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Reviewed provisional group results for the year ended 30 June 2012
Sable Holdings Limited
(Sable or the company or the group)
(Incorporated in the Republic of South Africa)
(Registration No. 1968/010636/06)
Share code: SBL
ISIN code: ZAE000006383
The reviewed consolidated condensed group results for the year
ended 30 June 2012 have been prepared by the financial director,
KA Haswell CA(SA).
Reviewed provisional group results for the year ended 30 June 2012
Earnings per share up 16,2%
Headline earnings per share up 215,9%
Consolidated condensed statement of financial position
As at 30 June
Reviewed Audited
R000 2012 2011
ASSETS
Non-current assets 538 775 532 220
Investment property 267 049 273 145
Investments 35 060 35 825
Investments in joint ventures 232 743 218 122
Deferred taxation 381 106
Other non-current assets 3 542 5 022
Current assets 34 097 13 229
Cash and cash equivalents 4 542 1 196
Other current assets 29 555 12 033
Non-current asset held for sale 3 200
Total assets 576 072 545 449
EQUITY AND LIABILITIES
Reserves 424 004 400 297
Non-current liabilities 118 015 124 957
Interest-bearing borrowings 97 269 96 615
Deferred taxation 20 746 28 342
Current liabilities 34 053 20 195
Interest-bearing borrowings 11 769 7 317
Bank overdraft 2 202
Other current liabilities 20 082 12 878
Total equity and liabilities 576 072 545 449
Weighted average number of ordinary
shares in issue net of treasury shares
(000) 9 175 9 175
Net asset value per ordinary share
(cents) 4 621 4 363
Consolidated condensed statement of comprehensive income
Year ended 30 June
Reviewed Audited
R000 2012 2011
Revenue 31 361 30 203
Turnover 30 957 29 477
Profit from operations 12 821 8 872
(Loss)/profit on disposal of investments
and investment property (822) 949
Profit on disposal of investments 172 7
(Loss)/profit on disposal of investment
property (994) 942
Fair value (impairment)/gains on
investments and investment property (3 151) 4 234
Fair value gains/(impairment) of
investments 85 (61)
Net (impairment)/gains on revaluation of
investment property (3 236) 4 295
Profit before net finance costs and
taxation 8 848 14 055
Income from investments 46 48
Finance income 404 726
Finance costs (9 786) (9 589)
Share of profit from joint ventures 16 752 16 422
Profit before taxation 16 264 21 662
Taxation 7 386 (1 331)
Net profit for the year 23 650 20 331
Other comprehensive income
Total comprehensive income for the year 23 650 20 331
Total comprehensive income attributable
to:
Equity shareholders of Sable Holdings
Limited 23 647 20 343
Non-controlling interest 3 (12)
Earnings and diluted earnings per
ordinary share (cents) 257,7 221,7
Consolidated condensed statement of cash flows
Year ended 30 June
Reviewed Audited
R000 2012 2011
Cash inflow/(outflow) from operating
activities 8 561 (9 193)
Cash (outflow)/inflow from investing
activities (15 608) 35 749
Cash inflow/(outflow) from financing
activities 8 191 (24 150)
Net increase in cash and cash equivalents 1 144 2 406
Cash and cash equivalents at the
beginning of the year 1 196 (1 210)
Cash and cash equivalents at the end of
the year 2 340 1 196
Cash and cash equivalents at the end of
the year comprise of:
Cash and cash equivalents 4 542 1 196
Bank overdraft (2 202)
2 340 1 196
Reconciliation of net profit for the year to headline earnings
Year ended 30 June
Reviewed Audited
R000 2012 2011
Net profit attributable to equity
shareholders of the holding company 23 647 20 343
Adjustments through subsidiaries:
Loss/(profit) on disposal of investment
property 994 (942)
Net fair value impairment/(gains) of
investment property 3 236 (4 295)
Tax effects of adjustments (743) 1 334
Adjustments through joint ventures:
Loss/(profit) on disposal of investment
property 1 747 (1 008)
Fair value gains on investment property (15 293) (14 293)
Tax effects of adjustments 2 473 3 946
Headline earnings for the year 16 061 5 085
Headline earnings per ordinary share
(cents) 175,0 55,4
Consolidated condensed segmental analysis
Year ended 30 June
Reviewed Audited
R000 2012 2011
Segmental revenue 31 361 30 203
Investment property 29 285 27 949
Commercial 6 196 5 406
Industrial 11 601 11 805
Retail 10 307 9 979
Residential 1 181 759
Corporate and inter-segment charges 2 076 2 254
Profit before taxation 16 264 21 662
Investment property 8 146 14 621
Commercial 4 023 7 468
Industrial 535 3 910
Retail 3 030 3 136
Residential 558 107
Corporate and inter-segment charges 8 118 7 041
Investment property 267 049 273 145
Commercial 74 276 63 901
Industrial 96 422 96 544
Retail 83 151 99 500
Residential 13 200 13 200
Consolidated statement of changes in equity
Share Non- Non-
capital Distri- Control-
and butable Retained ling Total
R000 premium reserves earnings interests equity
Balance at 30 June 379
2010 51 425 108 698 219 774 69 966
Total comprehensive 20
income for the year 20 343 (12) 331
Share of profit from
joint ventures 16 422 (16 422)
Balance at 30 June 400
2011 51 425 125 120 223 695 57 297
Total comprehensive 23
income for the year 23 647 3 650
Dividends 57 57
Share of profit from
joint ventures 16 752 (16 752)
Balance at 30 June 424
