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SBV/SVN - Sabvest Limited - Abridged audited results for the year ended 31
December 2011 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: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 December 2011 AND CASH
DIVIDEND DECLARATION
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
as at 31 December 2011
31 Dec 31 Dec
2011 2010
Audited Audited
R`000 R`000
Non-current assets 563 755 453 800
Property, plant and equipment 616 745
Deferred tax asset - 555
Share trust receivables 4 131 3 761
Investment holdings 559 008 448 739
Associates 403 072 329 373
Long-term investments 155 936 119 366
Current assets 18 385 41 686
Finance advances and receivables 5 943 16 532
Other financial instruments 7 727 5 899
Short-term investments 2 363 16 021
Cash balances 2 352 3 234
Total assets 582 140 495 486
Ordinary shareholders` equity 517 323 427 098
Non-current liability 49 417 55 491
Interest-bearing debt 40 000 48 124
Deferred tax liability 9 417 7 367
Current liabilities 15 400 12 897
Interest-bearing debt 7 915 5 133
Accounts payable 7 485 7 764
Total equity and liabilities 582 140 495 486
Net asset value per share - cents 1 120 922
Net asset value per share with
investments in associates
valuation (intrinsic value) - cents 1 563 1 230
Number of shares in issue less held in
share trust/treasury - 000`s 46 172 46 320
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
for the year ended 31 December 2011
31 Dec 31 Dec
2011 2010
Audited Audited
R`000 R`000
Cash generated by operating activities 4 533 552
Cash generated by/(utilised in)
investing activities 9 111 (45 054)
Cash effects of financing activities (9 441) 50 359
Cash utilised for the payment of dividends (7 867) (6 939)
Change in cash and cash equivalents (3 664) (1 082)
Current interest-bearing debt, less cash
balances, at beginning of year (1 899) (817)
Current interest-bearing debt, less cash
balances, at end of year (5 563) (1 899)
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2011
31 Dec 31 Dec
2011 2010
Audited Audited
R`000 R`000
Gross income from operations
and investments 115 522 100 031
Dividends received 29 302 17 208
Interest received 881 2 884
Income on financial instruments
and shares 6 223 (1 166)
Fees and sundry income 2 407 5 125
Fair value adjustments to
Investments 21 027 21 585
Equity accounted retained
income of associates 55 682 54 395
Share of net income of associates 81 631 68 752
Less: Dividends received (25 949) (14 357)
Direct transactional costs 209 -
Impairments 1 013 (144)
Interest paid 4 741 3 892
Net income before expenses
and exceptional items 109 559 96 283
Less: Expenditure 24 610 23 103
Operating costs 24 460 22 783
Depreciation 150 320
Exceptional items - losses/(gains) 692 (325)
Net income before taxation 84 257 73 505
Taxation - deferred 2 606 2 849
Net income for the year attributable
to equity shareholders 81 651 70 656
Translation of foreign subsidiary/
associates 2 289 (1 515)
Total comprehensive income for the
year attributable to equity
shareholders 83 940 69 141
Earnings per share - cents 176,6 154,0
Dividends per share 20 cents
(2010: 13 cents)
(proposed after year-end) - cents 24,0 17,0
Weighted average number of shares
in issue - 000`s 46 236 45 869
Headline earnings per share - cents 178,1 153,0
Reconciliation of headline earnings
Net income for the year 81 651 70 656
Exceptional losses/(gains) - group 985 (236)
Exceptional gains - associates (293) -
(Gains)/losses arising from former
finance operations - (89)
Profit on sale of property, plant
and equipment - (167)
Headline earnings for the year 82 343 70 164
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
as at 31 December 2011
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 2010 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
Total comprehensive
income for the year - - 2 289 81 651 83 940
Loss in share trust
- written back - - 11 - 11
Attributable income
of associates - - 55 975 (55 975) -
Movement in translation
and other reserves
of associates - - 15 470 - 15 470
Shares held in treasury (7) (1 255) - - (1 262)
Shares held in treasury
- written back 3 362 - - 365
Shares held in share
trust (3) (2 778) - - (2 781)
Shares held in share trust
- written back - 2 349 - - 2 349
Dividends paid - - - (7 867) (7 867)
Balance as at
31 December 2011 857 49 296 352 498 114 672 517 323
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 R420 000
INVESTMENT PROFILE
at 31 December 2011
Economic Carrying Intrinsic
interest value value
% R`000 R`000
Unlisted Industrial Associates
Flowmax Holdings Limited (BVI/UK) 40,00
SA Bias Industries (Pty) Limited* 57,30
Set Point Group (Pty) Limited 49,80
Sunspray Food Ingredients
(Pty) Limited 47,10
403 072 677 644
* Voting interest 48,5%
Unlisted Investments
Korbitec Holdings (Pty) Limited
Korbicom (Pty) Limited
Primedia Holdings
1 Limited - JJPIK Loans
Transaction Capital
(Pty) Limited
19 161 19 161
Listed Investments Ordinary shares
Brait SA 1 500 000 29 925
Datatec Limited 1 000 000 40 900
Metrofile Holdings
Limited 20 500 000 59 450
Net1 UEPS Technologies
Inc 100 000 6 500
Other 2 363
139 138 139 138
Total portfolio 561 371 835 943
PERFORMANCE INDICATORS
Compound Compound
Growth Growth Growth
1 year 3 years 8 years
Cents (%) (%) (%)
Intrinsic net asset
value per share 1 563 27,07 15,44 20,66
Dividends per share 24 41,18 19,68 29,68
Headline earnings per share 176 16,41 25,59 17,36
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 Investment
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 bond and debt
instrument portfolios and undertakes other fee and profit earning activities.
