December 4, 2017 / 5:44 AM / a year ago

UPDATE 1-Steinhoff Africa Retail's FY operating profit jumps 25 percent

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JOHANNESBURG, Dec 4 (Reuters) - Steinhoff Africa Retail reported a 25 percent rise in full-year operating profit on Monday, thanks mainly to cost cuts and a strong showing at discount clothing chains.

Steinhoff Africa Retail (STAR), spun off from the one of the world’s biggest furniture retailers earlier this year, said operating profit came in at 6.1 billion rand ($443.15 million) in the year ended September, compared with 5.8 billion rand a year earlier.

The top-line growth of 13 percent was slower than the operating profit jump, indicating deep cost cuts including closure of underperforming stores.

“STAR’s strategic focus on lowering the cost of doing business and accessing new products and services through existing infrastructure drove group operating profit growth,” the company said.

Steinhoff, which owns Poundland in Britain, Mattress Firm in the United States and Conforama in France, spun off its African chains to get a higher rating for its developed market businesses and to give investors keen on exposure to Africa a chance to invest in STAR directly. ($1 = 13.7650 rand) (Reporting by Tiisetso Motsoeneng; Editing by Amrutha Gayathri)

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