Logistics company Santova has opted to hang on to its cash rather than pay a 2020 dividend as Covid-19 batters the global economy and disrupts supply chains.

The group moves a variety of goods for customers in industries such as clothing, technology and food and beverages.

Growth in Santova’s UK and Europe operations helped lift net profit 6.4% to R64.9m in its year to end-February 2020, though the group’s SA operations weighed on its overall performance.

The company said that net profit of its SA operations fell 43.7% to R15.1m in 2020 due to poor economic growth, lower consumer spending and lower levels of business confidence generally.

Santova has opted not to pay a dividend, having paid a dividend of 7.5c per share previously. The group has about 161-million shares in issue.

Independent analyst Anthony Clark said full-year performance at Santova, which had been overlooked and disregarded by the market for quite some time, was commendable. Earnings growth of more than 40c per share showed the resilience of the business model. That cash on hand grew significantly year on year showed that the company was well positioned for the challenging six months ahead, he said.

Earnings per share rose 6.7% to 40.77c per share, while cash and cash equivalents rose R44,6m to R134,4m. Cash generated from operations rose  R85,4m to R133,2m.

Santova’s financial results were completed before the Covid-19 lockdown, and since the end of March the entire world and the global supply chain had basically been stopped, ports had not been working and there had not been international shipping, said Clark.

“I think the next six months are gonna be extremely challenging. That they have significant amounts of cash on their balance sheet is a prudent move for the company ... and so far it has been fairly resilient,” he said.

Santova’s share price gained 7.14% to close at R150, giving the company a market share of R242m.