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Audited abridged group results and dividend declaration
SANTOVA LIMITED
Registration number 1998/018118/06
Share code SNV
ISIN ZAE000159711
AUDITED ABRIDGED GROUP RESULTS
for the year ended 28 February 2013
- 14,2% increase in basic - 17,5% increase in net asset
earnings per share value per share
- 19,6% increase in capital - 2,5 cps maiden ordinary
and reserves dividend declared
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
28 February 29 February
2013 2012
R'000 R'000
Gross billings 2 640 037 2 605 858
Turnover 178 790 167 107
Other income 8 535 3 910
Depreciation and amortisation (3 070) (3 776)
Administrative expenses (143 221) (127 816)
Operating profit 41 034 39 425
Interest received 2 014 1 328
Finance costs (9 239) (10 690)
Profit before taxation 33 809 30 063
Income tax expense (8 712) (7 564)
Profit for the year 25 097 22 499
Attributable to:
Equity holders of the parent 24 688 22 079
Minority interest 409 420
Other comprehensive income
Exchange differences arising from translation of
foreign operations (945) 2 179
Total comprehensive income 24 152 24 678
Attributable to:
Equity holders of the parent 23 473 24 011
Minority interest 679 667
Basic earnings per share (cents) 18,06 15,82
Diluted basic earnings per share (cents) 18,00 15,82
Dividends per share (cents) 2,50
SUPPLEMENTARY INFORMATION
Audited Audited
28 February 29 February
2013 2012
R'000 R'000
Reconciliation between earnings and headline earnings
Profit attributable to equity holders of the parent 24 688 22 079
Net loss on disposals of plant and equipment 171 314
Impairment of loan 41
Derecognition of financial liability (713)
Taxation effects (49) (91)
Minority interest (1) (25)
Headline earnings 24 096 22 318
Shares in issue (000's) 136 459 134 277
Weighted average number of shares (000's) 136 725 139 547
Diluted number of shares (000's) 137 165 139 547
Shares for net asset value calculation (000's) 136 459 134 277
Performance per ordinary share
Headline earnings per share (cents) 17,62 15,99
Diluted headline earnings per share (cents) 17,57 15,99
Net asset value per share (cents) 108,20 92,12
CONDENSED STATEMENT OF CASH FLOWS
Audited Audited
28 February 29 February
2013 2012
R'000 R'000
Profit before taxation 33 809 30 063
Adjustments for non-cash flow items 8 681 13 420
Changes in working capital (11 835) (45 456)
Interest received 2 014 1 328
Finance costs (9 087) (10 319)
Taxation paid (8 827) (7 918)
Net cash flows from operating activities 14 755 (18 882)
Cash outflows from the acquisition of subsidiaries (35 738) (2 426)
Cash utilised in other investing activities (2 332) (3 224)
Net cash flows from investing activities (38 070) (5 650)
Net cash flows from financing activities 41 217 19 735
Net increase/(decrease) in cash and cash equivalents 17 902 (4 797)
Effects of exchange rate changes on cash and cash equivalents 1 012 935
Cash and cash equivalents at beginning of year 9 626 13 488
Cash and cash equivalents at end of year 28 540 9 626
Cash and cash equivalents are made up as follows:
Cash and cash equivalents 29 545 12 786
Less: Bank overdrafts (1 005) (3 160)
Cash and cash equivalents at end of year 28 540 9 626
CONDENSED STATEMENT OF CHANGES IN EQUITY
Audited Audited
28 February 29 February
2013 2012
R'000 R'000
Capital and reserves
Balance at beginning of year 123 699 103 415
Total comprehensive income 24 152 24 678
Recognition of costs directly related to share issues
capitalised to equity (3)
Repurchase of shares in terms of odd-lot and specific offer (281)
Share commitments arising on grant of put options (3 642)
Recognition of costs directly related to share buybacks in equity (471)
Equity reserves arising from grant of equity-settled share options 115