FINANCIAL RESULTS
Sabvest achieved good results for the twelve months. Headline earnings per
share increased by 16% to 177 cents per share and intrinsic value per share
by 27% to 1 563 cents per share.
The growth in HEPS was achieved through higher attributable earnings of
associates and the strong share price performance of the listed investments.
Operating costs include once-off amounts totalling R3,5 million which will
not recur in 2012.
The increase in intrinsic value was aided by exchange gains on the group`s
foreign operations and investments through SA Bias Industries and Flowmax due
to the weakening of the Rand.
Shareholders` funds with investments at intrinsic value increased to R722m.
Net gearing reduced to 6%.
Steadily increasing cash flows from the group`s industrial associates have
enabled Sabvest to declare an increase in dividends of 41% to 24 cents per
share.
With regard to medium-term growth, Sabvest continues to exceed its
performance targets. Intrinsic net asset value per share has increased at a
compound rate of 21% over the past eight years, dividends per share at 29%
and HEPS at 17%.
PERFORMANCE AND VALUATION OF INDUSTRIAL ASSOCIATES
Sabvest`s four unlisted industrial associates performed well with Sabvest`s
share of their after tax income increasing by 19% to R82m. Flowmax and
Sunspray recorded particularly strong results during the period and
satisfactory results were achieved by Set Point and SA Bias Industries. On a
look-through basis the unaudited combined revenue of the four groups for the
twelve months increased by 18,4% to R1,55bn.
In determining intrinsic values, Sabvest`s associates have been valued using
the maintainable
earnings multiple model with PE ratios in the 6,5 to 7,5 times range,
adjusted for net cash or net debt in each.
The valuation of associates increased by 29,6% to R677,7m year on year.
CHANGES IN INVESTMENT HOLDINGS
During the period, Sabvest:
- Increased its holding in Brait SA to 1,5 million shares.
- Disposed of its listed foreign portfolio.
- Provided financial support to some of its unlisted investee
companies for their growth programmes.
With regard to Sabvest`s industrial associates:
- Flowmax acquired DEA Engineering in the USA and 60% of
Mechtronic in the UK.
- Set Point Group opened a new water laboratory with 16 quality
accreditations, new operating units in the WearCheck oil
analysis division in Dubai and India and widened the scope of
the international activities of African Mineral Standards.
DIVIDENDS
Dividends are determined relative to Sabvest`s own expected recurring net
cash flows from investments, realisations and services over a period that are
not earmarked for new investments. Dividends are considered twice annually.
Dividends for the year have been increased from 17 cents to 24 cents per
share.
Over the past eight years dividends have been maintained or increased
annually.
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.
BASIS OF PREPARATION
These condensed consolidated annual financial statements have been prepared
in accordance with the framework concepts, the recognition and measurement
criteria of International Financial Reporting Standards (`IFRS`) and comply
with the disclosure requirements of International Accounting Standard 34:
Interim Financial Reporting as issued by the International Accounting
Standards Board (`IASB`), the AC 500 standards as issued by the Accounting
Practices Board, the JSE Listings Requirements and the requirements of the
Companies Act No 71 of 2008, as
amended. They have been prepared on the historical cost basis, except for
certain financial instruments which are measured at fair value or at
amortised cost. The significant accounting
policies and methods of computation are consistent in all material respects
with those applied in the previous financial year, except as disclosed below.
The significant accounting policies are available for inspection at the
Group`s registered office. There has been no material changes in judgments or
estimates of amounts reported in prior reporting periods.
The Group adopted the new, revised or amended accounting pronouncements as
issued by the IASB, which were effective and applicable to the Group from 1
January 2011. The application of these changes however, had no impact on the
Group`s financial results for the period.
The preparation of these condensed consolidated financial statements was
supervised by the Chief Financial Officer, R Pleaner CA(SA).
AUDIT OPINION
The group`s annual financial statements have been audited by the independent
auditors, Deloitte & Touche, whose unmodified audit report is available for
inspection at the Group`s registered office. The condensed financial
information presented has been derived from the audited annual financial
statements for the year ended 31 December 2011.
PROSPECTS
All of the group`s associates are projecting improved earnings in 2012. In
addition, most of the companies in the group`s investment portfolios are
expected to record improved results although the extent to which these will
affect listed share prices is obviously uncertain. The group`s net operating
cash flows are also expected to increase.
As a result we anticipate a satisfactory year ahead.
These projections have not been reviewed and reported on by the group`s
external auditors.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman CEO CFO
Sandton
24 February 2012
Cash Dividend Declaration
Notice is hereby given that a final cash dividend of 20 cents (2010: 13
cents) per ordinary share and "N" ordinary share for the twelve months ended
31 December 2011 has been declared payable to shareholders in accordance with
the undermentioned timetable:
Last date to trade "CUM" dividend Thursday, 15 March 2012
Trading "EX" dividend commences Friday, 16 March 2012
Record date Friday, 23 March 2012
Dividend payment date Monday, 26 March 2012
No dematerialisation or rematerialisation of share certificates will be
allowed for the period from Friday, 16 March 2012 to Friday, 23 March 2012,
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
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: 24/02/2012 12:47:01 Supplied by www.sharenet.co.za
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