Wrap Text
Interim Results
SANTOVA LIMITED
("Santova" or "the Company")
(Registration Number 1998/018118/06)
Share Code: SNV
ISIN: ZAE000159711
Santova Limited Group Interim Results
for the six months ended
31 August 2018
2018 Santova Group Interim Highlights
HEADLINE EARNINGS INCREASED BY 3,1%
REDUCTION IN DEBT TO EQUITY to 25,5%
TANGIBLE NET ASSET VALUE PER SHARE INCREASED BY 29,6%
2018 2017 %
August August Movement
Gross billings (R'000) 1 952 718 1 972 887 (1,0)
Revenue (R'000) 162 797 158 178 2,9
Profit before tax (R'000) 44 316 43 287 2,4
Billings margin (%) 8,3 8,0 0,3
Headline earnings (R'000) 33 740 32 739 3,1
Operating margin (%) 27,2 27,4 (0,2)
Percentage offshore
Earnings (%) 61,1 66,5 (5,4)
Basic earnings
per share (cents) 21,16 20,71 2,2
Headline earnings
per share (cents) 21,13 20,69 2,1
Total assets (R'000) 960 323 951 630 0,9
Capital and reserves (R'000) 485 563 392 447 23,7
Cash generated
from operations (R'000) 11 351 31 343 (63,8)
Cash and cash
Equivalents (R'000) 77 664 97 788 (20,6)
Debt to equity ratio (%) 25,5 45,7 (20,2)
Net asset value
per share (cents) 301,53 245,63 22,8
Tangible net asset
value per share (cents) 167,60 129,29 29,6
2018 Santova Interim Results Commentary
for the six months ended 31 August 2018
Overview
The Santova Group has achieved an overall 3,1% increase in
Headline earnings to R33.7 million (2017: R32.7 million) in the
first 6 months of the current financial year, which has translated
into a 2,1% increase in headline earnings per share to 21,13
cents (2017:20,69 cents).
This growth in earnings has been achieved despite a decrease in
total Group billings by 1,0% from R1.973 billion in 2017 to R1.953
billion in 2018, which is reflective of the difficult economic
environment currently being experienced in the South African
region, which is the Group's major contributor to overall
billings. This unfavourable economic environment in South Africa
had a negative impact on trade volumes which was further
exacerbated by a 2,1% strengthening of the average US Dollar to
South African Rand in these first 6 months.
The positive growth in earnings was achieved through several key
factors:
> A 0,3% increase in Group revenue to billings margin from 8,0% to
8,3% primarily in Santova Logistics (South Africa) and Tradeway
Shipping (United Kingdom). This is reflective of continued overall
improvement in the Group's transport cost 'buy rates' through
greater volumes and improved buying power;
> Growth in administration expenses being contained to 3,7%, which
is reflective of average inflation rates across the international
regions in which the Group operates;
> A 41,0% decrease in finance costs from R3.4 million in 2017 to
R2.0 million in 2018 as the Group repaid one of its two Medium
Term Loans in January 2018 and the current outstanding loan is
being repaid on an amortising basis; and
> A 0,5% decrease in the Group's effective tax rate to 23,8%,
which is a result of a recent trend of reducing corporate income
tax rates seen in some of the regions internationally where the
Group operates.
Regional Performances
South African Operations
The performance of the South African logistics operation mirrored
that of the overall Group achieving a very credible 4,1% increase
in profit despite lower trade volumes and a stronger South African
Rand to the US Dollar impacting on revenues for the period. This
was achieved through improved margins, cost containment and lower
finance costs as a result of ongoing debt repayment.
In addition, the profitability of the South African region was
further enhanced by Santova Financial Services recording a
meaningful 10,9% increase in profit for the year, through a
combination of modest premium growth and cost increases being
limited to below inflationary levels.
Foreign Logistics Operations
The current period was characterised by varying results across the
Group's offshore operations and very limited impact from currency
movements. On an overall basis the impact of currency movements on
the translation of the results from the Group's offshore
operations contributed only 1,2% to growth in profit for the
period. This is as a result of the average South African Rand
exchange rate during the period strengthening against the
Australian Dollar and Hong Kong Dollar but weakening against the
British Pound and Euro.
