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UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012 AND CASH DIVIDEND DECLARATION
SABVEST LIMITED
Registration number 1987/003753/06
(“Sabvest” or “the group”)
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 2012
AND CASH DIVIDEND DECLARATION
Increase in intrinsic value per share 31%
Increase in HEPS 185%
Increase in dividend per share 200%
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
at 30 June 2012
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2012 2011 2011
R’000 R’000 R’000
Non-current assets 629 231 487 347 563 755
Property, plant and equipment 1 005 680 616
Share trust receivables 4 445 3 946 4 131
Investment holdings 623 781 482 721 559 008
Associates 427 067 351 028 403 072
Long-term investments 196 714 131 693 155 936
Current assets 30 139 22 270 18 385
Finance advances and receivables 5 230 4 619 5 943
Other financial instruments 9 040 5 985 7 727
Short-term investments 12 600 9 081 2 363
Cash balances 3 269 2 585 2 352
Total assets 659 370 509 617 582 140
Ordinary shareholders’ equity 568 174 440 695 517 323
Non-current liabilities 54 744 47 306 49 417
Interest-bearing debt 40 000 40 135 40 000
Deferred tax liability 14 744 7 171 9 417
Current liabilities 36 452 21 616 15 400
Interest-bearing debt 29 497 15 519 7 915
Accounts payable 6 955 6 097 7 485
Total equity and liabilities 659 370 509 617 582 140
Shareholders’ equity with
investments at intrinsic
value (R’000) 767 386 583 041 721 520
Net asset value per share – cents 1 231 954 1 120
Net asset value per share with
investments in associates at
directors’ valuation (intrinsic
value) – cents 1 662 1 263 1 563
Number of shares in issue
less held in share trust/
treasury – 000’s 46 160 46 176 46 172
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2012
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2012 2011 2011
R’000 R’000 R’000
Cash generated by operating
activities 6 040 644 4 533
Cash (utilised in)/generated by
investing activities (17 310) 3 650 9 111
Cash effects of financing
activities (161) (9 309) (9 441)
Cash utilised for the payment of
dividends (9 234) (6 020) (7 867)
Change in cash and cash
equivalents (20 665) (11 035) (3 664)
Cash and cash equivalents
at beginning of period (5 563) (1 899) (1 899)
Cash and cash equivalents
at end of period (26 228) (12 934) (5 563)
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2012
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2012 2011 2011
R’000 R’000 R’000
Gross income from operations
and investments 72 360 32 724 115 522
Dividends received 18 185 12 817 29 302
Interest received 365 616 881
Income on financial instruments
and shares 1 150 2 926 6 223
Fees and sundry income 1 356 1 148 2 407
Fair value adjustment to
investments 33 771 (3 975) 21 027
Equity accounted retained income
of associates 17 533 19 192 55 682
Share of net income of
associates 35 101 31 539 81 631
Less: Dividends received (17 568) (12 347) (25 949)
Direct transactional costs – – 209
Impairments (57) (81) 1 013
Interest paid 2 606 2 357 4 741
Net income before expenses
and exceptional items 69 811 30 448 109 559
Less: Expenditure 10 784 11 285 24 610
Operating costs 10 735 11 211 24 460
Depreciation 49 74 150
Exceptional items – (gains)/losses – (280) 692
Impairment of associate (46) – –
Net income before taxation 58 981 19 443 84 257
Taxation – deferred 5 327 359 2 606
Net income for the period
attributable to equity
shareholders 53 654 19 084 81 651
Translation of foreign
subsidiary/associates 418 573 2 289
Total comprehensive income
attributable to equity
shareholders 54 072 19 657 83 940
Earnings per share – cents 116,2 41,3 176,6
Dividends per share (proposed
after interim/year-end) – cents 12,0 4,0 24,0
Weighted average number of
shares in issue – 000’s 46 165 46 236 46 236
Headline earnings per
share – cents *1 116,3 40,7 178,1
Reconciliation of headline earnings
Net income for the period 53 654 19 084 81 651
Exceptional (gains)/losses – group – (280) 985
Exceptional (gains) – associates – – (293)
Investment impairment provisions 46 – –
Loss on sale of property, plant
and equipment 4 – –
Headline earnings for the period 53 704 18 804 82 343
*1 There are no diluting instruments.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2012
Non-
distri- Distri-
Share Share butable butable
capital premium reserves reserve Total
R’000 R’000 R’000 R’000 R’000
Balance as at
1 January 2011 864 50 618 278 753 96 863 427 098
Total comprehensive
income for
the period – – 2 289 81 651 83 940
Accumulated profit
in share trust – – 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
Total comprehensive
income for
the period – – 418 53 654 54 072
Accumulated loss
in share trust – – (1) – (1)
Attributable income
of associates – – 17 533 (17 533) –
Movement in
translation and
other reserves
of associates – – 6 175 – 6 175
Shares held in
treasury (7) (1 416) – – (1 423)
Shares held in
treasury –
written back 7 1 255 – – 1 262
Shares held in
share trust (3) (2 778) – – (2 781)
Shares held in
share trust –
written back 3 2 778 – – 2 781
Dividends paid – – – (9 234) (9 234)
Balance as at
30 June 2012 857 49 135 376 623 141 559 568 174
CONTINGENT LIABILITIES
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 lease agreements for the premises that it
occupies.
The amount is due as follows:
Year 1: R0,8m; Year 2: R0,9m; Years 3 to 5: R3,1m.
INVESTMENT PORTFOLIO
at 30 June 2012
Economic Carrying Intrinsic
Number of interest value value
shares % R’000 R’000
Unlisted investments
in associates
Flowmax Holdings Ltd
(BVI/UK) 40,0
SA Bias Industries
(Pty) Ltd 57,3*
Set Point Group
(Pty) Ltd 49,8
Sunspray Food Ingredients
(Pty) Ltd 46,0
427 067 729 500
* Voting interest 48,5%.
