15225 replies to this topic

[DayTraderDad]

Haha in our family there is a say:

If the a town synagogue is getting emptier is time to leave the town and when a town is busy building new synagogue is time to move to the town.

So if hey are piling into Steinhoff on a massive scale its time to move in!!!!

[andi222]

Hi Captain,

Yes agreed there is so much hate and frustation among shareholders. And a big issue is that most Steinhoff shares are in public hands with no major shareholder. So emotions of these shareholders are currently determening the price.

Looking forward to your table regarding the EBITDA.

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[Captainfrom82]

Hi Captain,

 

thank you for the valuation. So my consideration of 1.5 billion euro for 30% shares in Pepkor europe was not too far off.

 

Where do you see the total revenue in 2020? and sustainable EBIT? For the whole Steinhoff group.

I did my own calc taking all presentations, quarterly updates and forecasts into account and i was surprised. My forecast on a basic calc. for 2020 is 18.6 billion revenue and a sustainable EBIT of 1.25 billion. This is however my own opinion and prediction. 

 

Hey Andi222,

 

An Important & Interesting question...especially as many people believe that this (EBIDTA)  is THE key to Steinhoff's future.

 

I will post the numbers in a separate post.  However, I thought it would be interesting to post on the behavioural aspects differences that I have come across in the various countries. 

 

Everyone has an opinion about Steinhoff overall, and as a result most of them seem to hold some position regarding the revenue and sustainable EBIT/EBITDA and earnings.  Everyone is obviously entitled to their opinions.  My serious concern comes where misinformation (or fake news) is passed on as a matter of fact.   But lets not open that can of worms again.

 

Be that as it may, clearly there are extremely polarised views and opinions of the sustainability (and survival) of Steinhoff.  By association therefore, the earnings are a source of great consternation and interest. 

 

And this is not just here in South Africa.  I have come across this to a far lesser extent in Germany and back home.  But nowhere are the arguments as robust as in South Africa.   It may be a national psyche or some behavioural thing that is especially relevant to South Africa – but for whatever reason, the South African investors seem to be overly focused on the negative aspects.  They look for all the reasons why Steinhoff will fail, whereas there are probably far more logical and practical reasons why Steinhoff will succeed and survive. 

 

I have often wondered in the past months if Google, Apple, Berkshire, Amazon – large companies incubated in the good 'ol US would actually have flourished in South Africa.  It is rather telling that Elon Musk - a son of South Africa – went to the US to realise his dreams. 

 

By the way, the country that seems to have the highest tolerance for Steinhoff’s ability to survive is actually in my experience, Israel.  They are piling into Steinhoff on a massive scale.  This is incredible because you would have thought that South Africa with the whole Afrikaner pride thing would have cut the company some slack – and that many more South African investors would still believe in this company.     But then again, what do I know about the local psyche?  

 

I have learned that this Sharechat forum is an interesting microcosm of the South African overall  and is an interesting representation of love/hate relationship with Steinhoff. 

 

I just thought that it was worth sharing this merely out of interest.  I hope that I have not hirt anyone’s feelings.  I mean no harm.

 

Best Regards

Captainfrom82

[DayTraderDad]

Stock is being shed.. But bought as well..... Will go down.. Form a base and climb june18. And sky rocket on restructuring....

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IN I agree with you the volumes of yesterday and today are high so even though there is selling I think there is also accumulation.

The Rand also collapsed this afternoon that did not help.

The FY 2019 also going to be important!

[Investment novice]

Also big volumes in xetra over 52 mil.

Stock is being shed.. But bought as well..... Will go down.. Form a base and climb june18. And sky rocket on restructuring....

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[DayTraderDad]

If at end of day the 10 cents can hold on xetra we will see a slight recovery in the next few days in my opinion. If it drops below 10 cents at end of day it can drop to 7 cents. :/

Also big volumes in xetra over 52 mil.

[andi222]

Down to e0.10c, and briefly below. Not good.

