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SBL - Sable - Reviewed Group Results For The Year Ended 30 June 2008
SABLE HOLDINGS LIMITED
(`Sable`)
(Registration No. 1968/010636/06)
(Incorporated in the Republic of South Africa)
Share code: SBL & ISIN: ZAE000006383
REVIEWED GROUP RESULTS for the year ended 30 June 2008
Condensed consolidated income statement
Year ended Year ended Year ended
30 June 2008 30 June 2007 30 June 2007
(Reviewed) (Restated) (Audited)
R`000 R`000 R`000
Revenue 29,596 27,812 52,260
Operating profit before
non-trading items 23,971 16,440 25,372
Profit on disposal of
investments 845 685 685
Impairments (3,180) (17,051) (17,550)
Fair value gains on investment
property 6,695 95,827 129,386
Operating profit 28,331 95,901 137,893
Finance income 1,584 451 4,135
Finance costs (20,284) (9,436) (16,811)
Share of profits from associates
and joint ventures 14,108 63,174 34,866
Profit before taxation 23,739 150,090 160,083
Taxation 3,986 (28,946) (38,939)
Net profit for the year 27,725 121,144 121,144
Attributable to equity shareholders of the holding company:
Equity holders of the holding
company 27,751 121,144 121,144
Minority interest (26) - -
27,725 121,144 121,144
Number of ordinary shares
Shares in issue (`000) 8,170 8,170 8,170
Less: Treasury shares (`000) (792) (792) (792)
Weighted average number of
ordinary shares in issue
(`000) 7,378 7,378 7,378
Earnings per ordinary share
(cents) 376.1 1,642.0 1,642.0
Headline earnings per ordinary
share (cents) 219.4 293.6 293.6
Dividend per ordinary share
(cents) - 50.0 50.0
Reconciliation of headline earnings
Net profit attributable to
equity shareholders of the
holding company 27,751 121,144 121,144
Adjusted for:
Straight-line rental income
accrual - - (1,507)
Net impairment of investments:
Subsidiaries 3,180 17,051 17,550
Associates (1,937) - -
Revaluation of investment property:
Subsidiaries (4,820) (68,037) (91,864)
Associates (2,151) (48,498) (23,663)
SIC 21 Income Taxes:
Recovery of revalued
non-depreciable assets (5,833) - -
Headline earnings for the year 16,190 21,660 21,660
Condensed consolidated balance sheet
At At At
30 June 2008 30 June 2007 30 June 2007
(Reviewed) (Restated) (Audited)
R`000 R`000 R`000
Assets
Non-current assets 531,574 479,847 596,905
Investment property 324,678 286,492 467,527
Investments 200,330 188,280 126,548
Other non-current assets 6,566 5,075 2,830
Current assets 9,969 16,869 42,472
Cash and cash equivalents 478 7,763 10,192
Other current assets 9,491 9,106 32,280
Total assets 541,543 496,716 639,377
Equity and liabilities
Total equity attributable to
equity holders 319,948 295,623 295,623
Shareholders` equity 320,010 295,623 295,623
Minority interest (62) - -
Total liabilities 221,595 201,093 343,754
Non-current liabilities 164,673 133,202 285,728
Interest-bearing borrowings 130,396 96,020 225,696
Other non-current liabilities 34,277 37,182 60,032
Current liabilities 56,922 67,891 58,026
Bank overdrafts - 2,232 -
Loans on demand 44,509 51,611 40,095
Other current liabilities 12,413 14,048 17,931
Total equity and liabilities 541,543 496,716 639,377
Net asset value per ordinary
share (cents) 4,337 4,007 4,007
Interest-bearing borrowings
to total equity (%) 55.8 52.9 92.2
Interest-bearing borrowings
to total assets (%) 33.0 31.5 42.6
Condensed consolidated cash flow statement
Year ended Year ended Year ended
30 June 2008 30 June 2007 30 June 2007
(Reviewed) (Restated) (Audited)
R`000 R`000 R`000
Cash inflow/(outflow) from
operating activities 4,529 (1,498) (6,449)
Cash generated from operations 27,794 12,232 11,070
Finance costs (20,284) (9,436) (16,811)
Finance income 1,584 451 4,135
Dividend paid (3,680) (3,680) (3,680)
Taxation paid (885) (1,065) (1,163)
Cash outflow from investing
activities (36,643) (56,969) (148,417)
Cash inflow from financing
activities 34,163 13,338 128,878
Net increase/(decrease) in