Balance at end of year 147 963 123 699
Comprising:
Stated capital 145 307 145 200
Share commitments (5)
Contingency reserve 210
Foreign currency translation reserve 1 785 3 000
Accumulated loss (2 155) (27 053)
Attributable to equity holders of the parent 144 937 121 352
Minority interest 3 026 2 347
Capital and reserves 147 963 123 699
CONDENSED STATEMENT OF FINANCIAL POSITION
Audited Audited
28 February 29 February
2013 2012
R'000 R'000
ASSETS
Non-current assets 122 247 73 171
Plant and equipment 8 308 8 365
Intangible assets 109 883 60 356
Financial asset 522 522
Deferred taxation 3 534 3 928
Current assets 436 369 345 208
Trade receivables 368 931 320 311
Other receivables 36 764 11 046
Current tax receivable 1 129 304
Amounts owing from related parties 761
Cash and cash equivalents 29 545 12 786
Total assets 558 616 418 379
EQUITY AND LIABILITIES
Capital and reserves 147 963 123 699
Non-current liabilities 54 364 5 023
Interest-bearing borrowings 37 402 164
Long-term provision 1 966 1 976
Financial liabilities 14 996 2 882
Deferred taxation 1
Current liabilities 356 289 289 657
Trade and other payables 199 664 139 002
Current tax payable 3 650 253
Current portion of interest-bearing borrowings 3 430 157
Amounts owing to related parties 167 246
Financial liabilities 445 2 596
Short-term borrowings and overdraft 137 829 138 252
Short-term provisions 11 104 9 151
Total equity and liabilities 558 616 418 379
CONDENSED SEGMENTAL ANALYSIS
South Foreign
Africa Operations Group
GEOGRAPHICAL SEGMENT R'000 R'000 R'000
28 February 2013
Turnover (external) 129 835 48 955 178 790
Operating profit 28 878 12 156 41 034
Net profit 16 329 8 768 25 097
Total assets 482 944 75 672 558 616
Total liabilities 360 646 50 007 410 653
Depreciation and amortisation 2 496 574 3 070
Capital expenditure 2 440 595 3 035
29 February 2012
Turnover (external) 138 300 28 807 167 107
Operating profit 34 934 4 491 39 425
Net profit 18 781 3 718 22 499
Total assets 385 638 32 741 418 379
Total liabilities 273 082 21 598 294 680
Depreciation and amortisation 3 072 704 3 776
Capital expenditure 4 812 648 5 460
Logistics
Services Insurance Group
BUSINESS SEGMENT R'000 R'000 R'000
28 February 2013
Net profit 22 500 2 597 25 097
Total assets 553 034 5 582 558 616
Total liabilities 409 510 1 143 410 653
29 February 2012
Net profit 21 523 976 22 499
Total assets 413 547 4 832 418 379
Total liabilities 292 399 2 281 294 680
COMMENTARY
GROUP PROFILE
The Santova Group provides sophisticated integrated logistics solutions for clients worldwide, operating from
offices throughout South Africa and internationally in Australia, Netherlands, United Kingdom and Hong Kong.
The Group assumes responsibility for the entire supply chain from supplier to point of consumption and does
so through a highly client-centric approach, by providing clients with detailed supply chain analysis and offering
virtual supply chain management through the use of OSCAR®. OSCAR® is a unique logistics software solution
developed by the Group, which interfaces directly with client systems providing real time information, electronic
documentation, process automation and business intelligence tools.
BUSINESS REVIEW
Against the backdrop of another year of challenging business conditions, which has proved that South Africa is
not immune to the fallout of the woes affecting Europe and the United States, the Santova Group has produced
commendable results. Focus in the past year on strengthening the offshore businesses and diversifying the
Group's operations into other regions, products and services has paid off and its ability to diversify and respond
quickly to new opportunities is the key to the Group's growth and sustainability in the years ahead.
