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SBV/SVN - Sabvest Limited - Condensed audited results for the year ended 31

Release Date: 02/03/2011 12:47
Code(s): SBV
Wrap Text

SBV/SVN - Sabvest Limited - Condensed audited results for the year ended 31 December 2010 and cash dividend declaration SABVEST LIMITED Incorporated in the Republic of South Africa Registration number 1987/003753/06 "Sabvest" or "the group" or "the company" ISIN: ZAE000006417 - ordinary shares ISIN: ZAE 000012043 - "N" ordinary shares Share code: SBV - ordinary shares Share code: SVN - "N" ordinary shares CONDENSED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010 AND CASH DIVIDEND DECLARATION CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION at 31 December 2010 31 Dec 31 Dec 2010 2009
Audited Audited R`000 R`000 Non-current assets 453 800 365 442 Property, plant and equipment 745 1 070 Deferred tax asset 555 1 249 Share trust receivables 3 761 6 126 Investment holdings 448 739 356 997 Associates 329 373 292 994 Long-term investments 119 366 64 003 Current assets 41 686 31 205 Finance advances and receivables 16 532 24 672 Other financial instruments 5 899 - Short-term investments 16 021 - Cash balances 3 234 6 533 Total assets 495 486 396 647 Ordinary shareholders` equity 427 098 379 071 Non-current liability 55 491 5 212 Interest-bearing debt 48 124 - Deferred tax liability 7 367 5 212 Current liabilities 12 897 12 364 Interest-bearing debt 5 133 7 350 Accounts payable 7 764 5 014 Total equity and liabilities 495 486 396 647 Shareholders` equity with investments At intrinsic value - R`000 569 679 502 696 Net asset value per share - cents 922 825 Net asset value per share with investments at directors` valuation (intrinsic value) - cents +12% 1 230 1 094 Number of shares in issue less held in share trust/treasury - 000`s 46 320 45 968 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS for the year ended 31 December 2010 12 months 12 months 31 Dec 31 Dec 2010 2009
Audited Audited R`000 R`000 Cash generated by operating activities 552 17 632 Cash generated by investing activities (45 054) 11 333 Cash effects of financing activities 50 359 701 Cash utilised for the payment of dividends (6 939) (6 479) Change in cash and cash equivalents (1 082) 23 187 Cash balances, less interest-bearing debt, at beginning of year (817) (24 004) Interest-bearing debt, less cash balances, at end of year (1 899) (817) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2010 12 months 12 months 31 Dec 31 Dec 2010 2009
Audited Audited R`000 R`000 Gross income from operations and investments 100 031 78 938 Dividends received 17 208 34 939 Interest received 2 884 1 567 (Loss)/income on financial instruments and shares (1 166) 9 976 Fees and sundry income 5 125 2 809 Fair value adjustments to investments 21 585 8 274 Equity accounted retained income of associates 54 395 21 373 Share of net income of associates 68 752 53 936 Less: Dividends received (14 357) (32 563) Impairments (144) (181) Interest paid 3 892 3 467 Net income before expenses and exceptional items 96 283 75 652 Less: Expenditure 23 103 18 538 Operating costs 22 783 18 208 Depreciation 320 330 Exceptional items - gains 325 9 344 Net income before taxation 73 505 66 458 Taxation - deferred 2 849 2 374 Net income for the year attributable to equity shareholders 70 656 64 084 Translation of foreign subsidiary/associates (1 515) (1 536) Total comprehensive income for the year attributable to equity shareholders 69 141 62 548 Earnings per share - cents 154,0 139,1 Dividends per share (proposed after year-end) - cents +21% 17,0 14,0 Weighted average number of shares in issue - 000`s 45 869 46 078 Headline earnings per share - cents +29% 153,0 118,8 Reconciliation of headline earnings Net income for the year 70 656 64 084 Exceptional gains - group (236) (14 153) Exceptional losses - associates - 4 628 (Gains)/losses arising from former finance operations (89) 181 Profit on sale of property, plant and equipment (167) - Headline earnings for the year 70 164 54 740 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 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 year - - (1 536) 64 084 62 548 Accumulated loss in share trust - - (1 452) - (1 452) 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 year - - (1 515) 70 656 69 141 Loss in share trust - written back - - 808 - 808 Share-based payment charge - written back - - (643) - (643) Attributable income of associates - - 54 395 (54 395) - Movement in translation and other reserves of associates - - (16 081) - (16 081) 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) Shares of "N" ordinary Shares - 2 600 - - 2 600 Dividends paid - - - (6 939) (6 939) Balance as at 31 December 2010 864 50 618 278 753 96 863 427 098 Contingent liabilities 1. The group has rights and obligations in terms of shareholder and purchase and sale agreements relating to its present and former investments. 2. Commitments for the lease of premises are as follows: Year 1 R1,167 million Years 2 R0,507 million INVESTMENT PROFILE at 31 December 2010 Economic Carrying Directors` Number interest value value of shares % R`000 R`000
Investments in associates Unlisted Flowmax Holdings Limited (BVI/UK) 40,0 SA Bias Industries (Pty) Limited 57,3* Set Point Group (Pty) Limited 49,8 Sunspray Food Ingredients (Pty) Limited 47,1 329 373 522 945 * Voting interest 48,8% Long-term investments Unlisted Korbitec Holdings (Pty) Limited 8,5 Korbicom (Pty) Limited 17,0 Primedia Holdings 1 Limited - JJPIK Loans - Transaction Capital (Pty) Limited 1 000 000 - 20 048 20 048 Listed Brait SA 600 000 - 14 520 Datatec Limited 1 000 000 - 33 300 Metrofile Holdings Limited 20 400 000 5,0 43 248 Net1 UEPS Technologies Inc 100 000 - 8 250 99 318 99 318 Total long-term investments and associates 448 739 642 311 Short-term investments Listed Foreign 13 486 RSA 2 535 16 021 16 021 Total investment holdings 464 760 658 332 PERFORMANCE INDICATORS Annualised Compound Compound Growth Growth 1 year 5 years
