Accounting crisis deepens at Poundland, Harveys and Bensons owner Steinhoff
PUBLISHED: 10:45 02 January 2018 | UPDATED: 13:08 02 January 2018
The future of the company behind discount retail chain Poundland became further clouded today as it warned that accounting issues may date back further than previously thought.
South African-based group Steinhoff, which acquired Poundland in September 2016 for around £600m, said that it may have to restate more historic figures.
Steinhoff, which also owns the Harveys and Bensons for Beds furniture chains in the UK, was plunged into crisis last month after revelations of accounting irregularities linked to its 2016 accounts.
Today, the company said that although an internal investigation remained ongoing, a restatement of accounts “for years prior to 2015 is likely to be required”, adding that the 2016 and 2015 financial statements “can no longer be relied upon”.
The group also warned investors to “exercise caution” in relation to the financial statements.
The initial revelation triggered a share price collapse and a management overhaul, with lenders deserting the firm and credit insurance being withdrawn from its operating companies.
There are nearly 40 Poundland stores across East Anglia, including four each in and around Norwich and Colchester, three in Great Yarmouth, and two each in Ipswich, Lowestoft and King’s Lynn.
Other Poundland locations include Diss, Thetford, East Dereham, Wisbech, Bury St Edmunds, Felixstowe, Sudbury, Haverhill, Martlesham Heath, Clacton-on-Sea, Chelmsford and Witham.
There are also around a dozen branches of Harveys and Bensons for Beds in the region, including stores in Norwich, Ipswich, Colchester, Chelmsford, Bury St Edmunds, Great Yarmouth and King’s Lynn.
Last week Steinhoff was again downgraded by ratings agency Moody’s, which has warned that it may not have sufficient funds to “sustain its European operations”.
Cutting Steinhoff’s credit rating from B1 to Caa1, its second such downgrade, Moody’s said the move reflected the “increasing pressure on the company’s liquidity profile”.
Moody’s pointed out that Steinhoff has 1.47bn euros of debt maturing next year, and the investigation into accounting irregularities could “make it challenging to either repay or refinance”.
In December, Steinhoff installed an acting chief executive, Danie van der Merwe, following the resignation of Markus Jooste.
Steinhoff’s chairman, the South African retail billionaire Christo Wiese, had been acting as executive chairman on an interim basis following Mr Jooste’s departure, but resigned in order to “address any possible conflict of interest that may exist”.
Mr Wiese’s Brait investment group owns stakes in Virgin Active, New Look and food chain Iceland.