cash and cash equivalents 2,049 (45,129) (25,988)
Cash and cash equivalents at
the beginning of the year (46,080) (951) (3,915)
Cash and cash equivalents
at the end of the year (44,031) (46,080) (29,903)
Cash and cash equivalent at the end of the year consist of:
Cash and cash equivalents 478 7,763 10,192
Bank overdrafts - (2,232) -
Loans on demand (44,509) (51,611) (40,095)
(44,031) (46,080) (29,903)
Condensed consolidated statement of changes in equity
Year ended Year ended Year ended
30 June 2008 30 June 2007 30 June 2007
(Reviewed) (Restated) (Audited)
R`000 R`000 R`000
Balance at beginning
of the year 295,623 180,136 180,136
Net profit for the year 27,751 121,144 121,144
Repurchase of issued share
capital - (1,967) (1,967)
Movement in other reserves 264 - -
Dividend paid (3,690) (3,690) (3,690)
Balance at end of the year 319,948 295,623 295,623
Condensed consolidated segmental report
Year ended Year ended Year ended
30 June 2008 30 June 2007 30 June 2007
(Reviewed) (Restated) (Audited)
R`000 R`000 R`000
Segment revenue 29,596 27,812 52,260
Investment property 30,159 27,466 34,387
Trading property 53 - 17,635
Treasury and other (616) 346 238
Segment result (operating profit
before non-trading items) 23,971 16,440 25,372
Investment property 19,473 13,650 20,742
Trading property (54) - 2,518
Treasury and other 4,552 2,790 2,112
Commentary
Basis of preparation and accounting policies
The condensed consolidated financial results have been prepared in accordance
with International Financial Reporting Standards ("IFRS"), IAS 34 Interim
Financial Reporting, the South African Companies Act of 1973, as amended, and
the JSE Listings Requirements. The principal accounting policies used in the
preparation of the reviewed results for the year ended 30 June 2008 are
consistent with those used in the prior year other than as set out below:
- The adoption of IFRS 7 Financial Instruments: Disclosures and the
consequential amendments to IAS 1 Presentation of Financial Statements, which
are effective for annual reporting periods beginning on or after 1 January 2007.
Restatement of comparatives was not required as these statements deal with
disclosure requirements.
- The voluntary change in accounting policy with regards to IAS 31 Interest
in Joint Ventures in which interests in jointly controlled entities were
previously proportionately consolidated, are now consolidated using the equity
method. The comparative period has been restated accordingly.
Review opinion
The condensed consolidated results for the year have been reviewed by BDO
Spencer Steward (Johannesburg) Inc. and their review opinion is available for
inspection at the company`s registered office.
Financial results
The effects of the change in accounting policy as described above on the 2007
restated and 2007 audited results are as follows:
30 June 2007 30 June 2007
(Restated) (Audited) Difference
R`000 R`000 R`000
Balance sheet
Assets (excluding investment
in associates and joint
ventures) 351,745 522,714 170,969
Liabilities (201,093) (343,754) (142,661)
Represented by increase in
investments in associates
and joint ventures 150,652 178,960 28,308
Income statement
Profit before taxation and share
of profits from associates and
joint ventures 86,916 125,217 38,301
Taxation (28,946) (38,939) (9,993)
Share of profits from associates
and joint ventures 63,174 34,866 (28,308)
Effect on net profit for the year 121,144 121,144 -
Comparative analysis between 30 June 2008 (reviewed) and 30 June 2007 (restated)
Consolidated income statement
The group reported a net profit of R27.7 million (2007 - R121.1 million) for the
year ended 30 June 2008. Earnings per share decreased by 77.1% from 1,642.0
cents (June 2007) to 376.1 cents, with headline earnings per share decreasing by
25.3% from 293.6 cents (June 2007) to 219.4 cents.
Revenue increased by 6.4% from R27.8 million (June 2007) to R29.6 million.
