyers in my opinion. 

 

Hi Sole Trader,

 

I have been in close contact with Sarel and cannot find too much fault with his estimation of the Accounting treatment for MF and Confo.

 

I am not sure of your understanding of the Accounting treatment regarding a deconsolidation from a wholly owned subsidiary to an investment in an associate Accounting basis.  But IAS28 is pretty clear and consistent with  Sarel's interpretation and application.  He may be somewhat optimistic in the share price escalation which is a separate matter completely. 

 

Further, in DTD's prior post which was also incorrectly "corrected" by Andi222, DTD's interpretation was actually factual and Andi's was incorrect.  The Loan to Associate will reflect as an asset if that is how it is classified, and if the loan still exists.

 

A Group of fellow Investors and I have run numbers completely independently from Sarel, and our own conclusions are not too dissimilar.

 

Lastly, the whole issue of Steinhoff impairing MF to zero value will become abundantly clear on the 2019 results.  Possibly made even better of Confo is also moved from Equity accounting to Accounting as Investment in an Associate.

 

Best Regards

Captainfrom82

[DayTraderDad]

i would guess Oberholtzer is very wrong.  As per the balance sheet, the bulk of net assets are goodwill and intangibles, worth zero.  Of the Eur641m equity, the tangible NAV is negative Eur5800m ajusted for G&I. So technically insolvent.  There is a total of Eur1927m that is held for sale.  The stock is worth 1c offered, no buyers in my opinion.

Maybe he must be seeing the full picture when deconsolidation of MF and Conforama.

Not sure he would be so far out with his model!!

[SoleTrader]

i would guess Oberholtzer is very wrong.  As per the balance sheet, the bulk of net assets are goodwill and intangibles, worth zero.  Of the Eur641m equity, the tangible NAV is negative Eur5800m ajusted for G&I. So technically insolvent.  There is a total of Eur1927m that is held for sale.  The stock is worth 1c offered, no buyers in my opinion. 

Finally some good news:

Steinhoff may have potential as a deep-value play

https://www.theafric...eep-value-play/

Highlights:

"Sarel Oberholster, executive director at PurePlay Holdings in Johannesburg, argues on Seeking Alpha on 19 June that the
company has a sum of the parts valuation of about €11bn and debt of about €7.4bn. That, Oberholster calculates, means an
indicative net asset value per share of about 83.5 euro cents a share, which remains to be confirmed by the 2019 half year
report."

[Milo]

JSE, Steinhoff, SNH

 

This daily chart indicates ready to go. Target ~5.75 for wave 3. fwiw  

I wait for above 1.60 with momentum.

 

https://wavecount.bl...inhoff-snh.html

 

 

tuorum periculo

 

 Positive hope it does the same as gold chart. Would be nice if it can go to the 5.75.

[DayTraderDad]

Finally some good news:

Steinhoff may have potential as a deep-value play

https://www.theafric...eep-value-play/

Highlights:

"Sarel Oberholster, executive director at PurePlay Holdings in Johannesburg, argues on Seeking Alpha on 19 June that the
company has a sum of the parts valuation of about €11bn and debt of about €7.4bn. That, Oberholster calculates, means an
indicative net asset value per share of about 83.5 euro cents a share, which remains to be confirmed by the 2019 half year
report."

[Bubble]

Why do you view the legal liability more important than the debt? Both CW, VEB said they have no intention of destroying the company.
I find it hard to believe that any court will rule in favour of a shareholder to bankrupt the company and close its doors.
Further it will be very interesting to see what the Hawks find because still don't believe on bolts of blue lighting!!

 

CW I suspect will keep to not sinking the company. His claim is different to the rest.

 

They said that, but keep in mind VEB is not the only claim. These guys are like Unions, they keep on trying to outperform the other with more aggressive actions/demands. If one of them react more, VEB must follow. Very unknown outcome with all of them in my view.

 

But, you have a point, lets hope sanity prevails.

[DayTraderDad]

Hi DTD,

As far as I can remember through the restructuring the debt lies in SEAG so it wont be shown as an asset as it will be consolidated.

The interesting part however will be for how much they will recognise MF in the books as investment in associate.

IAS 28 states that it should be recognised at cost plus transaction fees. Subsequent recognition will include items like profit distribution and impairments.

So I think what will happen is the following with MF:
Cost: 3.2 billion Euro.
Impairment: 2.5 billion Euro
Loss for 2 years at 50%: 0.1 billion Euro.

So currently MF sits at 0 book value. Refer to my previous post.

So I think we will see a 600 Million asset booked in the books as investment in associate.

