Santova holds dividend due to global trade uncertainty


Santova holds dividend due to global trade uncertainty

Published Date: 2020-05-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Santova holds dividend due to global trade uncertainty

The logistics group says its resources are best conserved at this time due to ongoing uncertainty in the global economy.

Santova is playing it safe despite a strong rise in full-year earnings in what it described as a challenging and complex operating environment. The logistics group has decided not to pay a full-year dividend due to current economic uncertainty, which has resulted in companies cutting back on purchases of capital equipment and consumers spending less on durable goods.

Santova said its performance was supported by organic growth in the UK and Europe, as well the acquisitions of SAI Logistics in the UK and Singapore's ASM Logistics during the previous financial year. Last year, it added German logistics and freight forwarding company MLG Maritime Logistics to its portfolio. As a result, the contribution of offshore earnings to total earnings rose to 79.5% from 58.3%, giving it a welcome hedge against the weakening rand. It also benefitted from a lower tax rate due to its expansion into regions with lower corporate income tax rates than SA.

Revenue rose 20.9% in the year to end-February. Net profit came in 6.4% higher at R64.9 million as a big rise in earnings from its UK operations compensated for a decline in SA earnings. Headline earnings per share increased by 6.7% to 40.78c. Its net asset value (NAV) per share improved by 16.7% to 365.55c over the course of the year while its tangible NAV was 11.5% higher at R1.73 per share.

Over the course of the year, it bought back just over 5.9 million of its own shares at an average price of R2.08 per share. It said it would continue to opportunistically repurchase stock at the right price.

It said it was too early to quantify the full extent to which this year's profitability would be impacted by the coronavirus.

Its shares rose 7.1% to R1.50 yesterday.

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