The offshore contribution to Group profitability was positively
impacted by a very strong performance from the Australian region
and the benefits of consolidation seen in the newly merged Santova
Logistics UK/W.M. Shipping entity in the United Kingdom, which
resulted in a 43,1% and 91,7% increase in profit respectively in
these regions, in local currency.
This was offset by a 3,7% decline in profitability in the
Netherlands region through lower margins and higher administrative
costs, despite a growth in billings. In addition, an 11,9%
reduction in profitability in Tradeway Shipping (United Kingdom)
where the exceptional performance of 2017 and the sudden 'boost'
in export activity following the collapse of the British Pound
after the Brexit vote, could not be replicated in the current
period.
Group Operations
The level of central administrative and finance costs incurred at
a Group reporting level saw a 37,8% improvement as a result of
lower finance costs through ongoing debt repayment and
administrative cost, in particular human resources costs, being
contained in line with the current economic environment and Group
performance.
Financial Position
The Group's financial position has strengthened considerably with
total Capital and Reserves growing 16,7% to R485.6 million (Feb
2018: R416.2 million) and the Group's debt to equity ratio
improving from 46,5% as at the previous financial year-end to
25,5% currently. This resulted in the net asset value per share
increasing by 22,8% to 301,53 cents (2017: 245,63 cents) and is a
result of several factors including:
> Ongoing repayment of long term amortising debt and lower current
usage levels in South Africa of the short-term banking facilities
utilised to fund trade receivables, following the reduction in
billings in the current period;
> A significant weakening in the South African Rand late in the
current financial period against the key reporting currencies of
the Group's foreign subsidiaries. This resulted in exchange gains
across all major asset categories including a R22.6 million gain
on intangible assets and a R45.6 million foreign currency
translation gain in other comprehensive income; and
> The continuing growth in profitability of the Group.
Cash and cash equivalents decreased during the period by R30.7
million from R108.4 million as at the most recent financial year-
end to R77.7 million as at the end of the current reporting
period. This was due to:
> The final warranty payment in March 2018 of R17.4 million to the
sellers of Tradeway (Shipping) (United Kingdom) acquired in 2015;
> The acquisition in July 2018 of ASM Logistics (Singapore) for a
total purchase consideration of R13.4 million of which R8.3
million was paid upfront; and
> The ongoing capital repayment of the Group's Medium Term Loan.
Cash Flow and Funding
Cash generated from operations decreased 63,6% to R11.4 million
(2017: R31.3 million) in the current period primarily due to a
strong trading performance across the Group's foreign subsidiaries
in August resulting in an additional R14.6 million investment into
net working capital across these regions.
As detailed above, cash and cash equivalents decreased to R77.7
million as at the end of the current period due to acquisitions
and ongoing repayment of debt. However, the Group remains
confident that it has sufficient cash and bank facilities
available for working capital and growth opportunities as
demonstrated by the recent R75 million general acquisition
facility approved by the Group's primary transactional banker.
Outlook
The outlook remains uncertain for the second half of the current
financial year particularly as regards to the ongoing political,
social and economic challenges facing South Africa. However, 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. In addition, the benefits of the Group's two most
recent acquisitions in the United Kingdom and Singapore should
start to be felt in the second half of the current financial year.
