15225 replies to this topic

[DayTraderDad]

Tekkie Town old boys scraping the barrel!!!!

[Captainfrom82]

Thanks Captain.

Not seeing how that could be value adding to SNH as it is an expense and the trade-off between retaining vs cost-to-income could be debated.  I could be wrong but Pepkor retail pretty much a commodity that happens to cater for a growing income LSM favouring them in a SA Inc.  No 'key man dependencies' that require huge bonuses.  Just an opinion.

rgds JK

 

Hi JK001,

 

I think that maybe we are missing each other here.  Lets try again.

 

For 1H18 Pepkor reported R2708m Operating Profit Before Capital Items (OPBCI) which is the statutory.  Already included in this figure was the "expense" of R500m as a once-off provision for the loan impairment.  Therefore if this once off was not included, the OPBCI would actually be R3298m (the balance of R90m was a share incentive scheme).

 

For 1H19, we should not see a repeat of this "expense" which had already reduced Pepkor's regulatory numbers.  Thus by comparison, the 1H19 numbers are positively impacted.

 

You can do the sums and calculate the impact of this per share (R500m / WANOS 3460 = 14.5 cents).  Since this 14.5 cents is greater than 20% of the previously reported HEPS and EPS (36.2 cents * 20% = 7.2 cents) , this is the reason for the SENS.

 

The need to retain key staff is a debatable issue as you point out. Personally, I agree with the position of Pepkor.  You need to keep the best people at your business and incentive them accordingly.  If this involves a once off cost, I can live with that.

 

Best Regards

Captainfrom82

[Tom]

https://www.fin24.co...report-20190417

 

Quote:

"

Former Tekkie Town owner questions PwC 'extreme coyness' in Steinhoff report

...

Mostert has said in the past that, following the collapse of Steinhoff, "it became clear" that the former Tekkie Town owners' exchange agreement was based on the Steinhoff financials, which the company had subsequently admitted contained irregularities, and the Steinhoff shares they received in exchange turned out to be "worthless".

...

In his most recent affidavit, Mostert claims the reason why PwC was – in his view - so "extremely coy" in its Steinhoff report, might be partly due to the circumstance that, "far from being a wholly independent investigator", PwC is actually Pepkor's auditor and has been for a number of years.

Mostert states that he finds it "peculiar" that PwC has not pointed to what he deems to be potential conflict in the past.

In his view, "the public, who lost billions in the Steinhoff implosion, need to at least understand how PwC approached the forensic investigation in those inevitable segments where there may have been a significant conflict of interest".

...

Fin24 reported in May last year that Pepkor - then still known as Steinhoff Africa Retail (STAR) - appointed PwC as its external auditor.

...

"

Edited by Tom, 18 April 2019 - 09:38 AM.

[JK001]

Hi JK001,

 

This was for Pepkor (previously Star).  Last year they (controversially) provided this R500m guarantee for the share incentive scheme for senior managers.  They  advised then that it was needed to retain the key senior staff. This was not well received by the market.  It had the effect of reducing the HEPS.

 

Pepkor's SENS of 17 April, is merely reminding the market that this previous once off item will not be a cost on the current earnings.  So although they are not able to quantify the exact impact (because they have not yet finalised the 1H19 financials), they advise that the fact that there will not be a repeat will see a positive impact on the Pepkor earnings.

 

Since Steinhoff own >70% of Pepkor and consolidate the earnings, this will be positive for Steinoff as well (historically Pepkor contrlbuted around 24% of Steinhoff's revenue (note, not earnings)).

 

Best Regards

Captainfrom82

Thanks Captain.

Not seeing how that could be value adding to SNH as it is an expense and the trade-off between retaining vs cost-to-income could be debated.  I could be wrong but Pepkor retail pretty much a commodity that happens to cater for a growing income LSM favouring them in a SA Inc.  No 'key man dependencies' that require huge bonuses.  Just an opinion.

rgds JK

[Captainfrom82]

see there is a sens from Pepkor on R500 million guarantee as a once off that will affect earnings.  Wonder if that was for SNH as SENS did not elaborate.

 

Hi JK001,

 

This was for Pepkor (previously Star).  Last year they (controversially) provided this R500m guarantee for the share incentive scheme for senior managers.  They  advised then that it was needed to retain the key senior staff. This was not well received by the market.  It had the effect of reducing the HEPS.

 

Pepkor's SENS of 17 April, is merely reminding the market that this previous once off item will not be a cost on the current earnings.  So although they are not able to quantify the exact impact (because they have not yet finalised the 1H19 financials), they advise that the fact that there will not be a repeat will see a positive impact on the Pepkor earnings.

