Santova completes Maritime deal


Santova completes Maritime deal

Published Date: 2019-08-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Santova completes Maritime deal

  • Santova has completed the acquisition of MLG Maritime Cargo Logistics;
  • The logistics group has been diversifying to make its earnings more resilient;
  • Wait for interim results at the end of October to see whether it has paid off.
  • Santova has wound up its acquisition of MLG Maritime Cargo Logistics (MCL) as it grows its presence along key international trade routes.

    The logistics group is paying up to €1.92 million for MCL, which operates as an international freight forwarding and logistics company and has a bonded warehouse in the Port of Hamburg. It was founded in 1996 by managing director Frank Heuer, who will assume the same role at Santova Logistics (Germany) following the recent retirement of the current MD.

    When it announced the deal in April, Santova said the deal would be settled in cash, with the first instalment of €1.26 million payable once all the conditions have been met and two instalments of €330,000 each over the next two years subject to the achievement of a profit warranty. The profit warranty requires MCL to achieve a minimum net profit before tax of €350,000 a year for the 24-month warranty period, failing which the goodwill component of the purchase price will be proportionately reduced.

    Last year, Santova raised its dividend by 7.1% to 7.5c despite encountering one of the toughest trading environments since the global financial crisis. Trade volumes were impacted by economic conditions in the key regions it operates in. While two acquisitions made over the course of the year contributed to an improvement in its billings/revenue margin to 8.1% from 8%, overall billings were impacted by a 2.2% decline in SA billings as a result of economic pressure on trade volumes.

    Its interim results for the year to end-August are due out by the end of October.

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