Steinhoff International results. A European business now.

Steinhoff International released results for the year to end June 2011 yesterday afternoon. Marcus Jooste is definitely a smooth operator, and the business has done "great things" over the years. The business itself has lots of moving parts, and the recent acquisition in France and shuffling of their South African businesses, injected them into JD Group. Plus also, Steinhoff acquired the Polish business of JD Group. But that was really small, the acquiring of Conforama is basically business changing. Continental Europe now contributes 60 percent of all sales. Therefore, this is not by a country mile a South African business anymore, in fact Southern Africa contributes 21 percent to group revenue.

Their commentary part about ye olde worlde retail business is quite informative: "In sharp contrast to the economic woes of Europe, the economies and consumer confidence in central continental Europe showed strong resilience which supported our growth in this market." See that, turns out at the top end (see Richemont trading update) and at the bottom end, things are not so bad. Must be a struggling middle class, oh wait, all of Europe is largely middle class, not so?

The UK retail business looks less appealing (boiled versus grilled). Steinhoff say that economic conditions remain uncertain. Equally down under and in the land of the long white cloud, Aussie and New Zealand, the word challenging comes up. An interesting business in terms of their geographical mix, a nice segmental spread, 47 percent of revenues coming from retail, household goods, with a 38 percent contribution from Manufacturing and sourcing, whilst logistics services contribute 13 percent of revenue, whilst 2 percent of revenue is from corporate services. Two thirds of all assets are retail related, 17 percent is manufacturing and sourcing.

They were held back by a firmer currency during the reporting period, with nearly four out of every five Rands in revenue outside of South Africa. Operating margins were crimped to 12.6 percent, down a full 110 basis points from this time last year, but the business is a different one now, so it will be more fair to see how that margin holds up over the next 36 months. Revenue increased 21 percent to 43 billion ZAR, profits increased to 5.3 billion ZAR, whilst HEPS from continuing operations came in at 241 cents per share, the distribution declared was 2 cents better than last time, 65 cents per share payable