(%) (%) Headline earnings per share 28,8 15,6 Dividends per share 21,4 23,2 Intrinsic net asset value per share 12,4 20,7 COMMENTARY PROFILE Sabvest is an investment 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 four unlisted industrial groups which are accounted for as associates, and a long-term portfolio of eight other investments which are accounted for on a fair value basis. Four of these are JSE listed. In addition, Sabvest maintains finance advances and share and debt instrument portfolios and undertakes other fee and profit earning activities. FINANCIAL RESULTS Sabvest`s results for the twelve months were very satisfactory with a good performance from its associated companies and higher than expected fair value adjustments to its investment portfolios. Headline earnings per share increased by 29% to 153 cents per share and the dividends for the year have been increased by 21% to 17 cents per share. Intrinsic value per share increased by 12% to 1 230 cents per share. The extent of the increase was affected by the strong Rand at the financial year- end due to the conversion at these rates of the overseas assets held by the group through SA Bias Industries and Flowmax UK. Shareholders` funds with investments at intrinsic value (net of notional CGT) increased to R570m. A four year loan of R35m has been raised to facilitate the group`s South African investment programme. An offshore ring-fenced thirteen months notice facility of $2m has been arranged to enable the group to re-open its overseas short-term portfolio which is currently focused on the IT sector. It is Sabvest`s intention to maintain a moderate level of gearing to enhance investment returns. At the reporting date net interest-bearing debt amounted to 9% of shareholders` equity at intrinsic value. With regard to the lower dividends received for the year, certain dividends that were previously accounted for in the second half of each year and paid in the first half of the following financial year will now be declared and paid in the first half of the following financial year. Operating costs for the year included R2,6m of one-off items arising from special incentives and the winding up of the group`s share appreciation rights scheme as explained to shareholders in the circular dated 7 December 2010. All three executive directors are now direct shareholders in the company. With regard to medium-term growth, over a five-year period, headline earnings per share grew by 15,6% p.a., dividends per share by 23,2% p.a. and intrinsic net asset value per share by 20,7% p.a. - all in excess of the group`s growth targets. INDUSTRIAL ASSOCIATES Sabvest`s four unlisted industrial associates performed well with Sabvest`s share of their after tax income increasing by 28% to R69m. On a look-through basis and notwithstanding the effects of the strong Rand, the unaudited combined revenue of the four groups for the twelve months was R1,3bn, EBITDA R222m and PBT R182m. 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 1m shares in Transaction Capital (Pty) Limited - a specialised financial group. - Increased its investment in Korbitec Holdings (Pty) Limited, a subsidiary of Naspers, to 8,5%. - Acquired 0,6m shares in Brait SA, which is listed on the Luxembourg and JSE exchanges. - Acquired 0,1m shares in Net1 UEPS Technologies Inc, which is listed on NASDAQ and the JSE. - Reopened its offshore portfolio with investments on NASDAQ in Check Point Software Technologies, Google and Qualcomm. - Disposed of its equity interests in Nimble Group through the sale of its investment in Ridge Empowerment Capital but retained the participations held by it in the Nimble and West Central debt funds. With regard to the group`s associates: - Flowmax UK expanded the spread of its five industrial distribution businesses in the UK through the acquisitions of Anglo Nordic Burners Products Limited, Bell Flow Systems Limited and Fluidwell (UK) Limited. - SA Bias Industries disposed of its Hanger Pro operating unit in RSA. DIVIDEND POLICY The group`s policy is to pay an interim and a final dividend. The extent of the dividends is determined relative to net operating cash flows and from receipts from finance advances and the realisation of investments that are not earmarked for new projects. 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 its directors. ACCOUNTING POLICIES The condensed financial statements have been prepared in accordance with the group`s accounting policies which are consistent with those of the previous year`s financial statements and comply with IFRS and the AC 500 standards as issued by the Accounting Practices Board or its successor. This announcement contains the information required by IAS 34 - Interim Financial Reporting. AUDIT OPINION Deloitte & Touche has issued an unmodified audit opinion. A copy of the audit report is available for inspection at the registered office of the company. PROSPECTS All of the group`s associates are projecting improved earnings in 2011. In addition, most of the companies in the group`s investment portfolios are also expected to record improved results although the extent to which this will be reflected in share prices or valuations is obviously uncertain. As a result we anticipate an improvement in Sabvest`s results in the year ahead. 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 CEO CFO Sandton 2 March 2011 CASH DIVIDEND DECLARATION Notice is hereby given that a final cash dividend of 13 cents (2009: 11 cents) per ordinary share and "N" ordinary share for the twelve months ended 31 December 2010 has been declared payable to shareholders in accordance with the undermentioned timetable: Last date to trade "CUM" dividend Thursday, 17 March 2011 Trading "EX" dividend commences Friday, 18 March 2011 Record date Friday, 25 March 2011 Dividend payment date Monday, 28 March 2011 No dematerialisation or rematerialisation of share certificates will be allowed for the period from Friday, 18 March 2011 to Friday, 25 March 2011, both days inclusive. Sabvest Limited Registered address: 4 Commerce Square, 39 Rivonia Road, Sandhurst, Sandton 2196 Communications: Postal address: PO Box 78677, Sandton 2146, Republic of South Africa 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: 02/03/2011 12:47:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). 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