Santova held back by weak trade winds. The logistics group says lower billings are a result of the weak SA economy but recent offshore acquisitions should put the wind back in its sails.

Santova says a dip in billings in the first half of its financial year is reflective of the tough SA economy, which remains the biggest contributor to overall billings. The unfavourable economic environment has also had a negative impact on trade volumes, further exacerbated by a 2.1% strengthening of the dollar against the rand in the six months to end-August.

Still, the logistics group has grown earnings, thanks to improved buying power, the containment of administration expenses and a big decrease in finance costs after it repaid one of its two Medium Term Loans. The profitability of its SA business was also helped by a 10.9% increase in profit at Santova Financial Services.

The offshore contribution to group profitability was positively impacted by a very strong performance from its Australian businesses and the benefits of merging its UK logistics business with WM Shipping. This was offset by a small drop in profitability in the Netherlands due to lower margins and higher administrative costs. Tradeway Shipping in the UK also reported a drop in profit off the high base set last year.

Gross billings declined by 1% to R1.95 billion over the period and revenue increased by 2.9% to R163 million. Headline earnings per share rose 2.1% to 21.13c. t

Santova said its debt to equity ratio improved to 25.5% from 46.5%, resulting it an 22.8% increase in its net asset value per share to 301.53c.

It said the outlook for the second half of the year remained uncertain due to the ongoing political, social and economic challenges facing SA. However, it said the benefits of its two most recent acquisitions in the UK and Singapore should start to be felt.

As the group enters its annual peak trading cycle the board is optimistic that the group's geographic, business activity and currency diversification will help to provide a solid platform for future growth," Santova said.

Its shares declined 1.3% to R3.15 yesterday.

Not saying SNV not a good company, but have never been able to see why it should be more highly rated than Value Group (VLE), other than having an offshore element and perhaps better (chance of) scaleability. VLE seems to still keep doing better on almost all metrics.

-- Ross Malt (@RossMalt) October 30, 2018