Operating profit before non-trading items increased from R16.4 million (June
2007) to R24.0 million largely due to property related activities. Fair value
gains on investment property were R6.7 million (2007 - R95.8 million). The gains
reported in 2007 were as a consequence of an independent valuation on the group
investment property portfolio requiring management to reflect a more market
related property portfolio valuation. The current year`s valuation has been
determined taking into account rising interest rates and general economic
uncertainty impacting the property market. Interest paid of R20.3 million (2007
- R9.4 million) reflected the effect of the increase in the group`s cost of
borrowings due to the acquisition of investment property and higher interest
rates.
Share of profits from associates and joint ventures of R14.1 million (2007 -
R63.2 million) reflected the effect of fair value gains reported in respect of
investment property revaluations in 2007 as compared to fair value impairments
and higher interest rates reported in the current year.
The taxation charge has decreased from a R28.9 million charge (June 2007) to a
credit amount of R4.0 million, primarily due to deferred tax on investment
property revaluations being adjusted to provide for 14.0% on the land component
and 28.0% on the building improvement component in line with Circular 1/2006,
IAS 12 Income Taxes and SIC 21 Income Taxes: Recovery of revalued non-
depreciable assets.
Consolidated balance sheet
The net asset value per ordinary share increased from 4,007 cents(June 2007) to
4,337 cents. The ratio of interest-bearing borrowings to total equity increased
from 52.9% to 55.8% and interest-bearing borrowings to total assets increased
from 31.5% to 33.0% during the financial year.
A total of R38.2 million of investment property was acquired during the year. A
multi-tenanted industrial property in Laser Park, Randburg, was purchased for
R23.0 million and the upgrade of an existing retail shopping centre in
Noordheuwel, Krugersdorp accounted for capital expenditure of R8.5 million.
Anchor tenants such as Woolworths and Mega Grocer have been secured and the
centre is expected to open in January 2009. These property investments have been
financed through long-term interest-bearing borrowings as reflected in the
balance sheet.
An investment property held for sale located in Woodmead Office Park,
Johannesburg, was sold subsequent to year end for R4.8 million.
Investments have been reported at R200.3 million (2007 - R188.3 million). These
investments in associates and joint ventures include investment property and
property for development in all diversified sectors of the property market and
have been concluded with various prominent Johannesburg based property partners.
Certain investments pertaining to shares listed on the Johannesburg Stock
Exchange were disposed during the year, realising a profit of R0.7 million. An
impairment of R3.2 million in respect of the market value of the investments was
reported in the current financial year.
Short-term debt has decreased from R60.4 million(June 2007) to R50.9 million at
June 2008. These borrowings have been largely utilised to fund property
investments in associates and joint ventures.
Capital commitments
Capital expenditure of R39.1 million has been authorised and contracted for in
respect of the redevelopment of Noordheuwel shopping centre in Krugersdorp.
Prospects
Although the prevailing property market presents challenges with regard to the
disposal of property developments and the collection of commercial rentals,
Sable management is confident that development prospects within the group are
quality investments and believe that over time significant value will be
realised. Sable`s directors have taken a cautious approach to debt management
and have resolved to reduce shorter term debt during the forthcoming year.
Dividends
The board of directors has resolved not to declare a dividend for the year ended
30 June 2008. All spare cash reserves are to be deployed in reducing short-term
borrowings or funding property opportunities that present themselves.
Going concern
The financial statements have been prepared on the going concern basis as the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future.
Board changes
Messrs IR Kemp and IA Chambers were appointed as non-executive directors on 9
April 2008 and Mr DJ Pennington as a non-executive director on 29 July 2008.
For and behalf of the board
PH Nash (Chairman)
GBJ Bowes (Managing director)
29 September 2008
Board of Directors: PH Nash (chairman), GBJ Bowes (managing director), IR Kemp*,
JA Pelser*, IA Chambers*, DJ Pennington* *(Non-executive director)
Registered office: Sable Place, Fairway Office Park, 52 Grosvenor Road,
Bryanston 2021. PO Box 786390, Sandton 2146.
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107.
Sponsor: Sasfin Capital - a division of Sasfin Bank Limited.
Date: 29/09/2008 17:44:22 Supplied by www.sharenet.co.za
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