The South African owner of Poundland has said that it may have to restate more historic accounts as an accounting scandal at the company deepens.
Steinhoff, which also owns Harvey’s and Bensons for Beds, was plunged into crisis last month after revelations of accounting irregularities linked to its 2016 accounts.
Yesterday the firm said although an internal investigation is ongoing, the restatement of the financial statements “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triggered a share price collapse, a management overhaul, lenders deserting the firm and credit insurance being withdrawn from its operating companies.
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 1.47 billion euro 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.
The firm had previously made attempts to strengthen its holdings with regards to British firms.
It 2016 it lost out in a battle with Sainsbury’s to buy Argos owner Home Retail Group.
It was also outbid for London-listed white goods retailer Darty.
Late last year Investec warning that its exposure to the price of shares in Steinhoff’s operations had the potential to dampen its own levels of profitability.