Wrap Text
Preliminary Audited Results and Dividend Announcement
SANTOVA LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/018118/06)
Share code: SNV
ISIN: ZAE000159711
(“Santova” or “the Company”)
PRELIMINARY AUDITED RESULTS
AND DIVIDEND ANNOUNCEMENT
for the year ended 28 February 2017
2017 SANTOVA PRELIMINARY RESULTS COMMENTARY
The impressive performance of the Group for the year certainly does
not reflect the realities of the trading environment in which we find
ourselves. However, it can be said that such an achievement is the
result of a ‘sound business model’ whose performance has emanated
out of a strong culture founded on sound business principles and values.
The year was one of the most challenging in the last seven years and
notwithstanding a significantly strengthened Rand, a weak Pound (due
to Brexit) and extremely challenging economic conditions in South
Africa, the diversified nature of the earnings of the Group limited
the impact of these challenges which have adversely affected so many
companies in South Africa. Revenue of R315,4 million for the year is
13,2% up on the previous year’s figure of R278,7 million and net profit
before tax has increased by 31,9% to R88,0 million from R66,7 million.
The result of this has been a 15,6% increase in basic earnings per
share and a 15,4% increase in headline earnings per share, both diluted
by the increased level of shares in issue following the capital raising
in the prior year to fund the acquisition of Tradeway (Shipping).
Regionally, good progress was made in Hong Kong, Australia, Germany,
the Netherlands and in particular South Africa, where a good recovery
was made in the second half of the financial year, amidst local
socio-eco-political challenges and declining trade volumes. Yet again,
offshore earnings strengthened even further and now constitute 62,1%
of total earnings, up 4,8% from 57,3%
in 2016.
In short focused,‘hands-on’ leadership and the Group’s strategic
direction and business model have once again served the Group well.
TRANSCENDING CHALLENGES
Whilst a solid set of results were achieved, the following were
challenges that the Group successfully transcended:
- Brexit, which was followed by a weakening of the Pound resulting
in reduced local operating profit margins;
- The strengthening Rand, which impacted on the gross profit
margins of our domestic operations, where currency based freight
profit margins and fees raised on disbursements (value of goods)
have been reduced. This has also had an impact on Group earnings
where the consolidation of offshore earnings (reporting in
Rands) has resulted in reduced contributions;
- Whilst the Group has shown impressive organic growth, the extent
of that growth has been limited by the relatively small
contribution that emanated out of Germany and the loss recorded
in Mauritius. However, we need to acknowledge that these two
businesses constitute ‘grass roots’ operations that have been
identified as strategic investments for the Group going forward.
Their progress during the year has been positive and looks well
set to continue the upward trend;
- The disappointing performance of WM Shipping has also had an
impact on the Group results. This can be attributed to limited
vessel capacity and low freight rates, which characterised the
shipping industry during 2016, and in particular, the trade
lanes between the United Kingdom, the Caribbean and the Middle
East. Whilst higher rates will benefit this business (greater
margins) in the medium to long term, the impact in the short
term is adverse; and
- The socio-eco-political quagmire that continues to pose a
significant threat to the sustainability of the South African
economy. The result of which has been significantly diminished
trade volumes throughout virtually all sectors of the South
African economy with 2016 being the worst of the last five-year
downward trend.
STRATEGIC PRIORITIES
The performance of the Group against our four key objectives:
growth, diversification, innovation and efficiency and
effectiveness, has been strong.
The Group has achieved sound organic growth in most of the offices
worldwide. This growth has been generated mainly through new business
development, particularly in South Africa, Hong Kong, Australia,
the Netherlands and Germany.
Most impressive is South Africa, where amidst unrelenting eco-political
challenges and diminishing trade volumes, the high rate at which new
business has been signed on has hedged Santova against the industry
norm of negative or very limited growth. In what can currently be
described as a ‘disrupted’ South African logistics environment, our
global footprint, end-to-end supply chain solutions and next generation
technological capability have enabled us to differentiate ourselves from
our competitors through meeting the ever-growing complexity in client
supply chain processes. In Europe, our offices in both the Netherlands
and Germany continue to make meaningful progress in both new business
development and trade route development. This has been largely achieved
off the back of greater consolidated volumes, which has offered this
region highly competitive buy rates. The fact that the Netherlands
serves as a strategic gateway for most of Europe has ensured sustainable
year-on-year growth in this region.