The most significant events that have taken place within the Group over the past year have been the following:
- The acquisition of W.M. Shipping Limited in the United Kingdom, which was effective in November 2012;
- The rebranding of Impson Logistics under the name of Santova Logistics, resulting in all of the Group's
subsidiary companies globally, with the exception of the newly acquired W.M. Shipping Limited, now
bearing the Santova name;
- The merger of Santova Logistics and Santova Logistics South Africa, the Group's two wholly owned South
African logistics subsidiaries, into one entity. This brings significant operational efficiencies and synergies to
our South African operations; and
- The establishment of a specialised Group marketing office in Sandton, Johannesburg from which to drive
the Group's marketing and supply chain analysis initiatives nationally.
FINANCIAL REVIEW
The 2013 financial period saw the Santova Group continue the trend, established in recent financial periods, of
achieving constant earnings growth and a strengthening of its financial position.
Profitability
The Group achieved solid growth in profit for the year of 11,6% from R22,5 million to R25,1 million, which was
leveraged upwards into a 14,2% bottom line increase in basic earnings per share from 15,82 cents to
18,06 cents. This was due to a lower weighted average number of shares in issue during the current period.
Segmental analysis
The benefits from the Group's international expansion strategy are starting to become evident through the
diversification of the Group's earnings away from its previous reliance on the South African market. In the current
financial period R8,8 million of profit for the year or 35% of the total profit was generated outside of South
Africa, compared with R3,7 million or 17% in the past financial year.
Acquisition of W.M. Shipping Limited (United Kingdom)
2013 saw the Group's first acquisition in two and half years, whereby it acquired 100% of the share capital of
W.M. Shipping, operating as a traditional freight forwarder and clearing company out of Birmingham, and settled
the purchase consideration entirely in cash. R61,2 million was raised internally from dividends received from
Group subsidiaries and from cash reserves acquired as part of the transaction. The balance of the purchase
consideration, amounting to a present value at effective date of R16,2 million, is payable in three separate
contingent payments over a period of 24 months based on certain profit warranties being met.
The fair value, on acquisition date, of the assets acquired was R25,4 million, and the R52,0 million by which the
purchase price exceeds the fair value of the assets acquired is attributable to anticipated profitability and
expected cash generation recognised as goodwill.
The effective acquisition date of the transaction was 23 November 2012 resulting in a contribution of R4,2
million of W.M. Shipping profits to the Group's current year results.
Financial position
Net asset value increased from R123,7 million to R148,0 million, which translates into a highly credible 17,5%
increase in net asset value per share to 108,2 cents from 92,1 cents.
Cash flows/funding
On a very positive note the Group has, for the first time since the 2010 financial year, returned to a position
where positive cash flows are being generated from operating activities, generating R14,8 million in the current
year versus a utilisation of R18,9 million in the previous financial year. In turn the Group's cash and cash
equivalents at year end have more than doubled to R29,5 million from R12,8 million in the prior year.
OUTLOOK
Whilst the outlook for world economies for the year ahead is relatively 'flat' to 'slightly optimistic', we are
confident that not only will we be capable of meeting the challenges as they present themselves but will
capitalise further on our entrepreneurial capability and the 'spirit' in which we engage such challenges.
SUBSEQUENT EVENTS
Subsequent to the year end, a contract entered into between Santova Logistics South Africa (Pty) Ltd and
AP Lion Investments (Pty) Ltd, the company's former landlord, became effective. In terms of International
Financial Reporting Standards ("IFRS"), this is a material non-adjusting event after the reporting period, that
requires disclosure. Full details regarding the nature of this event and an estimate of its financial impact can be
found in note 29 to the Annual Financial Statements, which can be found on the Group's website.
BASIS OF PREPARATION
The condensed consolidated financial statements for the year ended 28 February 2013 have been prepared
and presented in accordance with the framework concepts and the measurement and recognition requirements of 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 and the information required by International
Accounting Standard 34: Interim Financial Reporting.
The Group's accounting policies comply fully with IFRS; the Companies Act, No 71 of 2008, as amended; and
the Listings Requirements of the JSE Limited, and are consistent with those applied in the annual financial
statements for the year ended 29 February 2012.
