Small-cap logistics company Santova, whose share price has almost halved so far in 2019, warned on Tuesday that falling shipping volumes as a result of SA’s subdued consumer environment had hit its earnings in the six months to end-August.

Headline earnings per share (HEPS) were expected to fall between 12% and 17% to a range of 17.54c to 18.59c per share, the company said, with SA logistics revenue falling by a similar amount.

The company said its recent acquisitions, SAI Logistics in the UK and ASM Logistics in Singapore, were, however, performing to expectations and would contribute to profits during the period.

Santova, which has a market capitalisation of R274m, acquired SAI in October 2018 for about £3.2m (R56m), with that company focused on air and sea imports, with strong links to India.

Santova acquired ASM Logistics in August 2018, although the company didn't give details on the amount of the acquisition, given that at the time it represented less than 5% of the value of its market capitalisation. Supply chain logistics-focused ASM has operations across Southeast Asia.

Santova had posted a double-digit revenue decline in its year to end-February, and the update was therefore not surprising, said PSG Wealth portfolio manager Ricus Reeders.

“Acquisitions in the UK and Singapore are performing to expectations, but I have doubts that the momentum of ASM can be maintained in the short term, given slow-down in trade volumes in the Far East and specifically Hong Kong,” he said.

Brexit could also make for an uncertain and volatile outlook, which could weigh on the UK’s SAI Logistics, he said.

“In a nutshell, then, earnings have been somewhat bolstered by off-shore [performance], but with a still-negative outlook for Southern African businesses in the short term, and a doubtful outlook in the rest of their global operations, it’s difficult to see an earnings catalyst in the short to medium term,” said Reeders.

Santova’s share price was down 0.59% R1.69 at 11.40am on Tuesday, having lost 45.66% for the year to date.