Closely aligned to our growth model, is our unrelenting focus on
diversifying the business. This diversification relates not only to
services but also markets, geographies, currencies and niche trade
routes, internationally. The test of such decisions is always based
on the attractiveness of the opportunity (economic/cultural fit),
cost-to-entry (money/time) and value add (competitive advantage/
earnings enhancing) that may prevail in such opportunities. The
purpose being to lessen our risk whilst at the same time promoting
or accelerating quality earnings growth. Our acquisition of Tradeway
and the introduction of the Group’s client sourcing and procurement
services division are good examples of such diversification, both
of which have contributed to quality earnings growth.
Our third key priority concerns the continuous process of innovation
and its effective application (relevance) in the market. It is widely
acknowledged that the logistics industry is in a state of change and
faces the prevailing threat of being commoditised. However, despite
this ever-present threat, relatively few service providers have embraced
or leveraged off technological advancements. It is in this context that
Santova has continued to institutionalise the drive for efficiency-
effectiveness through innovation and most importantly, next generation
technological advancements. In so doing, we are now close to taking the
offshore operations to their next level of capability, which will enable
virtual end-to-end solutions and a common global system, including
predictive analytics. Our offices in the United Kingdom and in particular
the Netherlands, will no doubt benefit from such capability as their
expansive client bases have not been exposed to such technological
integration, data extraction and automated report writing.
No less important is our fourth priority of continuous improvement in
business efficiency and effectiveness. Particularly, as it relates to
our internal operating environment where changes (challenges) imposed
upon us have been effectively managed through the continuous
re-engineering of workflow processes, systems and standard operating
procedures. This has also been well supported by our South African
operation whose ISO 9001 2008 certification (quality management systems
standard) has enhanced customer satisfaction through the effective
application and continual improvement of the system, including the
assurance of conformity to customer and applicable statutory and
regulatory requirements. This, together with the single cloud based
IT platform currently being rolled-out worldwide, will facilitate
even greater effectiveness and efficiencies by being able to house
all information relating to the operational activities in the supply
chain in a single central database. The result of this will be the
elimination of a significant amount of duplication in data capturing
and operational procedures that is typical of today’s 3PL service providers.
LOOKING FORWARD
Looking forward, there are four priorities on which the group is focused:
- Acquisitions: further entrenching our business offshore through
one or two acquisitions that are located on strategic trade
routes, enabling the continued diversification of the Group in
terms of geographic regions, currencies, industries and
services;
- Technology: the migration of the Group onto next generation
information and communication technologies (Tradenav®) which
will facilitate the faster processing of data, easier retrieval
of information, elimination of errors and efficiency in the time
it takes to complete a shipment;
- Advanced supply chain services: the continued deployment of
advanced client - centric supply chain services and solutions
throughout the United Kingdom and Europe, particularly the
Netherlands and Germany; and
- Talent pool: investing in, developing and cultivating dedicated,
skilled, and knowledgeable employees (internationally) who are
attuned to the Group’s entrepreneurial culture and knowledge
intensive business model.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 28 February 2017
Consolidated
2017 2016
Notes R'000 R'000
ASSETS
