All at sea
INTERIM RESULTS FROM this small cap company in a week or so might provide potential investors with the first clear view of its operations. Santova’s financials are difficult to pin down: it might well be beyond the company’s control but results, and prior period comparisons, always seemed fudged.
CEO Glen Gerber can’t comment because Santova is in a closed period and, again, under a cautionary announcement. The latter probably relates to a possible acquisition Santova is negotiating. That’s its style, and it’s made a few smallish acquisitions in its previous financial year.
The big acquisition was Impson Logistics in August 2006. The freight forwarding and clearing business has become core to Santova and has driven, as far as can be worked out, pretty decent recent financial results.
The problem is Santova’s results are always being changed and restated. And prior full financial year comparisons are confounded by a previous 14-month reporting period. That’s why upcoming interims might provide the first meaningful comparison – as long as there’s no further restatement of figures.
No doubt Gerber is frustrated at changes to accounting standards, largely under International Financial Reporting Standards (IFRS). But results have also been restated to reflect the “fair values” of businesses being acquired and the valuation of Santova shares used to settle part of acquisition prices.
Also a little worrying is the recent resignation and retirement of directors. Some, such as former chairman Prince Sifiso Zulu, are fully understandable. He’s involved in a police investigation into people killed in an accident allegedly involving his motor vehicle. It’s not quite clear whether Zulu was in the car or
not. But when police arrived to investigate he stabbed himself and jumped out of a window in an apparent suicide attempt.
However, the business community holds other recently departed directors in good standing. That doesn’t look good for Santova. But its share price jumped from 4c to 6c/share when the latest cautionary was released last Friday, so the market seems to like what’s going on.