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SABLE HOLDINGS LIMITED (REGISTRATION NO. 68/10636/06) (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) PRELIMINARY PROFIT STATEMENT
THE AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 1999 ARE AS FOLLOWS: CONSOLIDATED INCOME STATEMENT
YEAR ENDED YEAR ENDED
30 JUNE 1999 30 JUNE 1998 (AUDITED) (AUDITED)
R000 R000
TURNOVER 25256 30350
OPERATING INCOME 6875 11742
NET INTEREST PAID (4910) (3844)
DEPRECIATION (1993) (1439) (LOSS)/INCOME BEFORE TAXATION
AND EXCEPTIONAL ITEMS (28) 6459
EXCEPTIONAL ITEMS - (43145)
NET (LOSS) BEFORE TAXATION (28) (36686)
TAXATION (182) (4758)
- CURRENT 182 207
- SECONDARY TAX ON COMPANIES - 4551
NET (LOSS) AFTER TAXATION (210) (41444) (LOSS) FROM ASSOCIATED
COMPANIES (1625) (877) SHARE OF RECURRING NET LOSSES
NET (LOSS) FOR THE YEAR (1835) (42321) WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES IN ISSUE (000) 8687 8403
(LOSS) PER SHARE (CENTS) (21.1) (503,6) HEADLINE (LOSS)/EARNINGS PER SHARE
(CENTS) (21.1) 9,8
DIVIDENDS PER SHARE (CENTS) - 425,0 SUPPLEMENTARY INFORMATION 1. EXCEPTIONAL ITEMS (R000) COMPANY LOSSES ON DISPOSAL OF INVESTMENTS
IN ASSOCIATED COMPANIES - (45300) PROFIT ON DISPOSAL OF OTHER
INVESTMENTS - 2155
- (43145) 2. HEADLINE (LOSS)/EARNINGS PER SHARE (R000)
NET (LOSS) FOR THE YEAR (1835) (42321)
ADD: EXCEPTIONAL ITEMS 43145
(1835) 824 CONSOLIDATED BALANCE SHEET
YEAR ENDED YEAR ENDED
30 JUNE 1999 30 JUNE 1998 (AUDITED) (AUDITED)
R000 R000 CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 62992 64526 LONG-TERM LIABILITIES - INTEREST-
EARING 10080 127
73072 64653 EMPLOYMENT OF CAPITAL
FIXED ASSETS 46478 36205
INVESTMENTS 17172 24992
ASSOCIATED COMPANIES 8688 8336
72338 69533
OTHER NET CURRENT ASSETS 3943 (857) SHORT-TERM LIABILITIES - INTEREST-
BEARING (3209) (4023)
73072 64653 INTEREST-BEARING DEBT TO TOTAL
SHAREHOLDERS' FUNDS (%) 21.1 6,43
NET ASSET VALUE PER SHARE (CENTS) 719 753 NUMBER OF ORDINARY SHARES IN ISSUE
(000) 8767 8567 UNLISTED INVESTMENTS IN ASSOCIATED COMPANIES AT DIRECTORS' VALUATION
(R000) 8688 8336 COMMENTS RESULTS
IN THE INTERIM PROFIT STATEMENT, THE BOARD ANTICIPATED THAT SABLE WOULD RECOUP A PORTION OF THE LOSSES REPORTED THROUGH IMPROVED FINANCIAL MARKETS AND POSITIVE SENTIMENT WITHIN SABLE'S ASSOCIATE COMPANIES. THE SABLE GROUP REPORTED A R5.937 MILLION LOSS AT 31 DECEMBER 1998; HOWEVER RECOVERED R4.1 MILLION DURING THE SECOND HALF OF THE YEAR TO REFLECT A HEADLINE LOSS OF R1.835 MILLION (1998 - HEADLINE EARNINGS OF R824 000) AND A HEADLINE LOSS OF 21.1 CENTS PER SHARE (1998 - HEADLINE EARNINGS OF 9.8 CENTS) FOR THE YEAR ENDED 30 JUNE 1999.