2012 51 425 141 872 230 647 60 004
Basis of preparation and accounting policies
The reviewed consolidated condensed group results have been
prepared in accordance with the Framework concepts and the
measurement and recognition requirements of the International
Financial Reporting Standards IFRS and containing information
required by IAS 34 Interim Financial Reporting and AC 500
standards as issued by the Accounting Practices Board, the JSE
Limited Listings Requirements and in the manner required by the
Companies Act, 71 of 2008, as amended and has been consistently
applied to the prior year. The accounting policies and methods of
computation are consistent with those used in the annual financial
statements for the financial year ended 30 June 2011, except for
the early adoption of the amendment to IAS 12 Income Taxes that
introduces a rebuttable presumption that investment property will
be recovered through sale. The adoption of the amendment resulted
in a taxation credit of R7,4 million (2011: R1,3 million taxation
charge). The consolidated condensed statement of financial
position as at 30 June 2012 and the related consolidated condensed
statement of comprehensive income, consolidated condensed
statement of changes in equity and statement of cash flow for the
year ended have been reviewed and reported on by the groups
auditors. The financial statements have not been audited in
accordance with the requirements of the Companies Act, Section
29(e)(i).
The reviewed consolidated condensed group results have been
approved by the board on 17 September 2012 and will be published
on 28 September 2012.
Review opinion
The condensed consolidated group results have been reviewed by
Mazars, who have performed their review in accordance with ISRE
2410 Review of interim financial information performed by the
independent auditor of the entity. A copy of the unqualified
review report is available for inspection at the registered office
of the company.
Directors commentary on results
Comparative analysis between 30 June 2012 (reviewed) and 30 June
2011 (audited)
The group reported a net profit of R23,7 million (2011: R20,3
million) for the year ended 30 June 2012. Earnings per share
increased by 16,2% from 221,7 cents to 257,7 cents, with no
dilution in either year, whilst headline earnings per share
increased by 215,9% from 55,4 cents to 175,0 cents per share.
Operating profit for the year was R12,8 million (2011: R8,9
million) whilst disposals and fair value adjustments on
investments and investment property resulted in a net impairment
of R4,0 million (2011: R5,2 million - net gain). Share of profit
from joint ventures reported for the year was R16,8 million (2011:
R16,4 million), of which fair value adjustments and disposals were
R13,5 million (2011: R15,3 million).
Consolidated condensed statement of comprehensive income
Revenue for the year increased by 3,8% from R30,2 million to R31,4
million owing to better occupancy levels achieved within the group
as well as recognising the impact on billing of disposals of
industrial and commercial investment property in 2011 valued at
R40,6 million.
(Loss)/profit on disposal of investments and investment property
decreased from a profit of R0,9 million to a loss of R0,8 million.
A R1,0 million loss was incurred due to the disposal of Fairlands
Shopping Centre, due to the disposal value being below stated
market value. Investments in listed shares were disposed of at a
profit of R0,2 million during the year.
Fair value (impairment)/gains on investments and investment
property decreased from a net gain of R4,2 million to a net
impairment of R3,2 million. The net impairment was attributable to
Norbuy Office Park and Patterson Candy, a commercial and
industrial park respectively, that was revalued to cost due to
high vacancy levels within these parks.
Finance costs, net of investment and finance income, increased
from R8,8 million to R9,3 million. The increase in finance costs
was attributable to increased borrowings required to fund the new
office building development at Hertford Office Park, located in
Midrand, Johannesburg.
Share of profit from joint ventures increased from R16,4 million
to R16,8 million. Profit from operations increased from R5,0
million to R5,7 million. Fair value gains and profit from disposal
of investment property decreased from R11,4 million to R11,0
million. The most notable movements during the year were as
follows: Hobart Grove Retail Shopping Centre and Visiomed Office
Park were revalued for the first time since re-development and
acquisition and yielded fair value gains of R5,5 million and R3,7
million respectively, as well as the Amrich property portfolio
reflecting a fair value increase of R5,6 million.
Taxation for the year ended increased from a taxation charge of
R1,3 million to a taxation credit of R7,4 million. This is due to
the change in method of calculating deferred taxation on
investment property based on the early adoption of the amendment
to IAS 12: Rebuttable presumption introduced that investment
property would be recovered through sale, being at the capital
gains taxation rate of 18,67%.
