Investec warns profits could fall 3pc after scandal at Poundland owner Steinhoff

Investec has warned the crisis at South African retailer Steinhoff could knock 3pc off its profits this year.

The asset manager, which is also South African but is listed on the London Stock Exchange, said it did not expect its credit exposures to Steinhoff and its subsidiaries, which include Britain’s Poundland, to harm its bottom line.

But it said its exposure to certain Steinhoff-linked derivatives could drag down its post-tax profits by up to 3pc.

Investec said it “manages credit exposures within strict risk parameters to avoid any specific concentrations in its credit portfolios. Thus, any one particular exposure would represent a small portion of the group's total credit and counterparty exposures, as is the case with the group's exposure to Steinhoff.”

Shares in Steinhoff, which also owns UK cut-price fashion chain Pep&Co, were more than cut in half on Wednesday after the retail giant announced its chief executive Markus Jooste was standing down following the discovery of “accounting irregularities requiring further investigation”.

Today it said it had hired PwC to probe its books and appointed a new board subcommittee to improve its governance standards.

Steinhoff’s biggest shareholder is billionaire Christo Wiese, whose acquisitive investment vehicle Brait has picked up stakes in Britain’s Iceland, New Look and Virgin Active in recent years.