Wrap Text
Trading statement for the six months ended 30 June 2020
SABVEST CAPITAL LIMITED
(Incorporated in South Africa)
(Registration number 2020/030059/06)
JSE share code: SBP
ZAE000283511
("Sabcap" or "the Company" or "the Group")
TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2020
In terms of the Listings Requirements of the JSE Limited, companies are required to publish a
trading statement as soon as they are satisfied that a reasonable degree of certainty exists that
the financial results for the period to be reported on next will differ by 20% or more from the
financial results of the previous corresponding reporting period.
Shareholders are advised that, for the interim period ended 30 June 2020, Sabcap expects:
- A reduction in HEPS/EPS of at least 100%, from 125,7c HEPS/EPS for the six months
ended 30 June 2019 (as reported by Sabvest Limited, which is now wholly-owned by
Sabcap pursuant to the Sabvest Limited scheme of arrangement effective 18 May 2020
and the separate listing of Sabcap on 13 May 2020), to a loss of at least 651c per share.
- A reduction in DPS of at least 72%, from 36c DPS for the six months ended 30 June
2019 (as reported by Sabvest Limited), to approximately 10c per share.
- A reduction in NAV per share (NPS) of at least 10%, from 6689c at 31 December 2019
(as reported by Sabvest Limited) to approximately 6038c per share.
The COVID-19 pandemic in the first half of 2020 has affected most operations of the Group’s
investee companies worldwide and, in particular, in RSA up to and from the national lockdown
commencing on 27 March 2020.
The Group’s listed investments are valued at market prices, as quoted on the relevant securities
exchanges, on reporting or calculation dates. For example, the value of the Group’s long-term
listed investments reduced by an average of 26,5% from the 31 December 2019 reporting date
to the start of the national lockdown on 27 March 2020.
The Group’s unlisted investments are valued for IFRS reporting purposes using the
maintainable earnings model based on historic normalised EBITDA, adjusted for future
prospects, and to which appropriate earnings multiples are applied. Each resulting calculation is
then adjusted for net cash/debt/equivalents to determine net EV. Its two investment company
holdings are valued at their NAVs which, in turn, are calculated in a similar way to Sabcap’s
other investments using the maintainable earnings model or DCFs. Most of the investee
valuations were negatively affected in and from March 2020 due to lockdowns, which caused
material reductions in revenues in most of the operations of our investees, lower current and
projected normalised earnings, lower earnings multiples and higher debt to fund losses and
antiCOVID programs. The reduction in valuations was cushioned to an extent by the translation
of foreign holdings at a weaker rand exchange rate than at 31 December 2019 and the reversal
of some deferred CGT provisions.
In addition, it should be noted that most investee companies have cancelled dividend and
interest payments to Sabcap for the time being in order to conserve liquidity for their operations.
Although this has resulted in negative operating cash flows and earnings for Sabcap itself (and
a concomitant reduction in NAV), the Group has sufficient facilities and resources available to
fund its commitments. In addition, Sabcap has eliminated most variable overheads and expects
to propose a reduction or waiver of its 2020 interim dividend. However, the 2019 final dividend
was paid as declared.
Notwithstanding the above comments, the board is of the view that the Sabcap portfolio is of
high quality, has sufficient resilience to recover values and resume growth when economies
rebound and should revert to being cash generative as previously. In addition, Sabcap’s
partnership model has worked exceptionally well in these difficult times, with its partners in each
investee shouldering disproportionate amounts of the burden.
Sabcap intends to release its interim results in September 2020, but will issue an updated
trading statement before then.
The forecast financial information on which this trading statement is based has not been
reviewed or reported on by the Company’s external auditors.
Sandhurst
29 June 2020
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 29-06-2020 07:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