 

If at end of day the 10 cents can hold on xetra we will see a slight recovery in the next few days in my opinion. If it drops below 10 cents at end of day it can drop to 7 cents. :/

[DayTraderDad]

Down to e0.10c, and briefly below. Not good.

World market in bad shape thanks to TRUMP!!!

[Bubble]

Down to e0.10c, and briefly below. Not good.

Edited by Bubble, 09 May 2019 - 04:40 PM.

[andi222]

A who owns Pepkor Europe at moment?

 

100% owned by Steinhoff Group.

[andi222]

Regarding the value of Pepkor Europe...consider the following facts:

 

1. Remember that Pepkor Europe is almost as large as Pepkor Africa in terms of sales (E993 vs E1198). 

2. PE grew at 15% YOY vs 5% for PA.

3. Since 2017 Steinhoff has severely curtailed capital expansion due to the lack of funds.  So the growth in PE has been constrained artificially.

4. PE also operates in a economically higher LSM market, so the high growth rate rate may be sustained for a longer period. 

5. The market cap value of PA as I type this is R67.6b (at a share price of R19.60).  I would argue that PA is still seeing the impact of the Steinhoff negative publicity and the R500m provision of the directors share incentive scheme.  So the share price is lower than it may have otherrwise been.

 

But even using PA as the poxy for PE R67b at an ZAR:Euro of R16.05 to E1 that would see a market cap of E4.2b

 

I would argue that the market cap would be materially higher.

 

I will look at some alternate valuation methods and then we can discuss.

 

Best Regards

Captainfrom82

 

Hi Captain,

 

thank you for the valuation. So my consideration of 1.5 billion euro for 30% shares in Pepkor europe was not too far off.

 

Where do you see the total revenue in 2020? and sustainable EBIT? For the whole Steinhoff group.

I did my own calc taking all presentations, quarterly updates and forecasts into account and i was surprised. My forecast on a basic calc. for 2020 is 18.6 billion revenue and a sustainable EBIT of 1.25 billion. This is however my own opinion and prediction. 

[Captainfrom82]

Good points.

 

So the NAV impact on those would be the following:

MF +-1 billion, here 3,3 billion is intercompany debt

Confo +- 1,7 billion, here 1,6 billion is intercompany debt to SEAG

Greenlit - I have no value here. Maybe you could help?

 

How much would you value Pepkor Europe for a possible IPO? Same as Pepkor SA? Say 1,5 billion euro selling 30% at IPO?

 

Regarding the value of Pepkor Europe...consider the following facts:

 

1. Remember that Pepkor Europe is almost as large as Pepkor Africa in terms of sales (E993 vs E1198). 

2. PE grew at 15% YOY vs 5% for PA.

3. Since 2017 Steinhoff has severely curtailed capital expansion due to the lack of funds.  So the growth in PE has been constrained artificially.

4. PE also operates in a economically higher LSM market, so the high growth rate rate may be sustained for a longer period. 

5. The market cap value of PA as I type this is R67.6b (at a share price of R19.60).  I would argue that PA is still seeing the impact of the Steinhoff negative publicity and the R500m provision of the directors share incentive scheme.  So the share price is lower than it may have otherrwise been.

 

But even using PA as the poxy for PE R67b at an ZAR:Euro of R16.05 to E1 that would see a market cap of E4.2b

 

I would argue that the market cap would be materially higher.

 

I will look at some alternate valuation methods and then we can discuss.

 

Best Regards

Captainfrom82

[Polly]

Good points.

 

So the NAV impact on those would be the following:

MF +-1 billion, here 3,3 billion is intercompany debt

Confo +- 1,7 billion, here 1,6 billion is intercompany debt to SEAG

Greenlit - I have no value here. Maybe you could help?

 

How much would you value Pepkor Europe for a possible IPO? Same as Pepkor SA? Say 1,5 billion euro selling 30% at IPO?