Long-term listed investments
Brait SA 1 500 000 38 970
Datatec Ltd 1 000 000 46 750
Metrofile
Holdings Ltd 27 571 496 96 500
Net1 UEPS
Technologies Inc 100 000 6 854
Transaction Capital
(Pty) Ltd 1 000 000 7 640
196 714 196 714
Total long-term
investment holdings 623 781 926 214
Short-term investments 12 600 12 600
Total investment holdings 636 381 938 814
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,
a long-term portfolio of five listed investments accounted for on
a fair value basis and short-term investments accounted for on a
fair value basis.
In addition, Sabvest maintains finance advances and share, bond
and debt instrument portfolios and undertakes other fee and
profit earning activities.
CHANGES IN INVESTMENT HOLDINGS DURING THE PERIOD
Sabvest:
– Increased its investment in Metrofile Holdings Limited by 7,1m
shares to 27,6m shares, representing a 6,7% holding in the
company, for an amount of R20,8m.
– Agreed in principle to the disposal of its investments in
Korbitec and Korbicom which have been transferred from its
long-term portfolio to short-term investments.
With regard to the group’s other investee companies:
– Transaction Capital listed on the JSE in June 2012.
– SA Bias Industries acquired a 20% interest in Flowmax Holdings
Limited (BVI/UK).
– Set Point Group has established a new thermography and
vibration unit as part of its Analytics Division.
FINANCIAL RESULTS
Sabvest achieved excellent results for the six-month period.
The major contributor to the increase in the group’s results was
the material increase in the market values of the group’s major
listed investments – Metrofile, Datatec and Brait. In all three
groups the increases were underpinned by strong operating
performances.
The group’s four listed industrial associates performed in line
with expectations with Sabvest’s share of their net income
increasing 11% to R35,1m.
– Set Point Group achieved a material increase in profitability
mainly due to strong performances in its Analytics Division.
– SA Bias Industries produced sound results higher than the prior
year figures.
– Flowmax UK achieved a solid increase in profitability for the
period although trading conditions in the current economic
climate in the UK are increasingly difficult.
– Sunspray Food Ingredients produced stable results in line with
budgets.
Overall, headline earnings increased by 185% to 116 cents per
share.
Shareholders’ funds with investments at intrinsic value (net of
notional CGT) increased by 31% to R767m notwithstanding the
accounting adjustments required to increase the provisions for
deferred CGT arising from the increase in the CGT rate recently
announced. The full adjustment has been taken in this period and
no changes made to prior periods.
Although short-term borrowings have increased, gearing remains
conservative. The additional borrowings were utilised to take
advantage of a rare opportunity to increase Sabvest’s interest in
Metrofile when a line of shares became available. The debt is
expected to be repaid by year-end from the sale of short-term
investments and retention of cash inflows.
PERFORMANCE AND VALUATION OF INDUSTRIAL ASSOCIATES
On a look-through basis, the unaudited combined revenue of the
four groups for the six months increased by 12,8% to R0,73bn
(2011 – 12 months: R1,55bn) and Sabvest’s share of retained
earnings increased by 11% to R35m.
In determining intrinsic values, Sabvest’s associates have been
valued using the maintainable earnings model with PE ratios in
the 6,5 – 7,5 times range adjusted for net cash or net debt in
each on the same basis as in the prior period.
The valuation of associates increased by 31% to R729,5m year-on-
year.
DIVIDENDS
Dividends are determined relative to Sabvest’s own recurring cash
flows from investments and services and relative to current and
expected capital receipts that are not earmarked for new
transactions.
It is the group’s policy to consider dividends twice annually.
The level of cash generation from the group’s investee companies
continues to increase. Accordingly the dividend for the interim
period has been increased by 200% to 12 cents per share.
As referred to in the dividend declaration, the group has used
STC credits to an extent sufficient for no withholding tax on
dividends to be deducted for any shareholders. After the use of
these credits, the company still has credits equal to 321 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, the Companies Act of South
Africa and have been supervised by the CFO, Mr R Pleaner. The
accounting policies used are consistent with those applied to the
audited financial statements for the year ended 31 December 2011,
except for the Adoption of Annual Improvements to IFRSs.
PROSPECTS
The group’s four industrial associates have sound growth
prospects although some of the markets in which they operate are
increasingly under pressure. The group’s listed investee
companies are all performing well. However, the future movement
in share prices is obviously uncertain and seems unlikely to
repeat the growth in the first six months.
Overall we anticipate a satisfactory year for the group.
The above forecast information has 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 Chief Executive CFO
23 July 2012
Sandton
CASH DIVIDEND DECLARATION
Notice is hereby given that an interim gross cash dividend of 12
cents (2011: 4 cents) per ordinary and “N” ordinary share, out of
income reserves, for the six months ended 30 June 2012 has been
declared.
The issued share capital of the company at the declaration date
is 17 295 984 ordinary and 29 479 854 “N” ordinary shares. The
income tax number of the company is 9375/105/716.
The company has utilised STC credits amounting to 12 cents per
share. As a result there will be no dividend withholding tax from
the interim dividend for any Sabvest shareholders including those
who are not exempt by definition.
Last date to trade “CUM” dividend Friday, 10 August 2012
Trading “EX” dividend commences Monday, 13 August 2012
Record date Friday, 17 August 2012
Dividend payment date Monday, 20 August 2012
No dematerialisation or rematerialisation of share certificates
will be allowed during the period Monday, 13 August 2012 to
Friday, 17 August 2012, 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
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: 23/07/2012 11:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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