GEORGE NEWS - Steinhoff Africa Retail (Star) subsidiary Tekkie Town experienced an excellent December season, according to Star's speciality fashion and footwear division CEO, Bernard Mostert. 

This during a time that Steinhoff International, that owns 76,8% of Star's shares, announced that the company would delay the announcement of its annual results in order to investigate accounting irregularities at an international level.

"Inside Tekkie Town we have had no cash flow or supplier problems because of what happened in Steinhoff NV," said Mostert. 

"Star is a separate listed entity. We had a fantastic December with record sales. 

"Our turnover grew well and we concluded the year with 367 shops. We added 57 stores during 2017."

After being listed on the JSE in September last year, Star shares fared well. But, a day or two after its highest share price was recorded (on 1 December), it took a sudden dip, when Steinhoff International's accounting irregularities were made public. 

However, the share price started recovering in early January and this week traded at higher levels than its original listing price of R20,50.

Ian Nel, a spokesperson for Star, did not want to say more about the price fall than, "It is impossible to speculate what the cause of the reaction was in December." 

Asked how the debt of Steinhoff International, with its almost 80% shareholding, will affect Star, Nel said, "Steinhoff's shareholding in Star and the loan are independent of each other. 

"Star is an independent, separately listed company that is very profitable and therefore able to service its own debt and any other liabilities."

He said according to the financial statements of 30 September 2017, the loan from Steinhoff to Star was to the amount of R16 billion.

Part of the Tekkie Town premises in George. Photo: Alida de Beer

George prospects
Mostert foresees further job creation in George as a result of development programmes launched by Tekkie Town. 

"Our personnel corps is strong, our development programmes are starting to bear fruit and our business is showing healthy growth, in line with expectations. 

"We are very optimistic regarding our outlook for Tekkie Town."

He said the Tekkie Town Founders Trust, established by former chairman Braam van Huyssteen and the former shareholders of Tekkie Town, is not part of Star or Steinhoff and has no exposure to Steinhoff International. 

"In 2017 we paid two series of performance rewards from this fund to staff members who excelled."

Liquidity issues
Steinhoff International said in a statement on 18 January that the uncertainty relating to the accounting irregularities and unavailability of audited financial statements led to liquidity issues for the group. 

"As a result, the company has been engaged with lenders, bondholders, other financial creditors and its key credit insurers to ensure that sufficient liquidity has been maintained for the group's underlying operations and to seek additional liquidity funding for the central treasury functions of the group and the various operating businesses."

In two meetings with the group's lenders in South Africa, "the company was able to reiterate the strength of the financial position and trading performance of the businesses and investments in South Africa ...".

Read a related article: Tekkie Town focuses on client service

ARTICLE & PHOTOS: ALIDA DE BEER, GEORGE HERALD JOURNALIST

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