For and on behalf of the Board,
WA Lombard GH Gerber
Chairman Chief Executive Officer
30 October 2018
Condensed Statement of Profit and
Loss and other Comprehensive Income
Unaudited Audited
6 months to 6 months to 12 months to
31 August 31 August 28 February
2018 2017 2018
Notes R'000 R'000 R'000
Gross billings 1 952 718 1 972 887 4 123 540
Revenue 154 595 150 062 311 354
Net interest
Income 8 202 8 116 17 923
Interest and
financing fee
income 15 596 18 184 39 831
Interest and
financing fee
expenses (7 394) (10 068) (21 908)
Revenue and net
interest income 2 162 797 158 178 329 277
Other income 5 373 5 794 14 362
Depreciation
and amortisation (1 717) (1 494) (3 355)
Administrative
Expenses (120 252) (115 971) (239 628)
Operating profit 46 201 46 507 100 656
Interest received 101 145 279
Finance costs (1 986) (3 365) (5 998)
Profit before
Taxation 44 316 43 287 94 937
Income tax
Expense (10 528) (10 494) (23 670)
Profit for the
period/year 33 788 32 793 71 267
Attributable to:
Equity holders
of the parent 33 774 32 771 71 252
Non-controlling
interests in
subsidiaries 14 22 15
Other comprehensive
Income
Exchange
differences
arising from
translation
of foreign
operations 45 644 10 229 (3 933)
Gain on
revaluation
of property 36
Total comprehensive
income 79 432 43 022 67 370
Attributable to:
Equity holders
of the parent 79 402 43 001 67 362
Non-controlling
interests in
subsidiaries 30 21 8
Basic earnings
per share (cents) 21,16 20,71 44,87
Diluted basic
earnings per
share (cents) 21,13 20,11 43,89
Dividends per
Share (cents N/A N/A 7,00
Condensed Statement of Financial Position
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
Notes R'000 R'000
ASSETS
Non-current
assets 252 211 219 981 213 995
Property, plant
and equipment 23 126 21 426 20 379
Intangible
assets 4 215 674 185 887 181 411
Financial
assets 5 6 449 3 545 4 366
Deferred
taxation 6 962 9 123 7 839
Current assets 708 112 731 649 750 381
Trade
receivables 578 219 578 165 579 376
Other
receivables 51 501 55 211 62 142
Current tax
receivable 517 485 492
Financial
rssets 5 211 - -
Cash and cash
equivalents 77 664 97 788 108 371
Total assets 960 323 951 630 964 376
EQUITY AND LIABILITIES
Capital and
reserves 6 485 563 392 447 416 172
Non-current
liabilities 19 957 32 065 22 323
Interest-bearing
borrowings 7 15 980 30 640 21 039
Long-term
provision 1 284 1 425 1 284
Financial
liabilities 2 682 - -
Deferred
taxation 11 - -
Current
liabilities 454 803 527 118 525 881
Trade and other
payables 248 979 232 675 202 320
Current tax
payable 8 245 5 318 7 246
Current
portion of
interest-bearing
borrowings 7 15 380 20 361 15 561
Amounts owing
to related
parties 274 244 220
Financial
liabilities 5 2 881 27 883 17 350
Short-term
borrowings
and overdraft 170 121 226 058 265 097
Short-term
provisions 8 923 14 579 18 087
Total equity
and liabilities 960 323 951 630 964 376
Condensed Statement of Changes in Equity
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
CAPITAL AND RESERVES
Balance at beginning
of period/year 416 172 365 567 365 567
Total comprehensive
income 79 432 43 022 67 369
Treasury shares
acquired - (49) (1 534)
Share-based equity
reserve 650 1 012 1 620
Shares issued in
terms of exercise
of share options 517 232 559
Costs to issue
securities (6) - (72)
Dividends paid (11 202) (6 066) (6 066)
Acquisition of
minority interest - (11 271) (11 271)
Balance at end
of period/year 485 563 392 447 416 172
Comprising:
Stated capital 220 541 218 931 219 514
Equity
compensation
reserve 6 380 5 966 6 246
Property
revaluation
reserve 36 - 36
Treasury Shares (3 197) (1 679) (3 197)
Foreign currency
translation reserve 25 802 (5 672) (19 827)
Accumulated profit 235 915 174 832 213 344
Attributable to equity
holders of the parent 485 477 392 378 416 116
Non-controlling
Interests 86 69 56
Capital and reserves 485 563 392 447 416 172
Condensed Statement of Cash Flows
Unaudited Audited
6 months to 6 months to 12 months to
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
Cash generated
from operations 11 351 31 343 92 139
Interest received 101 145 279
Finance costs (1 955) (2 910) (5 300)
Taxation paid (8 667) (9 386) (19 358)
Net cash flows
from operating
activities 799 19 192 67 760
Cash outflows
from the
acquisition of
subsidiaries (5 572) - -
Settlement of
acquired contingent
purchase consideration (17 380) - -
Plant and equipment
and intangible
assets acquired (2 835) (6 072) (8 399)
Proceeds on disposals
of plant and equipment
and intangible assets 155 386 425
Net cash flows on
acquisition of
minority interest - - (11 271)
Net cash flows
from investing
activities (25 632) (5 686) (19 245)
