Steinhoff buys South African shoe shop Tekkie Town and increases annual profits

Oliver Gill
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Shoe Sale
Tekkie Town has 302 stores across South Africa (Source: Getty)

The new owner of Poundland has bought a South African shoe shop chain and reported a 32 per cent rise in annual operating profit.

Steinhoff announced on Wednesday that it had agreed to buy Tekkie Town, a retailer with 302 stores across South Africa, but it did not disclose how much it paid for the business. The deal is expected to complete by the end of year.

It was a busy day for Steinhoff as it also unveiled annual results and convinced shareholders of Poundland to accept a 227p takeover deal.

Revenues increased to €13.1bn (£11.1bn) from €9.9bn with profits increasing from €0.9bn to €1.2bn. This translated well into cash as the amount generated from operations for the year was also €1.2bn

"The Steinhoff group delivered a satisfactory set of results, underscored by a resilient discount market as well as strong leadership and execution from our decentralised management teams," said chief executive Markus Jooste.

The deal with Poundland was passed with 98 per cent of shareholders voting in favour. The 227p deal was increased from Steinhoff's original 222p offer.

Despite being rivalled by Elliott Advisors, Steinhoff was determined to gain shareholder approval after missing out on deals to buy Home Retail Group and European-based electronics retailer Darty.