PREPARER OF FINANCIAL STATEMENTS
The audited abridged Group results have been prepared under the supervision of DC Edley CA (SA),
the Group Financial Director.
AUDIT OPINION
The condensed consolidated financial statements have been derived using the Group annual financial statements
and are consistent in all material respects with the Group annual financial statements. The Company's
independent auditors, Deloitte & Touche, have issued an unmodified opinion on the 28 February 2013 Company
and Group annual financial statements and on these abridged Group results. The audit was conducted in
accordance with International Standards on Auditing and a copy of their audit report is available for inspection at
the Company's registered office.
The auditor's report does not necessarily cover all of the information contained in this announcement/financial
report. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's
work, they should obtain a copy of that report together with the accompanying financial information from the
registered office of the company.
DIRECTORATE
There has been only one change to the composition of the Board during the current reporting period; being the
resignation of Mr Gary Knight as an executive director of the Company, on 28 February 2013.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of Santova will be held in the Harbour View Boardroom,
Santova House, 88 Mahatma Gandhi Road, Durban, 4001 on Tuesday, 30 July 2013 at 12:00 to transact
business as stated in the notice of the Annual General Meeting. The notice of the Annual General Meeting forms
part of the 2013 Annual Integrated Report which will be posted to shareholders on or about 28 May 2013.
APPRECIATION
The Board would like to express its appreciation to all management and staff for their efforts during the year.
For and on behalf of the Board
GH Gerber DC Edley
Chief Executive Officer Group Financial Director
17 May 2013
DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a maiden gross dividend of 2,5 cents per ordinary share,
payable out of income for the year ended 28 February 2013.
In terms of South African Dividends Tax, the following additional information is disclosed:
Local dividend withholding tax rate 15%
STC credits available for set-off Nil
Net local dividend payable to shareholders who
are not exempt from Dividends Tax 2,125 cents per ordinary share
Total number of ordinary shares in issue 136 459 406
Company income tax reference number 9077/274/84/4P
The following salient dates will apply to the dividend payment:
Last day to trade cum-dividend Friday, 19 July 2013
Shares commence trading ex-dividend Monday, 22 July 2013
Record date Friday, 26 July 2013
Dividend payment date Monday, 29 July 2013
Share certificates may not be dematerialised or rematerialised between Monday, 22 July 2013 and Friday,
26 July 2013, both dates inclusive.
By order of the Board
JA Lupton
Company Secretary
17 May 2013
OSCAR®
INTEGRATED LOGISTICS SOFTWARE SOLUTION
We have embraced the power in unlocking supply chain data, facilitating
multiple entry and access points, allowing data uploads and downloads
and linking this all with powerful communication tools. Modules within
OSCAR® facilitate the following processes, amongst others:
order processing and control - shipping instructions - scheduling - track and trace
foreign exchange control - forecasting - delivery scheduling - inventory control
electronic documentation distribution - costing - statistical reporting
management reporting - warehousing control and management - quality control
third party instructions and communication
Registration number 1998/018118/06 Share code SNV ISIN ZAE000159711
REGISTERED OFFICE Santova House, 88 Mahatma Gandhi Road, Durban, 4001
POSTAL ADDRESS PO Box 6148, Durban, 4000
EXECUTIVE DIRECTORS GH Gerber (CEO), DC Edley (GFD) (appointed 1 March 2012),
GM Knight (resigned 28 February 2013), AL van Zyl
NON-EXECUTIVE DIRECTORS ESC Garner (Chairman)*, WA Lombard*, AD Dixon*, S Donner *Independent
TRANSFER SECRETARIES Computershare Investor Services (Pty) Limited, 70 Marshall Street, Marshalltown, 2107
COMPANY SECRETARY JA Lupton, FCIS
AUDITORS Deloitte & Touche (Registered auditor: SD Munro)
JSE SPONSOR River Group, Durban, 20 May 2013
www.santova.com
Date: 20/05/2013 02:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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