The same thing could be done for Conforma. However I dont have the numbers yet.

Thats just my thought, any other thoughts?

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Thanks Andi just querying if the debt of $3271 is in the balance sheet of MF Materials and it is also in the SNH balance sheet
is it not double accounting?

[DayTraderDad]

Andi thats a good writeup.

The issue is not debt its legal liability. And until steinhoff does not put out information which guides market on strategy and quantum we have the market pricing in r120 billion as cost of litigation which is non sensicle.

This share should be delisted and or suspended and unsuspended following restructuring and opened again at a respecful valuation similar to africa bank....

Either way....buying now will give you a tidy profit end august....

Sigificant deliverbals have been achieved by management and the board. Time now to focus on restructuring which will be completed before august.

Debt will be restructured and rate will be better negotiated since we have a clean sheet. Assets valued reasonably and end aug we will have a going concern.

Buy and look away. Your analysis and there management report despite uncertainty does point to a cmpany that will be able to continue as a going concern, mansge cash flow and pay debt.
They too are now focussing on driving growth and profitability

Sent from my SM-G950F using Sharenet Sharechat mobile app

Why do you view the legal liability more important than the debt? Both CW, VEB said they have no intention of destroying the company.
I find it hard to believe that any court will rule in favour of a shareholder to bankrupt the company and close its doors.
Further it will be very interesting to see what the Hawks find because still don't believe on bolts of blue lighting!!

[andi222]

Hi DTD,

As far as I can remember through the restructuring the debt lies in SEAG so it wont be shown as an asset as it will be consolidated.

The interesting part however will be for how much they will recognise MF in the books as investment in associate.

IAS 28 states that it should be recognised at cost plus transaction fees. Subsequent recognition will include items like profit distribution and impairments.

So I think what will happen is the following with MF:
Cost: 3.2 billion Euro.
Impairment: 2.5 billion Euro
Loss for 2 years at 50%: 0.1 billion Euro.

So currently MF sits at 0 book value. Refer to my previous post.

So I think we will see a 600 Million asset booked in the books as investment in associate.

The same thing could be done for Conforma. However I dont have the numbers yet.

Thats just my thought, any other thoughts?

Sent from my SM-G950F using Sharenet Sharechat mobile app

[Snippit]

JSE, Steinhoff, SNH

 

This daily chart indicates ready to go. Target ~5.75 for wave 3. fwiw  

I wait for above 1.60 with momentum.

 

https://wavecount.bl...inhoff-snh.html

 

 

tuorum periculo

Edited by Snippit, 21 June 2019 - 10:15 AM.

[DayTraderDad]

Good post Andi!!

Just a question for you:

Looking at balance sheet

Assets and disposal groups classified as held-for-sale: 1927

Liabilities directly associated with assets classified as held-for-sale: 1286

Reserves relating to assets held-for-sale and disposal groups: -148

Therefore H1-2019 balance sheet those figures will be removed and the follow:

Asset : 16370 - 1927 = 14443

Liabilities: 2949+12780=15729 - 1286= 14443

So Equity is = 0

But since MF inter company of debt is about 2800 will the debt be classified as an asset which then means equity is 2800?
This I assuming that SNH still responsible for debt but MF is responsible to pay SNH.
Your thoughts!!

[Investment novice]

Andi thats a good writeup.

The issue is not debt its legal liability. And until steinhoff does not put out information which guides market on strategy and quantum we have the market pricing in r120 billion as cost of litigation which is non sensicle.

This share should be delisted and or suspended and unsuspended following restructuring and opened again at a respecful valuation similar to africa bank....

Either way....buying now will give you a tidy profit end august....

Sigificant deliverbals have been achieved by management and the board. Time now to focus on restructuring which will be completed before august.

Debt will be restructured and rate will be better negotiated since we have a clean sheet. Assets valued reasonably and end aug we will have a going concern.

Buy and look away. Your analysis and there management report despite uncertainty does point to a cmpany that will be able to continue as a going concern, mansge cash flow and pay debt.
They too are now focussing on driving growth and profitability

Sent from my SM-G950F using Sharenet Sharechat mobile app

[andi222]

I had a detailed look now on the AFS 2018 and the following suprised me:

Cash and cash equals 1.3 billion. In addition, there are actually another 100 million from the subsidiaries and "held-for-sale" investments.

On the other side, a total of 10 billion debt is shown. That gives us a net debt of 8.6 billion.

Now lets add all other events together to get to the actual net debt.