 

 

A who owns Pepkor Europe at moment?

[Captainfrom82]

Good points.

 

So the NAV impact on those would be the following:

MF +-1 billion, here 3,3 billion is intercompany debt

Confo +- 1,7 billion, here 1,6 billion is intercompany debt to SEAG

Greenlit - I have no value here. Maybe you could help?

 

How much would you value Pepkor Europe for a possible IPO? Same as Pepkor SA? Say 1,5 billion euro selling 30% at IPO?

 

Hi Andi222,

 

I am not sure if we are speaking across each other.

 

What do you mean by:

MF +-1 billion, here 3,3 billion is intercompany debt

Confo +- 1,7 billion, here 1,6 billion is intercompany debt to SEAG

 

Remember equity accounting will just be = The value of the company x 49%

 

The income or loss will be the difference between the two years value. 

 

Since it is a difficult thing for us to value Confo & MF (given that they are no longer listed), we would not easily be able to determine the value of Steinhoff's 49% interest.  I have modeled various calcs in this regard based on the future income discounted, but this is a ballpark exercise.

 

Best Regards

Captainfrom82

[DayTraderDad]

CW is remarkable and knew exactly how to bend the law for his purposes including iotimising his tax positions.
As a director and chairman you have to sign off as a statutory requirement shareholding in all companies. Any non disclosures would be frowned upon. His relationship with MJ stems back many years. Surely the business transactions itemised are just a fraction. If MJ gets Burnt he will surely take his mates with him...

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Haha IN you have a interesting point maybe when squeezed by the Hawks MJ will spill the beans just like old Ben!!!

[Investment novice]

Hi Captain,

I am not saying that there was illegal issues (in fact for me even some of the MJ tricks is going to be hard to criminalise in court) and I certainly
respect CW he is a remarkable businessman look what he did to Pepkor.
But being in charge and having the responsibility to ensure proper corporate governance when things go wrong then want my money back???
What about all the other people that lost money and were not in a position of management??
Surely the Honorable thing would be for him to try and get SNH on its feet again not to drag it down just like the VEB and others!!
For me there is no money available to pay for looses and the best is for shareholders and vendors to be patient let the company turn around.

Anyway this will keep lawyers and judges busy for a long time!!

Regards,
DTD

CW is remarkable and knew exactly how to bend the law for his purposes including iotimising his tax positions.
As a director and chairman you have to sign off as a statutory requirement shareholding in all companies. Any non disclosures would be frowned upon. His relationship with MJ stems back many years. Surely the business transactions itemised are just a fraction. If MJ gets Burnt he will surely take his mates with him...

Sent from my SM-G950F using Sharenet Sharechat mobile app

[DayTraderDad]

Hey DTD,
 
Wiese's actions may be unethical and abhorrent to many.  They were not illegal.  He is a businessman and maximised his returns.
 
Steinhoff could scarcely say they were not aware that he had a significant interest in the various companies underwriting or otherwise doing business.
 
Also, this is a common practise (albeit unsavoury).  Just in South Africa. the following companies have used related parties as sponsors or advisors or underwriters.  PSG, Investec, ABSA, Nedbank.  Go look at the PSG deals for Capitec or Curro.  Investec for their various deals.  ABSA with the whole Barclays matter.
 
I can name you many more in the US!
 
It is not illegal.
 
Best Regards
Captainfrom82

Hi Captain,

I am not saying that there was illegal issues (in fact for me even some of the MJ tricks is going to be hard to criminalise in court) and I certainly
respect CW he is a remarkable businessman look what he did to Pepkor.
But being in charge and having the responsibility to ensure proper corporate governance when things go wrong then want my money back???
What about all the other people that lost money and were not in a position of management??
Surely the Honorable thing would be for him to try and get SNH on its feet again not to drag it down just like the VEB and others!!
For me there is no money available to pay for looses and the best is for shareholders and vendors to be patient let the company turn around.