TURNOVER OF R25.26 MILLION (1998 - R30.35 MILLION) WAS LOWER AS A RESULT OF REDUCED ACTIVITY IN SABLE'S PROPERTY TRADING DIVISION.
OPERATING INCOME HAS DECREASED FROM R11.7 MILLION TO R6.9 MILLION MAINLY DUE TO NEGATIVE GROWTH FROM OUR EQUITY-BASED INVESTMENTS AND POOR RESULTS FROM THE PROTEA GARDENS HOTEL. THE FINANCING OF A R20 MILLION INVESTMENT BOND AND A RESIDENTIAL PROPERTY COMPLEX RESULTED IN NET INTEREST PAID INCREASING BY R1.066 MILLION. THE DEPRECIATION CHARGE INCREASED BY 39% DUE TO IMPROVEMENTS TO INVESTMENT BUILDINGS TOTALLING R1.8 MILLION BEING MADE. PROPERTY
INVESTMENT AND TRADING PROPERTY RENTAL INCOME INCREASED FROM R9.68 MILLION TO R10.7 MILLION. INCLUDED IN GROSS RENTALS
IS INCOME OF R764 000 IN RESPECT OF A NEW RESIDENTIAL PROPERTY COMPLEX SITUATED IN THE BRYANSTON AREA WHICH WAS
PURCHASED DURING JANUARY 1999 FOR R10 MILLION AGAINST SIMILAR LONG TERM BORROWINGS. THE PROPERTY IS TO BE PACKAGED WITH
SEVERAL OTHER PROPERTY COMPLEXES WHICH SABLE OWNS AND ACTIVELY MARKETED THROUGH ONE OF SABLE'S ASSOCIATE COMPANIES.
SEVERAL UNITS IN SABLE'S PROPERTY TRADING DIVISION AS WELL AS FACTORY UNITS IN KEW WERE SOLD DURING THE YEAR.
THE PROTEA GARDENS HOTEL REFLECTED A LOSS OF R1.435 MILLION FOR THE YEAR; HOWEVER THIS WAS MADE UP OF
DEPRECIATION AMOUNTING TO R993 000 AND A BAD DEBT OF R453 000.
THE INVESTMENT BUILDINGS HAVE SEEN EXCELLENT OCCUPANCIES WITH IMPROVEMENTS TO TWO OF SABLE'S FLAGSHIP BUILDINGS IN BRAAMFONTEIN ATTRACTING A STRONG POOL OF TENANTS. SABLE'S CURRENT HEAD OFFICE IN MORNINGSIDE, SANDTON HAS BEEN FULLY LEASED OUT TO A BLUE-CHIP TENANT WITH FULL EFFECT FROM 1 DECEMBER 1999. SABLE WILL POSITION ITSELF AT ITS NEW HEAD OFFICE ON A SITE AT THE BRYANSTON COUNTRY CLUB WHICH IS CURRENTLY BEING DEVELOPED. INVESTMENTS
SABLE DISPOSED OF ITS LIBERTY LIFE INVESTMENT BOND FOR AN AMOUNT OF R5.5 MILLION. THE PROCEEDS WERE UTILISED TO SETTLE A
SECONDARY TAX ON COMPANIES' TAXATION CHARGE ARISING FROM A CASH DIVIDEND PAYOUT MADE IN THE 1998 FINANCIAL YEAR.
A R20 MILLION INVESTMENT BOND WAS PURCHASED FROM OLD MUTUAL DURING SEPTEMBER 1998 AND REALISED FOR CASH IN FEBRUARY 1999. EXCEPTIONAL NET RETURNS WERE GENERATED FROM THE TRANSACTION AS WELL AS THE OPPORTUNITY TO ACQUIRE FREE SHARES FROM THE OLD MUTUAL DEMUTUALISATION. THESE SHARES WERE SOLD IN THE NEW FINANCIAL YEAR FOR A VALUE OF R3.6 MILLION.