Non-current assets 213 265 262 221
Property, plant and equipment 18 540 25 086
Intangible assets 4 178 494 222 881
Financial assets 5 6 332 4 536
Deferred taxation 9 899 9 718
Current assets 682 807 760 944
Trade receivables 539 111 590 133
Other receivables 51 463 46 743
Current tax receivable 453 385
Financial assets 5 - 26
Cash and cash equivalents 91 780 123 657
Total 896 072 1 023 165
EQUITY AND LIABILITIES
Capital and reserves 365 567 386 415
Stated capital 214 625 214 076
Treasury shares (1 631) (998)
Equity compensation reserve 5 185 3 028
Foreign currency translation reserve (15 901) 62 044
Accumulated profit 156 117 102 027
Attributable to equity holders
of the parent 358 395 380 177
Non-controlling interest 7 172 6 238
Non-current liabilities 38 930 76 329
Interest-bearing borrowings 36 552 57 043
Long-term provision 1 425 1 500
Financial liabilities 5 - 17 786
Deferred taxation 953 -
Current liabilities 491 575 560 421
Trade and other payables 205 464 216 154
Current tax payable 4 001 8 000
Current portion of interest-
bearing borrowings 20 541 18 620
Amounts owing to related parties 246 302
Financial liabilities 5 15 135 31 348
Short-term borrowings and
overdrafts 228 380 262 918
Short-term provisions 17 808 23 079
Total equity and liabilities 896 072 1 023 165
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 28 February 2017
Consolidated
2017 2016*
Notes R'000 R'000
GROSS BILLINGS 4 073 868 3 797 890
Revenue 2 299 034 266 167
Net interest income 16 381 12 488
Interest and financing fee income
recovered from clients 38 923 33 347
Interest and financing fee expenses
incurred (22 542) (20 859)
Revenue after net interest income 2 315 415 278 655
Other income 22 765 11 196
Depreciation and amortization (5 921) (4 043)
Administrative expenses (235 476) (215 022)
Operating profit 96 783 70 786
Interest received 427 205
Finance costs (9 187) (4 255)
Profit before taxation 88 023 66 736
Income tax (23 403) (16 841)
Profit for the year 64 620 49 895
Attributable to:
Equity holders of the parent 62 791 48 713
Non-controlling interests 1 829 1 182
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
- Exchange differences arising from
translation of foreign operations (78 840) 42 796
- Net actuarial (loss)/gain on
remeasurement of post-retirement
medical aid benefit liability (62) 18
Total comprehensive (Loss) /Income (14 282) 92 709
Attributable to:
Equity holders of the parent (15 216) 90 330
Non-controlling interests 934 2 379
Basic earnings per share (cents) 3 39,87 34,50
Diluted basic earnings per share
(cents) 38,53 33,68
Dividends per share (cents) 6,25 5,50
* Restated due to material prior
period error (refer to note 2)
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2017
Foreign
Equity currency
Treasury compen- trans- Accu-
Stated Share sation lation mulated
capital reserve reserve reserve profit
R’000 R’000 R‘000 R’000 R’000
Balances at 145 192 - 1 703 20 445 59 090
28 February 2015
Total comprehensive
income - - - 41 599 48 731
Share-based equity
reserve charged to - - 1 335 - -
profit or loss
Foreign currency
differences on
translation of
share option expense - - (10) - -
Treasury shares
acquired - (998) - - -
General issue
of shares 51 282 - - - -
Vendor issue of
shares to sellers
of Tradeway 17 714 - - - -
Shipping Limited
Costs to issue
securities (112) - - - -
Dividends paid to
shareholders - - - - (5 794)
Balances at 214 076 (998) 3 028 62 044 102 027
29 February 2016
Total comprehensive
income - - - (77 945) 62 729
Share-based equity
reserve charged to - - 2 448 - -
profit or loss
Treasury shares acquired - (633) - - -
Shares issued under
share option scheme 549 - (276) - -
Transfer of equity
compensation reserve - - (15) - 15
Dividends paid to
shareholders - - - - (8 654)
Balances at 214 625 (1 631) 5 185 (15 901) 156 117
28 February 2017
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2017 - continued
Minority Total
Total interest equity
R’000 R’000 R’000
Balances at 226 430 3 859 230 289
28 February 2015
Total comprehensive
income 90 330 2 379 92 709
Share-based equity
Reserve charged to
profit or loss 1 335 - 1 335
Foreign currency
differences on
translation of
