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SBV/SVN - Sabvest - Unaudited interim results for the six months ended 30 June
2010 and cash dividend declaration
SABVEST LIMITED
("Sabvest" or "the group")
Registration number 1987/003753/06
ISIN: ZAE000006417 - ordinary shares
ISIN: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010 AND CASH
DIVIDEND DECLARATION
Consolidated Condensed STATEMENT OF FINANCIAL POSITION
at 30 June 2010
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2010 2009 2009
R`000 R`000 R`000
Non-current assets 408 169 353 033 365 442
Property, plant and equipment 905 1 216 1 070
Deferred tax asset 740 1 388 1 249
Share trust receivables 4 040 6 423 6 126
Investment holdings 402 484 344 006 356 997
Associates* 312 730 288 391 292 994
Long-term investments 89 754 55 615 64 003
Current assets 32 339 11 537 31 205
Finance advances and receivables 30 392 11 462 24 672
Short-term investments 1 850 - -
Cash balances 97 75 6 533
Total assets 440 508 364 570 396 647
Ordinary shareholders` equity 389 599 336 489 379 071
Non-current liabilities 40 488 2 531 5 212
Interest-bearing debt 35 000 - -
Deferred tax liability 5 488 2 531 5 212
Current liabilities 10 421 25 550 12 364
Interest-bearing debt 5 250 21 960 7 350
Accounts payable 5 171 3 590 5 014
Total equity and liabilities 440 508 364 570 396 647
Net asset value per share - cents 850 727 825
Net tangible asset value
per share - cents 843 720 817
Net asset value per share with
listed investments in associates
at market value - cents 850 749 863
Net asset value per share with
investments in associates at
directors` valuation
(intrinsic value) - cents** 1 124 1 010 1 094
Number of shares in issue less
held in share trust/
treasury - 000`s 45 820 46 276 45 968
* Includes goodwill of R3,4 million (30 June 2009: R3,4 million).
** Valuations are the prior year-end valuations for unlisted shares adjusted for
current accrued income, and for listed shares adjusted for current market
prices.
Consolidated Condensed STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2010
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June June 31 Dec
2010 2009 2009
R`000 R`000 R`000
Gross income from operations and
investments 31 170 19 550 78 938
Dividends received 181 6 961 34 939
Interest received 1 339 797 1 567
Income on financial instruments
and shares 93 2 022 9 976
Fees and sundry income 2 160 860 2 809
Fair value adjustment to
investments 2 301 (10 476) 8 274
Equity accounted retained income
of associates 25 096 19 386 21 373
Share of net income of
associates 25 096 25 087 53 936
Less: Dividends received - (5 701) (32 563)
Impairments (82) (84) (181)
Interest paid 1 514 1 834 3 467
Net income before expenses and
exceptional items 29 738 17 800 75 652
Less: Expenditure 9 230 7 836 18 538
Operating costs 9 067 7 665 18 208
Depreciation 163 171 330
Exceptional items - (gains)/losses (76) 1 028 (9 344)
Net income before taxation 20 584 8 936 66 458
Taxation - deferred 786 (446) 2 374
Net income for the period
attributable to equity
shareholders 19 798 9 382 64 084
Translation of foreign
subsidiary/associates (385) (833) (1 536)
Total comprehensive income
attributable to equity
shareholders 19 413 8 549 62 548
Earnings per share - cents 43,2 20,3 139,1
Dividends per share (proposed after
interim/year-end) - cents 4,0 3,0 14,0
Weighted average number of shares
in issue - 000`s 45 864 46 257 46 078
Headline earnings per share
- cents*1 42,7 22,5 118,8
Reconciliation of headline earnings
Net income for the period 19 798 9 382 64 084
Exceptional gains - group - - (14 153)
Exceptional losses - associates - 828 4 628
(Gains)/losses/costs arising from
former finance operations (76) 200 181
Profit on sale of property, plant
and equipment (155) - -
Headline earnings for the period 19 567 10 410 54 740
*1 There are no diluting instruments.
