Santova's profit fell 14.2% to R61m in the year to end-February after difficult economic conditions were experienced across the key regions.
CAPE TOWN - Santova's profit fell 14.2percent to R61million in the year to end-February after difficult economic conditions were experienced across the key regions that it operates in. 

The logistics and supply chain solutions business has offices throughout South Africa, Mauritius, Australia, Germany, the Netherlands, the UK, Hong Kong and Mainland China. 

Its share price increased by up to 7percent yesterday to R2.60, after the results were published, in spite of the decline in profit. Traditionally Santova relied on diversification to provide a buffer against unforeseen economic conditions in individual regions. Revenue grew 3.9percent to R342.2m, as a result of an increase in group billings and an improvement in the billing/revenue margin. 

Two acquisitions contributed to the growth and to better margins. However, overall billings were impacted by 2.2percent decline in billings in South Africa as a result of economic pressure on trade volumes. Overhead expenses grew 9.9percent - excluding the impact of acquisitions, like-for-like overhead expenses increased by 3.9percent. Management described the 2019 year as “one of the most challenging trading environments since the global financial crisis of 2007 to 2008”. 

In South Africa, the ongoing subdued growth, lower consumer spending and lower levels of business confidence resulted in trade and shipment volumes declining by 12percent. Profit in the region declined 15.3percent. In the other three key regions, the UK, US and Europe, billings grew, but margins could not be maintained due to economic and currency pressures, plus regional pricing competition, and revenue declined. 

Billings in the UK and Netherlands grew by 5.1 and 2.1percent, respectively. Net cash generated from operations fell from R67.8m in 2018 to R20.2m in 2019. The outlook for the local economy was “flat” to "slightly optimistic".