share option expense (10) - (10)
Treasury shares
acquired (998) - (998)
General issue
of shares 51 282 - 51 282
Vendor issue of
shares to sellers
of Tradeway
Shipping Limited 17 714 - 17 714
Costs to issue
securities (112) - (112)
Dividends paid to
shareholders (5 794) - (5 794)
Balances at 380 177 6 238 386 415
29 February 2016
Total comprehensive
income (15 216) 934 (14 282)
Share-based equity
reserve charged to
profit or loss 2 448 - 2 448
Treasury shares acquired (633) - (633)
Shares issued under
share option scheme 273 - 273
Transfer of equity
compensation reserve - - -
Dividends paid to
shareholders (8 654) - (8 654)
Balances at 358 395 7 172 365 567
28 February 2017
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOW
for the year ended 28 February 2017
Consolidated
2017 2016
R'000 R'000
OPERATING ACTIVITIES
Cash generated from operations 90 080 48 226
Interest received 427 205
Finance costs (7 337) (3 628)
Taxation paid (26 696) (14 389)
Net cash flows from operating activities 56 474 30 414
INVESTING ACTIVITIES
Plant and equipment acquired (1 606) (3 041)
Intangible assets acquired and developed (2 658) (3 220)
Proceeds on disposals of plant and
equipment and intangible assets 265 310
Settlement of acquired contingent
purchase consideration (24 077) -
Net cash flows on acquisition of
subsidiaries - (59 275)
Net cash flows from investing activities (28 076) (65 226)
FINANCING ACTIVITIES
Borrowings (repaid)/raised (18 829) 48 775
Issue of shares for cash 273 51 170
Purchase of treasury shares (633) (998)
(Decrease)/Increase in amounts owing
to related parties (56) 86
Dividends paid (8 654) (5 794)
Net cash flows from financing activities (27 899) 93 239
Net increase in cash and cash equivalents 499 58 427
Difference arising on translation of
foreign operations (31 619) 19 576
Cash and cash equivalents at beginning
of year 122 892 44 889
Cash and cash equivalents at end of year 91 772 122 892
Cash and cash equivalents is made up
as follows:
Cash and cash equivalents 91 780 123 657
Less: Bank overdrafts (8) (765)
Cash and cash equivalents at end of year 91 772 122 892
CONSOLIDATED SEGMENTAL ANALYSIS
for the year ended 28 February 2017
Logistics Financial Head
Services Services Office GROUP
R’000 R’000 R’000 R’000
BUSINESS SEGMENTS
28 February 2017
Gross billings 4 191 572 9 500 38 265 4 239 337
External 4 064 978 8 624 266 4 073 868
Internal 126 594 876 37 999 165 469
Revenue after net
interest income 306 677 9 500 (762) 315 415
Depreciation and
amortisation (4 900) (76) (945) (5 921)
Operating profit 86 772 3 843 6 168 96 783
Interest received 424 909 (906) 427
Finance costs (2 875) (1) (6 311) (9 187)
Income tax expense (20 987) (1 009) (1 407) (23 403)
Profit for the year 63 334 3 742 (2 456) 64 620
Total assets 792 295 12 767 91 010 896 072
Total liabilities 505 841 763 23 901 530 505
29 February 2016 *
Gross billings 3 902 726 9 978 38 472 3 951 176
External 3 788 217 8 973 700 3 797 890
Internal 114 509 1 005 37 772 153 286
Revenue after net
interest income 269 177 9 978 (500) 278 655
Depreciation and
amortisation (2 580) (48) (1 415) (4 043)
Operating profit 64 916 4 493 1 377 70 786
Interest received 1 361 683 (1 839) 205
Finance costs (2 850) - (1 405) (4 255)
Income tax expense (15 351) (1 085) (405) (16 841)
Profit for the year 48 076 4 091 (2 272) 49 895
Total assets 859 903 10 077 153 185 1 023 165
Total liabilities 563 073 840 72 837 636 750
LOGISTICS SERVICES
Asia United
Africa Pacific Kingdom Europe TOTAL
R’000 R’000 R’000 R’000 R’000
GEOGRAPHICAL SEGMENTS
28 February 2017
Gross billing 2 524 680 230 834 681 210 628 254 4 064 978
Revenue after net
interest income 134 022 31 728 72 897 68 032 306 677
Operating Profit 31 121 13 606 15 833 26 211 86 772
Net profit 20 455 10 292 12 809 19 777 63 333
Total assets 492 369 61 514 159 035 79 377 792 295
Total liabilities 360 153 20 206 66 702 58 780 505 841
29 February 2016*
Gross billings 2 709 556 193 080 402 910 482 671 3 788 217
Revenue after net
interest income 131 234 24 977 54 446 58 520 269 177
Operating Profit 26 816 7 047 14 136 16 917 64 916
Net profit 18 271 5 092 11 426 13 287 48 076
Total assets 519 764 59 744 194 263 86 132 859 903