Consolidated Condensed STATEMENT OF CASH FLOWS
for the six months ended 30 June 2010
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June June 31 Dec
2010 2009 2009
R`000 R`000 R`000
Cash (utilised in)/generated by
operating activities (6 645) (2 678) 17 632
Cash generated by investing
activities 7 764 9 887 11 333
Cash effects of financing
activities (365) - 701
Cash utilised for the payment
of dividends (5 090) (5 090) (6 479)
Change in cash and cash
equivalents (4 336) 2 119 23 187
Cash balances, less
interest-bearing debt,
at beginning of period (817) (24 004) (24 004)
Cash balances, less
interest-bearing debt,
at end of period (5 153) (21 885) (817)
Consolidated STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2010
Non-
distri- Accu-
Share Share butable mulated
capital premium reserve profit Total
R`000 R`000 R`000 R`000 R`000
Balance as at
1 January 2009 862 50 033 253 060 46 681 350 636
Total comprehensive
income for the
period - - - 64 084 64 084
Accumulated loss in
share trust - - (1 452) - (1 452)
Translation of foreign
subsidiary/associates - - (1 536) - (1 536)
Share-based payment
charge - - 480 - 480
Attributable income of
associates - - 16 745 (16 745) -
Movement in translation
and other reserves of
associates - - (25 508) - (25 508)
Shares held in share
trust - written back 5 696 - - 701
Shares held in share
trust - (1 855) - - (1 855)
Dividends paid - - - (6 479) (6 479)
Balance as at
31 December 2009 867 48 874 241 789 87 541 379 071
Total comprehensive
income for the
period - - - 19 798 19 798
Accumulated loss in
share trust -
written back - - 1 452 - 1 452
Accumulated loss in
share trust - - (207) - (207)
Translation of foreign
subsidiary/associates - - (385) - (385)
Share-based payment
charge - - 255 - 255
Attributable income of
associates - - 25 096 (25 096) -
Movement in translation
and other reserves
of associates - - (4 436) - (4 436)
Shares held in treasury (3) (362) - - (365)
Shares held in share
trust - written back - 1 855 - - 1 855
Shares held in share
trust - (2 349) - - (2 349)
Dividends paid - - - (5 090) (5 090)
Balance as at
30 June 2010 864 48 018 263 564 77 153 389 599
Contingent liabilities
The group`s contingent liabilities at 30 June 2010 are as follows:
1. The group has rights and obligations in terms of shareholder
or purchase and sale agreements relating to present or
former investments.
2. A group company has entered into lease agreements for the
premises that it occupies. The amounts due are as follows:
Year 1 R1,1 million
Year 2 R1,2 million
Investment commitments
Authorised: R18 million.
Investment Portfolio
at 30 June 2010
Voting
Listed/ Number of interest
Unlisted shares %
Investments in associates
Flowmax Holdings
Limited (BVI/UK) U 40,0
Ridge Empowerment Capital
(Pty) Limited U 45,0
SA Bias Industries
(Pty) Limited U 48,5
Set Point Group Limited U 49,8
Sunspray Food Ingredients
(Pty) Limited U 47,1
Total associates
Long-term investments
Listed
Brait SA L 500 000
Datatec Limited L 1 000 000
Metrofile Holdings Limited L 20 000 000
Unlisted
Korbitec Holdings
(Pty) Limited U 8,5
Korbicom (Pty) Limited U 17,0
Primedia Holdings 1 Limited U JJPIK loans -
Transaction Capital
(Pty) Limited U 1 000 000 -
Total long-term investments
Short-term investments L
Total investment portfolio
Economic Carrying Directors`
interest value value
% R`000 R`000
Investments in associates
Flowmax Holdings
Limited (BVI/UK) 40,0
Ridge Empowerment Capital
(Pty) Limited 45,0
SA Bias Industries
(Pty) Limited 57,3
Set Point Group Limited 49,8
Sunspray Food Ingredients
(Pty) Limited 47,1
Total associates 312 730 482 622
Long-term investments
Listed 68 965 68 965
Brait SA
Datatec Limited
Metrofile Holdings Limited
Unlisted 20 789 20 789
Korbitec Holdings
(Pty) Limited 8,5
Korbicom (Pty) Limited 17,0
Primedia Holdings 1
Limited
Transaction Capital
(Pty) Limited
Total long-term investments 89 754 89 754
Short-term investments 1 850 1 850
Total investment portfolio 404 334 574 226
COMMENTARY
Profile
Sabvest is an investment and finance group which has been listed since 1988. Its
ordinary and "N" ordinary shares are quoted in the Financials - Equity
Instruments sector of the JSE Limited.
Sabvest has significant or joint controlling interests in five groups, which are
accounted for as associates, and a long-term portfolio of seven other
investments which are accounted for on a fair value basis.
In addition, Sabvest maintains finance advances and debt instrument portfolios
and undertakes other fee and profit earning activities.
Financial Results
Sabvest`s results for the six-month period were ahead of expectations despite
negative JSE share price movements in the month of June which affected the
accrual for fair value adjustments. The group`s associates performed in line
with expectations. In particular Sunspray Food Ingredients and the offshore
operations of SA Bias Industries performed strongly.
