In the corresponding period last year, Santova - ranked as one of the best performing small cap companies on the JSE during the past five years - earned 38% of its operating profit from outside SA.
CEO Glen Gerber said the company's performance in certain international markets had enhanced overall profitability. The regions that performed particularly well for Santova in the interim period were the Netherlands (profits up 65% to R6.9m) and Australia (profits up almost threefold to R2.2m.
The company reported normalised earnings per share up 48% to 15.6c per share. Revenue rose 8% to R126m off total billings of R1.69bn. Its overall billing margin improved to 7.5% (previously 7.1%), while the operating margin was considerably fatter at 26.9% (23.6%).
Adrian Saville, chief strategist at Citadel, said Santova had managed to build "real" operational diversification. "They are operating from Hong Kong to Ghana, and have been successful in finding opportunities at the right price."
Dr Saville argued that size was proving an advantage for Santova in a sluggish global economy. "That the company was able to sustain growth at a fair clip tells you they are winning market share."
Santova's cash flow was strong and the company appeared to be moving into areas less regulated than SA - "which would require a much lighter balance sheet", he said. Santova reported net cash generated from operating activities had increased to R24.6m.
Gerber said the company continued to accumulate surplus cash reserves, mainly in its offshore operations where (unlike SA) there were no legislative requirements to fund recoverable logistics payments on behalf of clients.
Santova's cash pile grew 72% to R62m in the interim period.
Source: Business Day
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