 

Since Steinhoff own >70% of Pepkor and consolidate the earnings, this will be positive for Steinoff as well (historically Pepkor contrlbuted around 24% of Steinhoff's revenue (note, not earnings)).

 

Best Regards

Captainfrom82

[JK001]

see there is a sens from Pepkor on R500 million guarantee as a once off that will affect earnings.  Wonder if that was for SNH as SENS did not elaborate.

 

[Investment novice]

Thanks Captain great post!!!

Thank you. I appreciate the detailed post and your accounting background. I forgot about the fact that snh has to account for future expenses. Even though that it's extremely difficult. They also need to get a sense of quantum to defer to those whom they challenge for professional liability. The insurers are going to be paying.......


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[DayTraderDad]

Thanks Captain great post!!!

[Captainfrom82]

Steinhoff management is moving in the right direction. Debt restructuring, claim settlement,. Etc.
But how do you settle this claim... And what rights do the shareholders have? Can wiese actually demand his money back, and what role did he play in approving the MF acquisition.
Why would the creditors allow settlement and reduce their priveledged position?
If sharks start to fight for the pieces... It's all downhill... But if there is collaboration surely the share value will b affected.what role do shareholders play in dumping shares and eroding perceived value. And has said before how much irregularity is blame worthy and who holds the blame???... Following this for past few years and deeply invested... This still is vague...settlement will take years.. To calculate... And would only happen years after legal battle...

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Hi IN,

 

Very good post actually.

 

The one thing I would add, is that Steinhoff are treating the shareholder litigation claims distinctly separate from the vendor litigation claims.  Wiese, GT Ferrreira  & Braam van Huysteen are all three vendor claims.  The Steinhoff SENS asking for clarification and quantification is shareholder losses excludes these guys.

 

Instead, it is dealing with the VEB claims as well as possible shareholder litigants in South Africa (who incidentally, it is questionable if they have any rights against a foreign registered company).  At this stage, Steinhoff is moving to quantify the claims so that these can be possibly provided for.  However, importantly, it will form a significant part of Steinhoff's own lawsuits against the various auditors (and there are many) and independent reviews who up to November 2017 advised Steinhoff that everything was above board.

 

Regarding the legitimacy of Wiese's overall claim, I have spoken to many people in this regard.  Most of the legal opinion is that it would be a very difficult case for CW to win.  One team of lawyers even went to far as to say that CW has less than 5% of a chance in terms of Dutch law.

 

I do not think that Wiese has any claims on the Mattress Firm acquisition. He was Chairman at the time and would have had to approve this deal.  Importantly, MJ's fraud did not include Mattress Firm - although it was a poor bit of business.

 

Regarding the creditors wanting to dilute their already strong position.  In a way, it is a backhanded compliment to Steinhoff.  The value of this company is so great, that even after cutting a slice out to settle lawsuits, it still makes financial sense to the lenders.  A settlement provides certainty on understanding and quantifying the risk.

 

I think that an equally important matter to consider is the Steinhoff restructuring.  Critical to this is the 49% stakes that Steinhoff have given away in MF and Conforama.  I bet that they will up this for Management incentive for Conforama.  Steinhoff would need to do this (ie give up control) in order to unbundle the debt off the Steinhoff balance sheet, and account for MF and Conforama by equity accounting.  I suspect the same will happen shortly for Greenlit.

 

This post is bound to be challenged by You-Know-Who so, I am getting my boxing gloves on...

 

Best Regards

Captainfrom982

[Captainfrom82]

Lies and bulldust... There you go trying to mislead again....

 

Will you admit to being not only a farce but a big liar if i prove you wrong from the annals of history?

 

It depends Polly...  I am never going to give a snake an open ended, carte blanche response admitting anything.  Note, my point of reference is the US Law as well as English law. 

 

 

What I was pointing out is that your claim that Steinhoff is a pyramid or ponzi scheme was rubbish, It is factually incorrect, and you are misrepresenting the matter on this platform.  You may have your own views, but the FACT remains that Steinhoff legally is not a ponzi or pyramid scheme and never was.

 

Presumably you are from South Africa?  So I await with bated breath your compelling argument to prove otherwise

[Polly]

 

Ponzi or Pyramid schemes by the fact that they are illegal, cannot be incorporated into a juristic entity or a Special Purpose Vehicle.  Steinhoff on the other hand is a listed company, and is therefore a legal entity.  A Ponzi scheme even has a special condition in that it must be non-existent.  

 

 

 

Lies and bulldust... There you go trying to mislead again....

 

Will you admit to being not only a farce but a big liar if i prove you wrong from the annals of history?

Edited by Polly, 17 April 2019 - 11:40 AM.