Total liabilities 413 121 21 001 75 720 53 231 563 073
* Restated due to material prior period error (refer to note 2)
SUPPLEMENTARY INFORMATION
for the year ended 28 February 2017
1. BASIS OF PREPARATION
The audited preliminary summarised consolidated financial
statements have been prepared in accordance with the framework
concepts and the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) and 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 as a
minimum, contains the information required by IAS 34: Interim
Financial Reporting and comply with the Listings Requirements
of the JSE Limited and the Companies Act of South Africa, 2008.
The full consolidated annual financial statements from which
these summarised consolidated financial statements were derived
are available on request from the Group’s registered office.
The accounting policies applied in the preparation of the full
consolidated annual financial statements from which the
summarised consolidated financial statements were derived are
in accordance with IFRS and are consistent with those of the
audited consolidated annual financial statements for the year
ended 29 February 2016.
These summarised consolidated financial statements and the full
consolidated annual financial statements have been prepared
under the supervision of D C Edley, CA (SA) and were approved
by the board of directors on 17 May 2017.
2016
2017 Restated*
R'000 R'000
2. REVENUE
Gross Billings 4 073 868 3 797 890
Less: Recoverable disbursements (3 758 453) (3 519 235)
Revenue after net interest income 315 415 278 655
Revenue from the provision of
services comprises: 299 034 266 167
Logistics services 290 295 256 690
Insurance commission and
management fees 8 624 8 973
Other revenue 115 504
Net interest income from the
provision of credit facilities
comprises: 16 382 12 488
Interest and financing fee
income recovered from clients 38 923 33 347
Interest and financing fee
expenses incurred (22 542) (20 859)
Revenue after net interest income 315 415 278 655
Correction of prior period material error
During the 2015 and 2016 financial years the Group undertook
two voluntary restatements within its Statement of Cash Flows
and Statement of Profit or Loss and Other Comprehensive Income.
These two restatements were initiated as part of a structured
process to better reflect the Group’s business model within its
primary reporting statements, thereby giving users a better
understanding of the Group’s principal source of revenue and
cash flows. The difficulty experienced during this process is
the complexity of the Group’s business model as it primarily
provides logistics services in an Agency capacity on behalf of
clients and at the same time provides clients with significant
financing facilities and value added financial services.
During the course of 2017 it was identified that certain
aspects of the 2016 restatement did not fully comply with IFRS
and due to this error, the 2016 financial results are required
to be restated. The aspect of the 2016 restatement that did not
fully comply with IFRS was the disclosure of interest and
finance fee income from client financing activities in revenue
net of the interest and finance fee expenses. International
Accounting Standard 18 on Revenue specifically allows for the
disclosure of interest and finance fee income in revenue, but
does not allow for the set off of interest and finance fee
expenses therefrom. Interest and finance fee income was
disclosed on this basis in 2016 in order to better demonstrate
the Group’s business model and to strike a balance between the
disclosure of revenue earned in an Agency capacity, net of
recoverable disbursements, and that of the disclosure of
financial services related revenue.
In order to correct this error, whilst still adequately
demonstrating to users the Group’s business model, the Revenue
line item in the Statement of Profit or Loss and other
Comprehensive Income has been restated to exclude interest and
finance fee income and expenses and these two line items have
been disclosed separately below revenue on the face of the
Statement of Profit or Loss and other Comprehensive Income.