Consolidated statement of financial position as at 30 June 2012
Investment property
30 June 2012 30 June 2011
Analysis of Number of Number of
investment R000 properties R000 properties
property
Carrying value at
the beginning of
the year 273 145 15 310 858* 22
Additions 17 067 1 1 543
Disposals and
transfers (16 727) (1) (43 551) (7)
Revaluations (3 236) 4 295
Carrying value at
the end of the
year 270 249^ 15 273 145 15
These balances are inclusive of a non-current asset held for sale
of ^R3,2 million (*2011: R36,0 million).
Investment property has decreased from R273,1 million to R270,2
million. This is due to the disposal of Fairlands Shopping Centre
for R16,6 million however development costs of R14,0 million were
invested in Hertford Office Park. An industrial park located in
Laserdowns, Johannesburg, has been disposed of for R3,2 million
and has been classified as a non-current asset held for sale.
Investments in joint ventures increased by R14,6 million as a
result of net loan funding inflows of R2,2 million and a share of
profits of R16,8 million.
Other non-current assets decreased from R5,0 million to R3,5
million due to a transfer of Plant and equipment to Investment
property.
Other current assets, which comprise of receivables and inventory,
increased from R12,0 million to R29,6 million. The increase is
attributable to the disposal of Fairlands Shopping Centre which is
reflected as a receivable. The centre is expected to be
transferred in October 2012.
Interest-bearing borrowings have increased from R103,9 million to
R109,0 million. The increase in interest-bearing borrowings is
being utilised to fund the development at Hertford Office Park.
Other current liabilities have increased from R12,8 million to
R20,1 million. The increase comprises of a prepayment of R3,2
million for two industrial mini units that have been disposed of
and an increase in trade and VAT payables of R4,1 million.
Significant current developments and prospects
Joint ventures
The unbundling disposal of 63 000m² zoned industrial land situated
at Gosforth Park, Germiston, to a development company in which
Sable is a 50% co-owner, allows for a more timeous and co-
ordinated rollout of large industrial warehousing developments
within a 273 000m² industrial estate. A similar share restructure
of shareholding is currently being concluded at a commercial site
next to Montecasino, Fourways.
Litigation
On 17 November 2011, Sable received notification of an application
made to the High Court against a group company seeking to claim
compensation for alleged dealings conducted prior to 2001. The
matter is being defended and the directors and groups legal
advisors consider the likelihood of action against the group
company being successful, as remote. Except for the above, the
directors are not aware of any legal or arbitration proceedings
active, pending or threatened against or being brought by the
company, which may have a material effect on the groups financial
position.
Directorate
Mr Dawid Pennington resigned and was replaced by Mr Clinton
Froneman being appointed as an independent non-executive director.
Mr Fronemans knowledge of investment property coupled with his
strong financial background will complement the existing board and
audit committee. The board would like to welcome Mr Froneman and
wish him all the best in his new position. The board wishes to
thank Mr Pennington for his valuable contribution to the company
over the past three years.
Dividends
The board of directors have resolved not to declare a dividend for
the year ended 30 June 2012. All cash reserves have been earmarked
for funding development and investment property opportunities
within the group.
Corporate activity
Termination and appointment of designated advisor
Sable has terminated the mandate of Sasfin Capital, a division of
Sasfin Bank Limited, as designated advisor to the company due to
the parties being unable to reach agreement on the terms of the
renewal of such mandate. Java Capital Trustees and Sponsors
(Proprietary) Limited has been appointed as designated advisor to
the company, with effect from 1 July 2012.
Cautionary announcement relating to a potential delisting of the
companys shares from the JSE Limited
Shareholders are advised that the companys board of directors are
considering a possible delisting of the companys shares from the
JSE Limited. Any delisting proposal would be accompanied by a cash
offer (at a price verified by an independent expert as being fair
subject to directors approval) to be made to all shareholders who
wish to monetise their investment in the company. Discussions in
this regard are ongoing and accordingly shareholders are advised
to continue to exercise caution when dealing in their shares in
the company.
Related party transactions
Management fees were charged to joint ventures during the year.
Events after reporting period end
Sables board of directors are not aware of any reportable
material events that have occurred between the end of the
financial period and the date of this report.
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.
For and behalf of the board
PH Nash (Chairman)
GBJ Bowes (Managing director)
26 September 2012
Directors: PH Nash (Chairman)*, GBJ Bowes (Managing), KA Haswell
(Financial), IA Chambers*, CC Froneman*, JN Snell* (*non-
executive)
Registered office: Sable Place, Fairway Office Park, 52 Grosvenor
Road,
Bryanston 2021. PO Box 786390, Sandton 2146
Transfer secretaries: Computershare Investor Services
(Proprietary) Limited,
70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown
2107
Designated Advisor: Java Capital Trustees and Sponsors
(Proprietary) Limited
Date: 28/09/2012 08:42:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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