Our opinion on the current state of SANTOVA(SNV)

Santova (SNV) is an international logistics company with a presence across seven countries. The firm specializes in designing and managing global supply chain activities using a client-centric information system. This technology provides enhanced inventory management and more than just tracking and tracing services. Santova has offices in Southeast Asia (Thailand, Vietnam, and Malaysia), Europe (Germany, the Netherlands, and the UK), major South African cities, Mauritius, and Sydney, Australia.

In its financial results for the six months ending August 31, 2023, Santova reported a 3.3% increase in revenue but a 22.9% decline in headline earnings per share (HEPS). Its tangible net asset value (NAV) saw a 30.8% increase to 546.5 cents per share. The company highlighted a significant drop in freight rates during the past six months due to easing congestion and a slowdown in global economic growth. The Drewry World Container Index, a benchmark for shipping rates, fell from about $9,700 per 40-foot container in January 2022 to $1,400 in September 2023, now below pre-pandemic 2019 levels.

In a trading statement for the fiscal year ending February 29, 2024, the company predicted that HEPS would decrease by 18.6% to 23.6%. This forecast factored in a one-time gain of R18.3 million due to fair valuation adjustments.

Technically, Santova has been in a steady upward trend since May 2020, although recent price movements suggest the trend may be topping out. After reaching 980 cents between May and August 2023, the share price fell to 735 cents. Despite this dip, the share remains well-traded and could benefit from an improvement in the South African and UK economies.