THE PRIMARY EQUITY INVESTMENT WITH SANLAM REFLECTED A YEAR END VALUE OF R15.84 MILLION AS COMPARED TO A 1998 VALUE OF R19.53 MILLION. THE BOARD HAS
RESTRUCTURED AND DIVERSIFIED SABLE'S TREASURY DIVISION BY APPOINTING AN ALTERNATIVE ASSET MANAGEMENT COMPANY TO ADVISE AND INVEST A PORTION OF SABLE'S TREASURY INVESTMENTS. ASSOCIATED COMPANIES
THE LOSS ARISING FROM SABLE'S INTEREST IN COMMERCIAL PROPERTY TRADING COMPANIES WAS R1.625 MILLION MAINLY THROUGH HIGH FINANCING COSTS ON SEMI-COMPLETED PROJECTS AS WELL AS LACK LUSTRE DEMAND FOR PROPERTY DURING MOST OF THE FINANCIAL YEAR. SIGNIFICANT IMPROVEMENT IN MARKET CONDITIONS IN THE EARLY PART OF THE 1999/2000 FINANCIAL YEAR HAS BEEN EXPERIENCED WITH EXISTING DEVELOPMENTS SEEING RENEWED INTEREST FROM INVESTORS. SEVERAL PROJECTS ARE TO BE COMPLETED IN THE NEAR FUTURE WHICH SHOULD SEE SABLE'S ASSOCIATE CONTRIBUTIONS ADDING TO OVERALL PROFITABILITY IN THE FORTHCOMING YEAR. FINANCIAL
SABLE HAS KEPT ITS LONG-TERM BORROWINGS TO A MINIMUM DURING THE PAST FINANCIAL YEAR, THEREBY AVOIDING HIGH INTEREST COSTS.
WHERE INVESTMENTS HAVE BEEN MADE IN PROPERTY OR TREASURY RELATED PRODUCTS, THE UNDERLYING PRINCIPLES TO OUTPERFORM THE COST OF CAPITAL IN RESPECT OF PROPERTY AND TO INVEST IN RELATIVELY SHORT-TERM TREASURY PRODUCTS HAVE BEEN ADHERED TO. PROSPECTS
THE BOARD ANTICIPATES A RETURN TO PROFITABILITY AND THE PAYMENT OF A FINAL DIVIDEND DURING THE FORTHCOMING YEAR, ASSUMING
THAT THE ECONOMY REMAINS STABLE. SABLE EXPECTS TO GROW ITS CORE ACTIVITIES AND LOOK TO SELL NON-CORE ASSETS AS PART OF STREAMLINING ITS INFRASTRUCTURE. YEAR 2000 COMPLIANCE
UNDER THE GUIDANCE OF SENIOR MANAGEMENT AND IN CONJUNCTION WITH A CONTRACTED IT YEAR 2000 COMPLIANCE TEAM, A STRATEGY TO ENSURE YEAR 2000 COMPLIANCY THROUGHOUT THE GROUP HAS BEEN IMPLEMENTED. PROJECT COSTS OF R100,000 ARE EXPECTED TO BE INCURRED IN UPGRADING SOFTWARE AND HARDWARE. CURRENT PROGRESS IS WELL ADVANCED AND COMPLIANCE BY OCTOBER 1999 WILL BE ACHIEVED.
YOUR DIRECTORS DO NOT EXPECT ANY MATERIAL OPERATIONAL OR OTHER DIFFICULTIES, ANY ADVERSE EFFECT ON THE GROUP EARNINGS OR LEGAL LIABILITY DUE TO YEAR 2000 RELATED ISSUES.
ALTHOUGH IT IS ANTICIPATED THAT ALL SIGNIFICANT AGENTS AND BUSINESS PARTNERS WILL BE YEAR 2000 COMPLIANT, CONTINGENCY PLANS HAVE BEEN PUT IN PLACE. FOR AND ON BEHALF OF THE BOARD J NASH (CHAIRMAN) P H NASH (MANAGING DIRECTOR) 21-SEPTEMBER 1999 REGISTERED OFFICE TRANSFER SECRETARIES
SABLE PLACE MERCANTILE REGISTRARS LIMITED 1A STAN ROAD, 11 DIAGONAL STREET MORNINGSIDE EXT 2057 JOHANNESBURG 2001