Borrowings repaid (8 055) (6 092) (20 745)
Issue of shares
for cash 510 233 489
Dividends paid (11 202) (6 066) (6 035)
Cash generated/
(utilised) in
other financing
activities 54 (19) (1 592)
Net cash flows
from financing
activities (18 693) (11 944) (27 883)
Net (decrease)/
increase in cash and
cash equivalents (43 526) 1 562 20 632
Difference arising
on translation 12 819 4 375 (4 033)
Cash and cash
equivalents at
beginning of
period/year 108 371 91 780 91 772
Cash and cash
equivalents at
end of period/year 77 664 97 717 108 371
Cash and cash equivalents is made up as follows:
Cash and cash
equivalents on hand 77 664 97 788 108 371
Less: Bank overdrafts - (71) -
Cash and cash
equivalents at
end of period/year 77 664 97 717 108 371
Consolidated Segmental Analysis
Supply Chain Financial Head
Services Services Office Consolidated
R'000 R'000 R'000 R'000
BUSINESS SEGMENTS
31 August 2018
Revenue and net
interest income 158 077 5 052 (333) 162 797
Operating profit 44 550 2 052 (402) 46 201
Profit/(loss) for
the period 34 036 2 081 (2 330) 33 787
Total assets 848 955 16 405 94 963 960 322
Total liabilities 487 487 674 (13 401) 474 759
Depreciation and
amortisation 1 482 37 198 1 717
Capital
expenditure 2 370 38 427 2 835
31 August 2017
Revenue and net
interest income 153 783 4 767 (372) 158 178
Operating profit 45 760 1 808 (1 061) 46 507
Profit for
the period 34 660 1 876 (3 743) 32 793
Total assets 847 849 14 119 89 662 951 630
Total liabilities 537 710 936 20 537 559 183
Depreciation and
amortisation 1 262 38 194 1 494
Capital
expenditure 6 014 - 58 6 072
SUPPLY CHAIN SERVICES
Europe
and
Asia United
Africa Pacific Kingdom TOTAL
R'000 R'000 R'000 R'000
GEOGRAPHICAL SEGMENTS
31 August 2018
Revenue and net
interest income 69 073 15 654 73 351 158 077
Operating profit 18 319 6 768 19 463 44 550
Profit for the period 13 219 5 659 15 158 34 036
Total assets 481 731 75 335 291 889 848 955
Total liabilities 302 785 31 105 153 597 487 487
Depreciation and
amortisation 687 119 676 1 482
Capital expenditure 705 29 1 636 2 370
31 August 2017
Revenue and net
interest income 66 288 15 855 71 640 153 783
Operating profit 17 754 6 219 21 787 45 760
Profit for the period 12 501 5 073 17 086 34 660
Total assets 520 458 62 177 265 214 847 849
Total liabilities 375 201 32 624 129 885 537 710
Depreciation and
Amortisation 837 108 317 1 262
Capital expenditure 425 1 045 4 544 6 014
Supplementary Information
for the six months ended 31 August 2018
1.BASIS OF PREPARATION
The unaudited condensed consolidated interim financial statements
for the six months ended 31 August 2018 have been prepared and
presented in accordance with the framework concepts and the
measurement and recognition requirements of International
Financial Reporting Standards ("IFRS"), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee,
and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the listings requirements of the JSE
Limited, the information as required by IAS 34: Interim Financial
Reporting, and the requirements of the South African Companies Act
71 of 2008.
The accounting policies applied in preparation of these interim
financial statements are consistent with those applied in the
annual financial statements for the year ended 28 February 2018
with the exception of new IFRS standards which became effective as
detailed below.
The Group has adopted all the new, revised or amended accounting
pronouncements as issued by the International Accounting Standards
Board (IASB) which were effective for the years beginning on or
after 1 January 2018. The following standards were adopted by the
Group:
IFRS 9 Financial Instruments (IFRS 9)
The Group has applied the expected credit loss method as detailed
IFRS 9 by using the simplified approach. The application of a
provision matrix to the groups trade receivables based on historic
default rates with an adjustment for forward looking events has
not resulted in a materially different provision from the previous
standard.
The application of IFRS 9 has not resulted in the
reclassification of any of the Group's financial assets and
liabilities.
IFRS 15 Revenue from Contracts with Customers (IFRS 15)
The Group has done a thorough assessment of its performance
obligations under IFRS 15 and specific analysis on the agent vs
principle concept. The Group is satisfied that the performance
obligations are satisfied in line with the Group's existing
revenue recognition criteria and as result there is no
effect on the timing of revenue being recognised. The Group has
further satisfied itself that it acts in an agency capacity in the
provision of logistics and related services.
