Santova’s shares surge on double-digit growth in interim earnings
DURBAN - Santova’s shares surged 15percent on the JSE yesterday after it reported double-digit growth in earnings for the six months to the end of August, boosted by the diversification of its operations.
The share closed 14percent higher at R2.28.
The international technology-based trade solutions specialist reported a 19.1percent increase in both headline earnings per share and earnings per share to 21.8cents a share during the period.
The group is represented in 10 countries, including South Africa, Mauritius, Germany, Netherlands, UK, Australia, Hong Kong, Singapore, Thailand and Vietnam.
Santova said its strategy was to continually develop and invest in key differentiators, predominantly technology and intellectual capital, that set it apart from its competitors. Revenue for the period increased 7.6percent to R211.8million, and net profit after tax rose 14.5percent to R33.5m.
Earnings from the group’s offshore operations grew 44.5percent, with strong contributions from the UK, the Asia Pacific and European regions. Offshore earnings now contribute 111.9percent of the group’s net profit after tax.
The South African region incurred an operational loss after tax of R2.4m due to the recessionary economic environment and the partial closures of ports during the hard-lockdown between March 26 and May 1, which significantly impacted clients’ ability to trade. The region incurred restructure costs of R2.6m as part of a strategy to align the business better with the group’s enhanced technological environment.
“South Africa remains a significant concern given the region’s current economic climate and impact of Covid-19 on the region. While the impact of Covid-19 on the group’s foreign operations has been limited to date, the group remains cautious in its approach to trading, while the full impact of the pandemic on global economies continues to unfold,” the group said.
The Asia Pacific region was a strong performer and increased its earnings by 112.3percent and contributed R14.2m to the group’s net profit after tax.
Santova’s capital and reserves increased by 12.1percent to R632.6m, due to an increase in profits and foreign exchange gains on the translation of foreign assets and liabilities.
Its net asset value a share increased by 27.2percent to 188c, due to the growth in capital and reserves and the ongoing repurchase of its own shares.
Borrowings decreased by R7.5m after the repayment of medium-term loan facilities. Borrowings were R43.8m at the end of August.
Cash generated from operations increased 57.4percent to R77.7m.
Santova said its board remained confident that its strategic diversification in both business activities and in geographies would bode well for sustainable earnings growth, particularly with its focus on the application of leading technological capabilities.