[Polly]

Hi Bubble,

 

There is a fundamental difference.  Or else, by Polly's principles every fraud on a listed company is a ponzi/pyramid scheme. 

 

There is a big difference between attracting capital for business growth,and attracting new investors to pay off a return on the initial investors.  The former is a common business practise; the latter is a ponzi/pyramid scheme. The former is perfectly legal (until a fraud is perpetuated; and even then it is hard to directly attribute the loans received to the fraud misinformation), the latter illegal.

 

Legally, the difference is both procedural as well as substantive,

 

Best Regards

Captainfrom82

sorry mate.You cant see further than your nose... You dont need a degree to invest and neither do you have to be a Guru.. All you need is to be streetwise to think of big picture.

 

Just sorry you dont have that...Go back to your numbers, insults and name calling and lets see if that makes you some money!!

 

Ps " Your comments both in respect to the JSE and Steinhoff are slanderous.  If you were not hiding behind anonymity, you would have a lawsuit on your hands.  "

 

same for you mate....your comments on any negativity on the PS is both slanderous and damaging against myself. But hay im used to it so take no offence and  no worries..thats how losers always behave. being saying that for yonks!!

 

Difference is i say it as it as.....A spade is a spade is a spade.

[Captainfrom82]

 

I get the technical analysis(true definition) on Ponzi/Pyramid, but tend to agree with Polly on the principle.

 

MJ and Co continued to attract capital from all over the place(CW/banks/ECB/etc.), kept on paying dividends to keep everyone happy and attract more capital. Buying overvalued assets and crooking the books to keep everyone fooled. Simple as that

 

 

Hi Bubble,

 

There is a fundamental difference.  Or else, by Polly's principles every fraud on a listed company is a ponzi/pyramid scheme. 

 

There is a big difference between attracting capital for business growth,and attracting new investors to pay off a return on the initial investors.  The former is a common business practise; the latter is a ponzi/pyramid scheme. The former is perfectly legal (until a fraud is perpetuated; and even then it is hard to directly attribute the loans received to the fraud misinformation), the latter illegal.

 

Legally, the difference is both procedural as well as substantive,

 

Best Regards

Captainfrom82

[Bubble]

I get the technical analysis(true definition) on Ponzi/Pyramid, but tend to agree with Polly on the principle.

 

MJ and Co continued to attract capital from all over the place(CW/banks/ECB/etc.), kept on paying dividends to keep everyone happy and attract more capital. Buying overvalued assets and crooking the books to keep everyone fooled. Simple as that

[Bubble]

Your utterances are those of someone clearly deluded, who has a deep hatred for Steinhoff.  You are economically illiterate if you cannot see the difference between a Ponzi/Pyramid scheme and a fraud committed at a listed company.  Where did you get that financial degree from again?  You should ask for your money back.

 

Look carefully and understand the reasons I provided before you have to spew your vitriol.

 

 

Your comments both in respect to the JSE and Steinhoff are slanderous.  If you were not hiding behind anonymity, you would have a lawsuit on your hands.  

 

Captainfrom82

 

I get the technical analysis(true definition) on Ponzi/Pyramid, but tend to agree with Polly on the principle.

 

MJ and Co continued to attached capital from all over the place(CW/banks/ECB/etc.), kept on paying dividends to keep everyone happy and attract more capital. Buying overvalued assets and crooking the books to keep everyone fooled. Simple as that

[Captainfrom82]

Call it whatever you want ... I call it the perfect well dressed Pyramid Scheme which was in operation over 20 years ago and it was one that was protected by the JSE!!!!

 

suck suck suck,,,and then spewed once the sh@t hit the fan...and of cos the dividend was the sweetner.

 

The pyramid was the  overvalued assets which continued to grow falsely.

Once pyramid discovered , captain jumps ship...and blames others.....

 

and now the unfolding........

 

Whats the difference huh???

 

Your utterances are those of someone clearly deluded, who has a deep hatred for Steinhoff.  You are economically illiterate if you cannot see the difference between a Ponzi/Pyramid scheme and a fraud committed at a listed company.  Where did you get that financial degree from again?  You should ask for your money back.

 

Look carefully and understand the reasons I provided before you have to spew your vitriol.

 

 

Your comments both in respect to the JSE and Steinhoff are slanderous.  If you were not hiding behind anonymity, you would have a lawsuit on your hands.  

 

Captainfrom82

[DayTraderDad]

Interesting point IN I think the biggest exercise is the calculation of the loss.

My question is if I bought the share in May 2013 for R22 and was keeping as a long term investment and now the share is with
R1.80 so how much can I claim? Can I claim the difference from R22 to R1.8 or from R57???

I believe the best way forward is for the shareholders to sit together to make the company stable well managed and to let it
return to a good value and eventually they will recover all the losses.