As reported in previous results, the adoption of these standards
did not have a material impact on the Group.
This report was prepared under the supervision of the Group
Financial Director, DC Edley, CA(SA) and has not been reviewed or
audited by the Group's external auditors.
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
2.REVENUE
Gross Billings 1 952 718 1 972 887 4 123 540
Less: Recoverable disbursements (1 789 921)(1 814 709) (3 794 263)
Revenue and net interest income 162 797 158 178 329 277
Revenue from contracts with
customers: 154 595 150 062 311 354
Supply chain services 149 875 145 667 302 601
Insurance commission and
management fees 4 720 4 395 8 907
Other revenue - - (154)
Net interest income from the
provision of credit
facilities comprises: 8 202 8 116 17 923
Interest and financing
fee income 15 596 18 184 39 831
Interest and financing
fee expenses (7 394) (10 068) (21 908)
Revenue and net interest income 162 797 158 178 329 277
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
3.EARNINGS PER SHARE
Reconciliation between basic
and headline
earnings per share:
Profit attributable to
equity holders of the parent 33 774 32 771 71 252
Adjusted for:
Net profit on disposals of
plant and equipment (47) (69) (72)
Taxation effects 13 37 37
Headline earnings 33 740 32 739 71 217
Basic earnings
per share (cents) 21.16 20.71 44.87
Headline earnings
per share (cents) 21.13 20.69 44.84
Weighted average number
of shares (000s) 159 612 158 265 158 814
Diluted weighted average
number of shares (000s) 163 129 162 984 162 334
The difference between earnings per share and diluted earnings per
share is due to the impact of share options that are yet to vest
under the Group's share option schemes.
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
4.INTANGIBLE ASSETS
Goodwill Movement:
Carrying value at beginning
of period/year 173 449 173 656 173 656
Foreign exchange gain/(loss)
on translation 22 663 5 112 (207)
Acquisition of ASM Logistics
(S) Pte Ltd 9 353 - -
Carrying value at end
of period/year 205 465 178 768 173 449
Carrying value of computer
software and indefinite
useful life intangible assets 10 209 7 119 7 962
Total intangible assets 215 674 185 887 181 411
1.Acquisition of ASM Logistics (S) Pte Ltd
Effective 2 August 2018, the Group acquired the entire issued
share capital of ASM Logistics (S) Pte Ltd. The company operates
as a supply chain logistics business out of Singapore. The
acquisition was concluded for a purchase price of R13 383 495 to
be settled entirely in cash as follows:
- R8 324 120 paid upfront by Santova International Holdings, the
Group's designated domestic treasury company and
- two separate contingent payments payable after two subsequent
12 month periods based on a warranted annual profit being
achieved, amounting to a net present value on acquisition date of
R5 051 065.
The fair value, on acquisition date, of the assets acquired was
R4 303 167 and the R9 353 329 by which the purchase price exceeds
the fair value of the assets acquired, attributable to anticipated
profitability and expected cash generation, has been recognised as
goodwill.
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
Level Notes R'000 R'000 R'000
5. FAIR
VALUE
DISCLOSURE
FOR
FINANCIAL
INSTRUMENTS
Financial
assets in
the
statement
of
financial
position
measured at
fair value:
Future
Profit
share on
rental
agreement 2 1 3 502 1 992 1 992
Guardrisk cell
Captive 2 2 2 947 1 553 2 374
Forward exchange
Contracts 1 211 - -
6 660 3 545 4 366
Financial
liabilities in
the statement of
financial position
measured at fair
value:
Contingent
Purchase
considerations
on acquisitions 3 3 5 563 16 175 17 287
Purchase
consideration on
acquisition 3 4 - 11 584 -
Forward exchange
Contracts 1 - 124 63
5 563 27 883 17 350
Hierarchy for fair value measurement
Fair value determination:
Level 1 - Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly or
indirectly.
Level 3 - Inputs for the asset or liability that are not based on
observable market data.
There were no transfers between the fair value hierarchy levels
during the year.
1. Santova Logistics (South Africa) entered into a profit sharing
agreement with the landlord of their Durban premises on inception
of the lease in the 2007 financial year. This agreement gives
Santova Logistics a specified portion of the actual or deemed
profit made should the building be sold or vacated. The inputs
used to determine the fair value of the profit share are as
follows:
Current net market rental R118 per m2
Capitalisation rate 10,75 %
2. This amount represents the fair value of the investment by
Santova Logistics (South Africa) in the Guardrisk cell captive,
recognised as a financial asset with changes in fair value being
recognised in profit or loss for the year. The fair value of the
cell captive is determined by the net asset value that represents
fair value.