1. Sale of Kika-Leiner, will bring 400 Million in 2019. No proceeds in 2018 received.

2. POCO sale will bring 270 Million

3. Sale of KAP shares 300 Million.

4. Possible sale of Unitrans 350 Million.

5. 200 Million claim from Wiese not yet received.

After receiving all of this net debt is only 7.5 billion.

Now to the valautions: Notes 34
Here the assets held-for-sale are listed in detail, in detail POCO, the automotive branch, Mattress Firm, Steinpol and a smaller item "Other". All together with a book value of 641 million.

Now taking out POCO gives us 370 Million. This is ridiculous as this 370 Million includes Matress Firm, Unitrans and some other.

Now taking out Unitrans which I assume will bring 350 Million in the sale.

We are at 0 Book value for Mattress and the other smaller entities.

The latest Matress Firm Balance sheet had Equtiy of 1.5 Billion. So 50% of that would five us 700 Million extra assets.

Not gonna mention the smaller ones now like Steinpol etc.

Conforama is also values at 0 Goodwill. Very strange as they produced a profit. So again massivly undervalued in AFS.

In Summary i think managment has really applied the most conservative way to value their assets. Net debt of 7.5 Billion is maintainable even at 10% interest. Look at the EBITDA of 770 and its expexted that in 2019 the EBITDA will be well above 1 Billion.

Again just my thoughts and no advice to buy or sell. Please feel free to comment on the above if I have missed something.

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[Investment novice]

Share price will wander in no mans land.....and could be range bound 1.20 to 1.50.. .as market looking for guidance on future. The delays with restructuring not helpful.
Look away and come back in september.


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[Milo]

I take back my story of fake news'. I see that Pep stores and Ackerman’s are still open so I don’t know what all this fuss is about.    Hopefully all the stop losses are triggered now so that share price can go up again. 

 

[DayTraderDad]

Next week will be very interesting. Exactly one year ago we have hit the low of 7 cents on 29 June 2018. That week Steinhoff got the confirmation of creditors giving them more time. I wonder if it will follow the same trend this year.
It might hit a low of 7 cents next week amd then in July get pumoed to 25 cemts again.

Three events could trigger this rise in the share price. Lock up agreement, HJ 1 results and analyst day.

If we could hit 7 cents again this would on a technical analysis build a strong double bottom. Watch what happens then

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Hi Andi I agree with you with a exception after reading the latest consent request I think the fall in the price we saw yesterday afternoon
and today must have been leaked information about the pending internal reorganisation.
Its difficult to say but there was a gap to be closed from June last year at R1.29 and finally got closed today.
So fingers crossed could well be the bottom R1.29!!! who knows??? I though it would go to R1.20!!

[DayTraderDad]

and i'd like to point out when i was making my woo haaa stories about the 24hrs notice i was told to be patient
 
8 days is a different story now hey

Lionel for you guidance I had already discussed this with Captain in May and there was no way they could get the CVA done in time.
My comment is not about time notice or when it is going to be announced its has to do with communication putting facts on the information.
I guess you missed the point!!

Further if you read the CVA Consent Request No. 4 they talking about commencement of internal reorganisation within the SEAG cluster prior
to the closing of the Restructuring.
Therefore as Captain said before management don't leave anything to chance so they must have already been aware of the changes by the
18th June.

Edited by DayTraderDad, 20 June 2019 - 06:52 PM.

[andi222]

Next week will be very interesting. Exactly one year ago we have hit the low of 7 cents on 29 June 2018. That week Steinhoff got the confirmation of creditors giving them more time. I wonder if it will follow the same trend this year.
It might hit a low of 7 cents next week amd then in July get pumoed to 25 cemts again.

Three events could trigger this rise in the share price. Lock up agreement, HJ 1 results and analyst day.

If we could hit 7 cents again this would on a technical analysis build a strong double bottom. Watch what happens then 😀

Sent from my SM-G950F using Sharenet Sharechat mobile app

[Lionelza1]

I still believe SNH has a great Management and honestly believe there is a reason for their actions but the communication has to improve.
Simply cannot say with 8 days to a deadline that well we not sure we will see!!! Market does not like uncertainty and as such every time
SNH get punished.

 

and i'd like to point out when i was making my woo haaa stories about the 24hrs notice i was told to be patient

 

8 days is a different story now hey

[Lionelza1]

I still believe SNH has a great Management and honestly believe there is a reason for their actions but the communication has to improve.
Simply cannot say with 8 days to a deadline that well we not sure we will see!!! Market does not like uncertainty and as such every time
SNH get punished.

 

well look at it as improvement....go back to last year they were giving 24hrs notice!....there's hope haha