Headline earnings per share increased by 91% to 43 cents per
share and the interim dividend has been increased by 33% to 4 cents per share.
Shareholders` funds with investments at intrinsic value (net of notional CGT)
increased to R514m.
Intrinsic value per share increased to 1 124 cents.
A three year loan of R35m has been raised to facilitate the group`s investment
program.
With regard to dividends received for the interim period, certain dividends that
are usually accounted for in the first half will only be accounted for in the
second half and normal dividends for the year as a whole are expected to be in
line with budgets.
With regard to finance advances, the increase is a result of R15m lent to an
associate repayable on 30 days` notice.
Changes in Investment Holdings
During the period, Sabvest:
- Promoted a process which has led to the delisting of Set Point
Group Limited and which has resulted in Sabvest`s holding in
Set Point increasing from 31% to 49%. All of the guarantees and
loan funding provided by Sabvest for this process have been
released or refinanced without recourse to Sabvest.
- Acquired a new investment of 1m shares in Transaction Capital
(Pty) Limited - a specialised financial group.
- Increased the investment in Datatec Limited to 1m shares.
- Increased the investment in Korbitec Holdings (Pty) Limited, a
subsidiary of Naspers, to 8,5%.
- Acquired 0,5m shares in Brait SA - a listed private equity and
public markets group.
With regard to the group`s associates:
- Flowmax UK Limited expanded the spread of its five industrial
distribution businesses in the UK through the acquisition of
Anglo Nordic Burners Limited;
- SA Bias Industries disposed of its Hanger Pro operating unit in
RSA.
- Nimble Group, in which Ridge Empowerment Capital is invested,
acquired Norman Bisset & Associates.
Dividend Policy
Dividends are determined relative to Sabvest`s own expected recurring cash flows
and relative to receipts from investments that are not earmarked for new
projects.
It is the group`s policy to consider dividends twice annually. The dividends for
the interim period have been increased to 4 cents per share.
Related Parties
Related party transactions exist between subsidiaries and the holding company,
fellow subsidiaries and associated companies, and comprise fees, dividends and
interest.
Transactions with directors relate to fees and monies lent to the group by
individuals and companies controlled by the directors.
Accounting Policies
The unaudited condensed interim financial statements have been prepared in terms
of International Financial Reporting Standards (IFRS) and comply with IAS 34 -
Interim Financial Reporting, the JSE Limited Listings Requirements and the
Companies Act of South Africa. The accounting policies used are consistent with
those applied to the audited financial statements for the year ended 31 December
2009, except for the Adoption of Annual Improvements to IFRSs.
Prospects
The businesses operated by the group`s associates and by the group`s investee
companies all have sound medium term growth prospects and are well managed.
However, there may be a delay in the positive effects of economic recovery being
felt by some of the South African businesses in which we are invested. In
addition high volatility in stock market prices makes fair value adjustments
unpredictable at this time.
Notwithstanding, we anticipate an increase in headline earnings per share,
dividends per share and intrinsic value per share for the year as a whole but
not at the same rate of growth as in the first half. This projection has not
been reviewed or reported on by the group`s auditors.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman Chief Executive CFO
29 July 2010
Sandton
Cash dividend declaration
Notice is hereby given that a dividend of 4 cents (2009: 3 cents) per ordinary
share and "N" ordinary share for the six months ended 30 June 2010 has been
declared payable to shareholders in accordance with the undermentioned
timetable:
Last date to trade "CUM" dividend Friday, 13 August 2010
Trading "EX" dividend commences Monday, 16 August 2010
Record date Friday, 20 August 2010
Dividend payment date Monday, 23 August 2010
No dematerialisation or rematerialisation of share certificates will be allowed
during the period Monday, 16 August 2010 to Friday, 20 August 2010, both days
inclusive.
Registered address: 4 Commerce Square, 39 Rivonia Road, Sandhurst, Sandton 2196
Communications: Postal address: PO Box 78677, Sandton 2146, Republic of South
Africa
Communications: Telephone: (011) 268 2400
Fax: (011) 268 2422
e-mail: ho@sabvest.com
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Marshalltown 2001.
(PO Box 61051, Marshalltown 2107)
Directors: H Habib# (Chairman), P Coutts-Trotter (Deputy Chairman), CS
Seabrooke* (Chief Executive), CP Coutts-Trotter*, NSH Hughes#, DNM Mokhobo#, GE
Nel, R Pleaner*, BJT Shongwe# *Executive
#Independent
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
www.sabvest.com
Date: 29/07/2010 14:40:31 Supplied by www.sharenet.co.za
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