Anyway this will keep lawyers and judges busy for a long time!!

Regards,
DTD

[andi222]

Hey DTD,

 

We have discussed this in our private chats.

 

Look at Page 5 of the MF Presentation that Steinhoff released on 5 Oct 2018. Look at previous postings as well.  The MF debt as at end Jul 2018 was $4.4b and assets of $3.3b. 

 

Now consider that Steinhoff suddenly does not have to consolidate the debt or assets.  Steinhoff is now better off by $1b.  Go further, MF suddenly owes Steinhoff loans of $3.3b which will be accounted for as assets now.

 

Changes the NAV, doesn't it?

 

The same treatment will happen for Confo in the 2019 results, and the same again for Greenlit in the 2020 results.

 

Plans for the IPO of Pepkor Europe are going ahead as well.

 

Don't stress too much about the NAV on the 2017 financials - this is two years old.  Look at the EBIDTA numbers - that tells a story.

 

Best Regards

Captainfrom82

 

Good points.

 

So the NAV impact on those would be the following:

MF +-1 billion, here 3,3 billion is intercompany debt

Confo +- 1,7 billion, here 1,6 billion is intercompany debt to SEAG

Greenlit - I have no value here. Maybe you could help?

 

How much would you value Pepkor Europe for a possible IPO? Same as Pepkor SA? Say 1,5 billion euro selling 30% at IPO?

[DayTraderDad]

Hey DTD,
 
We have discussed this in our private chats.
 
Look at Page 5 of the MF Presentation that Steinhoff released on 5 Oct 2018. Look at previous postings as well.  The MF debt as at end Jul 2018 was $4.4b and assets of $3.3b. 
 
Now consider that Steinhoff suddenly does not have to consolidate the debt or assets.  Steinhoff is now better off by $1b.  Go further, MF suddenly owes Steinhoff loans of $3.3b which will be accounted for as assets now.
 
Changes the NAV, doesn't it?
 
The same treatment will happen for Confo in the 2019 results, and the same again for Greenlit in the 2020 results.
 
Plans for the IPO of Pepkor Europe are going ahead as well.
 
Don't stress too much about the NAV on the 2017 financials - this is two years old.  Look at the EBIDTA numbers - that tells a story.
 
Best Regards
Captainfrom82

Thanks for the explanation. Yes I thought as much just glad for the confirmation.

Haha I am not worried at all of the FY 2017 but very glad for the pull back!!!

Yes the EBITDA tells the story plus MF is now out of the question so the -94 (on H1-2018) will not be there in future.

[Captainfrom82]

Ho dear ho dear!!!!



"Wiese was the most frequently mentioned name in the annual report, receiving considerably more mentions than even former
CEO Markus Jooste. The annual report, which was released just before midnight on Tuesday, took 17 months to be completed
by Deloitte.

On Wednesday Wiese did not immediately respond to requests for comment on the dramatic document.

Wiese’s name is mentioned 72 times in the report, in many instances in relation to complex related-party transactions.
The transactions are identified in detail at the end of the 329-page report. They include the November 2017 prepayment
by Steinhoff to Wiese for his Shoprite shares as well as trading in a valuable block of Brait shares between 2014 and 2016
by Steinhoff and Upington Investments, a company controlled by Wiese."

 

Hey DTD,

 

Wiese's actions may be unethical and abhorrent to many.  They were not illegal.  He is a businessman and maximised his returns.

 

Steinhoff could scarcely say they were not aware that he had a significant interest in the various companies underwriting or otherwise doing business.

 

Also, this is a common practise (albeit unsavoury).  Just in South Africa. the following companies have used related parties as sponsors or advisors or underwriters.  PSG, Investec, ABSA, Nedbank.  Go look at the PSG deals for Capitec or Curro.  Investec for their various deals.  ABSA with the whole Barclays matter.

 

I can name you many more in the US!

 

It is not illegal.

 

Best Regards

Captainfrom82