This restated disclosure is consistent with accepted industry
practice within the financial services sector for the reporting
and disclosure of interest and finance fee income and expenses.
In essence it gives the user a greater level of detail on the
face of the Statement of Profit or Loss and other Comprehensive
Income and due to the transparency thereof, allows users to
clearly assess the source of the interest and finance fee
income and expenses and to easily compute the total revenue and
finance charges earned and incurred by the Group.
The effect of the restatement on the 2016 financial results can
be seen below and has no impact on basic and/or diluted
earnings per share:
2016 2015
Restated 2016* Restated 2015*
R'000 R'000 R'000 R’000
Revenue 266 167 278 655 212 797 224 235
Net interest income 12 488 11 438 -
Interest and financing
fee income recovered
from clients 33 347 - 33 495 -
Interest and financing
fee expenses incurred (20 859) - (22 057) -
Revenue after net
interest income 278 655 278 655 224 235 224 235
* As reported
2017 2016
3. EARNINGS PER SHARE
Basic earnings per share (cents) 39,87 34,50
Headline earnings per share (cents) 39,89 34,58
Diluted basic earnings per
share (cents) 38,53 33,68
Diluted headline earnings
per share (cents) 38,55 33,76
Profit on
Reconciliation Ordinary Taxation Minority Net
between basic and activities effect interest effect
headline earnings: R’000 R’000 R’000 R’000
February 2017
Profit for the year 88 023 (23 403) (1 829) 62 791
Adjusted for:
– Loss on disposals of
plant and equipment 46 (14) (3) 229
Headline earnings 88 069 (23 417) (1 833) 62 820
February 2016
Profit for the year 66 736 (16 841) (1 182) 48 713
Adjusted for:
– Loss on disposals of
plant and equipment 256 (84) (52) 120
Headline earnings 66 992 (16 925) (1 234) 48 833
2017 2016
Numbers of shares on which Shares Shares
calculations are based: 000’s 000’s
Shares in issue at end of year 158 247 157 287
Weighted Average Number of
Ordinary Shares ("WANOS") at
end of year 157 495 141 211
Diluted WANOS at end of year 162 975 144 648
The difference between earnings per share and diluted earnings
per share is due to the impact of share options that are yet to
vest from the Group’s share option scheme.
4. INTANGIBLE ASSETS
Consolidated
2017 2016
R’000 R’000
Goodwill Movement
Carrying value at beginning of year 217 472 118 944
Amounts recognised from acquisitions
of subsidiaries:
- Tradeway (Shipping) - 75 854
- AEMC Trading - 1 498
Translation (loss)/ gain (43 816) 21 176
Carrying value at end of year 173 656 217 472
Carrying value of computer software and
indefinite useful life intangible assets 4 838 5 409
Total intangible assets 178 494 222 881
5. FAIR VALUE DISCLOSURE FOR FINANCIAL INSTRUMENTS
2017 2016
Notes R’000 R’000
Financial assets in the statement
of financial position measured at
fair value:
Future profit share on rental
agreement 1 1 991 1 228
Guardrisk cell captive 2 4 341 3 308
Forward exchange contracts - 26
6 332 4 562
Financial liabilities in the
statement of financial position
measured at fair value:
Contingent purchase considerations
on acquisitions 3 (15 093) (49 134)
Forward exchange contracts (42) -
(15 135) (49 134)
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. This asset has been assessed in being level 2 in the
fair value hierarchy. The inputs used to determine the fair
value of the profit share are as follows:
Current net market rental (including parking bays) R110 per m2
Capitalisation rate (on a vacant basis) 15,00 %
2. This 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. This asset has
been assessed in being level 2 in the fair value hierarchy. 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
previous financial period. The fair value of the liabilities
has been calculated as the net present value of the warranty
payments, which management reasonably expects to be achieved,
as set out in the agreements of sale, discounted at the
weighted average cost of capital for the acquired entities.
