South Africa’s Steinhoff warned yesterday the slump in the pound after Britain’s vote to leave the European Union would hurt its UK business as the furniture conglomerate fell a touch short of estimates with a one-third rise in annual sales.
Steinhoff, which is in the middle of buying British discount chain Poundland and US bedding retailer Mattress Firm, has been on an acquisition spree to offset exposure to a deteriorating home market with safer assets in markets such as Europe.
But Britain’s shock vote to leave the EU in June has created uncertainty for Steinhoff, which already runs the Benson for Beds and Harveys furniture chains in Europe’s secondlargest economy.
“While the effect of this [Brexit] decision on consumer demand across Europe remains uncertain, the devaluation of the pound sterling may also result in an unfavourable effect when translating our businesses’ earnings reported in euro,” Steinhoff said.
Sterling hit a three-decade low of $1.2798 in July in the wake of the vote for Brexit.
It has since recovered about 2%, but that still leaves it around 12% lower than it was before the June 23 referendum on EU membership.
The company, which also sells clothes, reported a one-third rise to ß13.1-billion (R215-billion) in annual sales yesterday.