3. This represents the present value of the remaining contingent
purchase obligations arising from acquisitions during the current
financial period. The fair value of the liabilities has been
calculated as the net present value of the warranty payments,
which management reasonably expect to be achieved, as set out in
the agreement of sale, discounted at the weighted average cost of
capital for the acquired entity. The financial liability can be
reconciled as follows:
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
Financial liability
at beginning of
period/year 17 287 15 093 15 093
Interest on present
value calculation 32 496 697
Foreign exchange loss on
translation 609 586 57
Payments made during the
period/year (17 380) - -
Fair value loss on
remeasurement - - 1 440
Financial Liability arising
on acquisition of ASM
Logistics (S) Pte Ltd 5 015 - -
Financial liability at
end of period/year 5 563 16 175 17 287
The contingent purchase obligation relates to the following
acquisition that was completed during the current financial year:
Acquiring company Financial year Target company Discount rate
Acquired used
Santova International
Holdings (Pty) Ltd 2019 ASM Logistics 7,2%
(S) Pte Ltd
During the current financial year, the group acquired 100% of ASM
Logistics (S) Pte Ltd. The acquisition gave rise to a financial
liability as a result of contingent purchase obligations. The
weighted average cost of capital used in the calculation of the
fair value of this financial liability is equal to that being used
to calculate the fair value of the financial liability to the
sellers of ASM Logistics (S) Pte Ltd.
4. This financial liability represented the amount owing following
the acquisition of the 25% minority interest in Santova Logistics
Pty Ltd (Australia) by Santova International Holdings (Pty) Ltd.
This amount was not contingent on any future performance and the
full amount will be settled from cash reserves. The acquisition
was concluded but pending final payment at 31 August 2017. The
payment was concluded in the 2018 financial year.
Management have assessed the sensitivity of the level 3 fair value
measurement to changes in unobservable inputs and do not believe
that such reasonably expected changes would materially affect the
fair value.
Management have assessed the degree of classification of the
liabilities within level 3 and are satisfied that the
classification above is appropriate due to the fact that these
liabilities are measured using the same methods and thus do not
have varying degrees of uncertainty or subjectivity.
There were no other material adjustments to fair values of
financial instruments nor transfers between the fair value
hierarchy levels during the period.
Unaudited Audited
31 August 31 August 28 February
2018 2017 2018
R'000 R'000 R'000
6.STATED CAPITAL
Reconciliation of the
value of ordinary
shares in issue
Balance at beginning of
period/year 219 514 214 625 214 625
Shares issued under share
option scheme 1 033 465 1118
Costs to issue securities (6) - (70)
Shares issued in terms of
scrip dividend - 3 841 3841
Balance at end of
period/year 220 541 218 931 219 514
Reconciliation of the number
of ordinary shares in issue '000 '000 '000
Balance at beginning of
period/year 159 231 157 760 157 760
Shares issued under share
option scheme 800 310 769
Shares issued in terms
of scrip dividend - 1 212 1 212
Treasury shares purchased
by subsidiaries - (15) (510)
Balance at end
of period/year 160 031 159 267 159 231
?
Unaudited Audited
31 August 31 August 28 February
installment 2018 2017 2018
Repayable Rate R'000 R'000 R'000 R'000
7.INTEREST BEARING
BORROWINGS
Instalment sale
and other
agreements 54 272 157
Medium term loan
(R39 million)1 Monthly Prime less
0,5% 813 - 4 864 -
Medium term loan
(R60 million)2 Quarterly Prime less
0,25% 3 874 30 672 45 862 36 443
Medium term loan
(SGD 150,000) 3 Monthly Business
Installment
Loan Board
rate plus
0.31% 49 634 - -
31 360 50 998 36 600
Debt to Equity
Ratio 26% 46% 47%
1. The original medium term loan was taken by Santova Logistics
(South Africa) and was fully repaid during 2018.
2. The second medium term loan was taken by the holding company,
Santova Limited in order to fund a portion of the purchase price
payable for the acquisition of Tradeway (Shipping) Limited. The
loan is repayable on an amortising basis over five years and is
secured by cross company sureties supplied by subsidiary
companies.