If one looks that the share fell from R57 to R1.80 that is a loss of R237 bil and in Euros E14,9 it is clear there is not such
money available.
Equity available is E3.7 so its or NAV of 0.58 so the maximum the shareholders can get without a fire sales is R9 per share
which is only 16% of their losses.

So for me is a no brainier only option make the company grow to ensure share price recovers.

So if all claims are cancelled share price will recover to the R10 which means shareholders would have got they R9 immediately.
If growth of PEPKOR SA at 6% and PEPKOR Europe at 20% in 5 years SNH would have grown by 100 % may be the share could be then R57.

How ever if claims are placed there will be no money and company will struggle under debt and very very slow recovery.

Anyway interesting times ahead!!!

[Investment novice]

Steinhoff management is moving in the right direction. Debt restructuring, claim settlement,. Etc.
But how do you settle this claim... And what rights do the shareholders have? Can wiese actually demand his money back, and what role did he play in approving the MF acquisition.
Why would the creditors allow settlement and reduce their priveledged position?
If sharks start to fight for the pieces... It's all downhill... But if there is collaboration surely the share value will b affected.what role do shareholders play in dumping shares and eroding perceived value. And has said before how much irregularity is blame worthy and who holds the blame???... Following this for past few years and deeply invested... This still is vague...settlement will take years.. To calculate... And would only happen years after legal battle...

Sent from my SM-G950F using Sharenet Sharechat mobile app

[Polly]

Call it whatever you want ... I call it the perfect well dressed Pyramid Scheme which was in operation over 20 years ago and it was one that was protected by the JSE!!!!

 

suck suck suck,,,and then spewed once the sh@t hit the fan...and of cos the dividend was the sweetner.

 

The pyramid was the  overvalued assets which continued to grow falsely.

Once pyramid discovered , captain jumps ship...and blames others.....

 

and now the unfolding........

 

Whats the difference huh???

[Captainfrom82]

This is the perfect Pyramid scheme / Ponzi scheme on operation if you understand how that works.

A quick summary is that a PS will pay a return to shareholders in a form of a divi or interest withstanding it has no free cash flow or profits. This PS has been doing it for years. Even in the crash of 2007 if you go and see , one of the few companies to maintain dividends. I was actually supriised then too.. but never took the bait!

 

Polly,

 

You keep on going on about Steinhoff being a "Pyramid scheme / Ponzi scheme".  Even worse, you use the adjective "perfect" as well.

 

It has for a long time irritated me, and given our differences and your  bizarre/drunken post while you were in Aussieland, I thought it best not to actually correct your error.  However, since you persist in describing Steinhoff in this manner, all gloves are off.

 

Firstly, let me acknowledge (again) that a fraud has been committed at Steinhoff.  I hope you understand and accept this.

 

You clearly do NOT understand what a Pyramid scheme or Ponzi scheme actually is.  Let me help you...

 

Ponzi scheme:

* a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors

Source: https://www.bing.com...&FORM=QBRE&sp=1

 

Pyramid Scheme:

* a form of investment (illegal in the UK and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones

Source: https://www.bing.com...&FORM=QBRE&sp=1

 

 

HOW DO THESE COMPARE WITH STEINHOFF?

Is Steinhoff a Pyramid or Ponzi Scheme by the above definitions?

 

No...not in a million years.  Ponzi or Pyramid schemes by the fact that they are illegal, cannot be incorporated into a juristic entity or a Special Purpose Vehicle.  Steinhoff on the other hand is a listed company, and is therefore a legal entity.  A Ponzi scheme even has a special condition in that it must be non-existent.  Steinhoff is a real entity, with assets both intangible as well as intangible.

 

Both of these schemes has a key requirement; namely, that the early/first investors get their returns from the later investors.  This is because the returns promised are not achievable in the conventional investment universe.  Therefore later investors' funds are required to provide the promised returns.  Off course this is not sustainable, which is why these schemes are doomed to failure.

 

The same cannot be said of Steinhoff.  No later investor was promised a return, that Steinhoff was going to provide by sourcing additional funds from shareholders.  The only times that Steinhoff did go to the market was to obtain capital for their expansions.  You may argue that Steinhoff overpaid - that is a separate issue.  The daily trading shares across the various Stock Markets and Securities Exchanges in the world, did NOT involve Steinhoff one bit (except where they engaged in share buy-backs).

 

A Pyramid Scheme requires the early investors to recruit later investors (the greater fools).  Iam not aware of any overt recruitment at Steinhoff.

 

I just wish that you would stick to the facts in your reporting/postings.  The very thing that you are accuse others of, is exactly what you are guilty of (misinforming everyone).

 

 

Captainfrom82