This asset has been assessed in being level 3 in the fair value
hierarchy. The financial liability can be reconciled as
follows:
2017
R'000's
Financial liability at beginning of year 49 134
Interest on present value calculation 1 848
Foreign exchange gain on translation (9 930)
Payments made during the year (24 073)
Fair Value gain on remeasurement (1 886)
Financial liability at end of year 15 093
The contingent purchase obligations relate to the following
acquisitions that were successfully completed during the
previous financial year:
Discount
Acquiring company Target company rate used
Santova International Tradeway (Shipping) 6,60%
Holdings (Pty) Ltd Limited
Prior to the acquisition of Tradeway (Shipping) Limited, the
target company acquired Tradeway North West. This 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 Tradeway
(Shipping) Limited.
The final warranty payment is payable within 60 days of
30 November 2017.
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.
6. INTEREST RECEIVED
Consolidated
2017 2016*
R’000 R’000
Interest received from financial
institutions as per statement
of comprehensive income 427 205
Interest and financing fee income recovered
from clients included in Note 2 (Revenue) 38 923 33 347
Total interest income 39 350 33 552
7. FINANCE COSTS
Financial liabilities (refer note 5) 1 786 630
Interest-bearing borrowings 7 241 3 607
Other interest paid 160 18
As per Statement of Comprehensive Income 9 187 4 255
Interest and financing fee expenses
incurred included in Note 2 (Revenue) 22 542 20 859
Total finance costs 31 729 25 114
* Restated due to material prior period
error (refer to note 2)
8. EVENTS AFTER THE REPORTING PERIOD
There are no events that have taken place after the reporting
period for which non-disclosure would affect the ability of the
users to make proper evaluations and decisions.
9. APPROVAL OF ANNUAL FINANCIAL STATEMENTS
The annual financial statements were approved by the Board of
directors on 17 May 2017.
10. AUDIT OPINION
These summarised consolidated financial statements for the
Year ended 28 February 2017 have been audited by Deloitte &
Touche, who expressed an unmodified opinion thereon. The
auditor also expressed an unmodified opinion on the full
consolidated financial statements for the year ended
28 February 2017 from which these summarised consolidated
financial statements were derived. A copy of the auditor’s
report on the summarised consolidated financial statements
and the auditor’s report on the full consolidated financial
statements are available for inspection at the company’s
registered office, together with the financial statements
identified in the respective auditor’s reports. Deloitte &
Touche has not audited future financial performance and
expectations expressed by management included in the
commentary in the summarised consolidated financial statements
and accordingly do not express an opinion thereon. The
auditor’s report does not necessarily report on all of the
information contained in the summarised consolidated financial
statements. Shareholders are therefore advised that in order
to obtain a full understanding of the nature of the auditor’s
engagement, they should obtain a copy of the auditor’s report
together with the accompanying financial information from the
issuer’s registered office.
DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a final gross
dividend of 6,25 cents (2016: 5,50 cents) per ordinary share, payable
in cash out of income reserves for the year ended 28 February 2017 to
ordinary shareholders.
In addition to the declaration of the above Cash Dividend, the directors
have approved an alternative for shareholders to elect to receive a
Scrip Distribution Alternative. Full details of the Cash Dividend and
Scrip Distribution Alternative, including the timetable, confirmation
of the issue price and ratio of entitlement, will be disclosed via a
separate detailed SENS to be released immediately following this SENS.
By order of the Board
J Lupton
Company Secretary
17 May 2017
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
ESC Garner (Chairman)
AD Dixon
WA Lombard
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
Deloitte & Touche
PO Box 243, Durban, 4000
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 31 374 7000
SANTOVA HEAD OFFICE AND REGISTERED OFFICE
Physical address
Santova House, 88 Mahatma Gandhi Road Durban, 4001
Postal address
PO Box 6148, Durban, 4000
Contact number
+27 31 374 7000
CORPORATE BANKERS
Nedbank Limited
A Specialist Provider of Innovative Global Trade Solutions.
Santova’s diversification 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
17 May 2017
Johannesburg
Sponsor and Corporate Advisor
River Group
Date: 17/05/2017 03:27:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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