3. The third medium term loan was acquired through the acquisition
of ASM Logistics (S) Pte Ltd. The loan installments are payable
monthly at SGD 4,798. The loan bears interest at the Business
Installment Loan Board rate plus 0.31%.
As a condition of granting the medium term loan facilities, the
Group banking facilities contain certain covenants with respect to
minimum levels of actual shareholders' funds and to minimum ratios
of debt to EBITDA and interest cover. These covenants are
monitored on an ongoing basis by management and reviewed and
confirmed annually with the Group's bankers. As at the end of the
period, none of the covenants have been breached.
8.EVENTS AFTER THE REPORTING PERIOD
Acquisition of SAI Logistics Limited (United Kingdom)
On 18 October 2018 Tradeway (Shipping) Limited, a wholly owned
subsidiary of Santova International Holdings (Pty) Limited,
entered into an agreement for the acquisition of 100% of the
shares in SAI Logistics Limited ("SAI Logistics") with effect from
1 October 2018. SAI Logistics is an international freight
forwarding agent and operator of a bonded warehouse based in
Milton Keynes, United Kingdom.
The total purchase consideration for the acquisition is GBP
3,195,754 made up as follows:
GBP
Forecasted net asset value at effective date 701 031
Goodwill 2 494 723
Total 3 195 754
The total purchase consideration will be paid in installments over
a period of 3 years with an amount of GBP 1,438,090 being paid
upfront upon completion and the balance being paid subject to an
annual profit before tax warranty target of GBP 595,919 being met.
The total purchases consideration will be paid in cash and funded
primarily from a drawdown from a new general acquisition R75
million facility approved by the Groups primary bankers. The loan
will be repaid over a period of 6 years with the first 12 months
on an interest only basis.
Other than the above, there are no significant events that have
occurred in the period between the end of the period under review
and the date of this report.
Corporate Information
SANTOVA LIMITED
Country of incorporation
Republic of South Africa
Registration number
1998/018118/06
Share code
SNV
ISIN
ZAE000159711
NATURE OF BUSINESS
International logistics solutions provider
DIRECTORS
Independent Non-Executive Directors
WA Lombard (Chairman)
ESC Garner
AD Dixon
EM Ngubo
Executive Directors
GH Gerber (Chief Executive Officer)
DC Edley (Group Financial Director)
AL van Zyl
COMPANY SECRETARY
JA Lupton, FCIS
Highway Corporate Services (Pty) Ltd
PO Box 1319, Hillcrest, 3650
JSE SPONSOR
River Group
Unit 2, 211 Kloof Street, Waterkloof, Pretoria 0145
GROUP AUDITOR
Moore Stephens
50 Oxford Road, Parktown
Johannesburg, 2193
SHARE REGISTRAR
Computershare Investor Services (Pty) Ltd
PO Box 61051, Marshalltown, 2107
LEGAL ATTORNEY
Livingston Leandy Inc PO Box 4107, Umhlanga Rocks, 4320
INVESTOR RELATIONS
Contact Persons
GH Gerber (Chief Executive Officer)
DC Edley (Group Financial Director)
Email Address
investor@santova.com
Contact number
+27 31 521 0160
SANTOVA HEAD OFFICE AND REGISTERED OFFICE
Physical address
53 Richefond Circle, Umhlanga Ridge, 4319
Postal address
PO Box 6148, Durban, 4000
Registered Office
Santova House, 88 Mahatma Gandhi Road,
Durban, 4000
Contact number
+27 31 374 7000
CORPORATE BANKERS
Nedbank Limited
PO Box 1144, Sandown, 2196
A Specialist Provider of Innovative Global Trade Solutions.
Santova' s diversiÞcation in terms of geographies, currencies,
industries, products and services enables it to manage a global
network of inter-connected activities for multinational
organisations from origin to point-of-consumption.
This diversification also enables it to hedge against unexpected
'regional risks' whilst at the same time allowing it to capitalise
on opportunities that may present themselves globally.
Santova House
88 Mahatma Gandhi Road
Durban, 4001
Tel: +27 31 374 7000
Email: enquiries@santova.com
www.santova.com
Durban
30 October 2018
Sponsor and Corporate Advisor
River Group
Date: 30/10/2018 02:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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