Would-be Poundland owner Steinhoff is getting frosty about sterling

 
Helen Cahill
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The international group wants to gobble up Poundland - but is worried about sterling (Source: Getty)

South African retail giant Steinhoff has warned that the slump in sterling after the Brexit vote could hit its businesses in Britain - including Harveys and Bensons for Beds.

The conglomerate - which is attempting to buy Poundland - said the fall in sterling could have an "unfavourable effect when translating our businesses' earnings reported in euro".

It also warned that its UK bed businesses will be at a disadvantage because it is exposed to US dollar and other currencies, "which could have an adverse effect on future margin".

The warning shot from Steinhoff came as part of its trading update for the year ending 30 June. The discount retailer said it had delivered a "solid set of results amidst volatile markets and currencies".

The company's revenue was up 33 per cent to €13.1bn; operating profit increased 32 per cent to €1.5bn.

"In regions such as Germany, Spain, Portugal and eastern Europe where the group is actively expanding its footprint, market share growth is expected to continue," Steinhoff said.

"In the United Kingdom and Australasia, focus remains on increasing market share in all segments of the resilient bedding market."

The group recently upped its offer for Poundland. It now says it will pay 227p in cash for each Poundland share - putting the retailer's value at £610.4m.

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