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Audited consolidated summarised results for the year ended 31 December 2015 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
AUDITED PRELIMINARY CONSOLIDATED SUMMARISED RESULTS FOR THE YEAR
ENDED 31 DECEMBER 2015 AND CASH DIVIDEND DECLARATION
HIGHLIGHTS
Headline earnings per share 1 004 cents UP 125,7%
Dividends per share 50 cents UP 16,3%
Net asset value per share 3 719 cents UP 38,6%
CONSOLIDATED SUMMARISED STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
31 Dec 31 Dec
2015 2014
Audited Audited
R’000 R’000
Non-current assets 1 896 073 1 380 032
Property, plant and equipment 1 369 1 529
Investment holdings 1 894 704 1 378 503
Unlisted investments 1 297 894 1 070 973
Listed investments 596 810 307 530
Current assets 202 427 175 714
Finance advances and receivables 7 319 11 545
Offshore investment holdings 140 077 164 018
Share portfolio – 99 813
Equity investment 46 671 23 247
Bond portfolio 26 452 40 958
Offshore cash investment portfolio 66 954 –
Cash balances 55 031 151
Local 55 031 151
Total assets 2 098 500 1 555 746
Ordinary shareholders’ equity 1 701 382 1 233 073
Non-current liabilities 356 556 237 859
Interest-bearing debt 100 000 60 000
Deferred tax liabilities 256 556 177 859
Current liabilities 40 562 84 814
Interest-bearing debt 9 240 69 040
Offshore portfolio finance – 64 049
Local other interest-bearing debt 9 240 4 991
Accounts payable and provisions 31 322 15 774
Total equity and liabilities 2 098 500 1 555 746
Net asset value per share with
investments at fair value – cents 3 719 2 683
Number of shares in issue less held in
treasury – 000’s 45 748 45 960
CONSOLIDATED SUMMARISED STATEMENT OF CASH FLOWS
for the year ended 31 December 2015
31 Dec 31 Dec
2015 2014
Audited Audited
R’000 R’000
Cash generated by operating activities 62 099 19 713
Cash generated by investing activities 39 267 37 102
Cash effects of financing activities * (20 402) 16 378
Cash utilised for the payment
of dividends (21 093) (64 362)
Change in cash and cash equivalents 59 871 8 831
Cash and cash equivalents at
beginning of year (4 840) (13 671)
Cash and cash equivalents at
end of year 55 031 (4 840)
* Financing activities comprise movements in long-term debt and
portfolio finance.
CONSOLIDATED SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2015
31 Dec 31 Dec
2015 2014
Audited Audited
R’000 R’000
Gross income from operations
and investments 590 256 246 857
Dividends received 91 585 47 114
Interest received 5 062 5 425
Income on financial instruments
and shares 57 312 17 972
Fees and sundry income 2 920 2 461
Fair value adjustments to
investments 433 377 173 885
Direct transactional costs (525) (1 066)
Impairments 17 35
Interest paid (7 445) (7 328)
Net income before expenses 582 303 238 498
Less: Expenditure (43 689) (31 732)
Operating costs (43 392) (31 453)
Depreciation (297) (279)
Net income before taxation 538 614 206 766
Taxation – deferred (78 697) (2 160)
Net income for the year attributable
to equity shareholders 459 917 204 606
Translation of foreign subsidiary *1 35 079 9 211
Total comprehensive income
attributable to equity shareholders 494 996 213 817
Earnings per share – cents 1 003,9 445,0
Dividends per share (proposed after
interim/year-end) – cents 50,0 43,0
Special dividends per share – cents – 100,0
Weighted average number of shares
in issue – 000’s 45 815 45 975
Headline earnings per share – cents *2 1 003,9 444,7
Reconciliation of headline earnings
Net income for the year 459 917 204 606
Profit on sale of property, plant
and equipment – (170)
Headline earnings for the year 459 917 204 436
*1 This item may subsequently be classified to profit and loss.
*2 There are no diluting instruments.
CONSOLIDATED SUMMARISED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
Non-
distri- Distri-
Share Share butable butable
capital premium reserves reserves Total
R’000 R’000 R’000 R’000 R’000
Balance as at
1 January 2014 856 47 140 26 187 1 010 828 1 085 011
Total
comprehensive
income for
the year – – 9 211 204 606 213 817
Loss in share
trust – – (1) – (1)
Shares held in
treasury –
written back 8 3 411 – – 3 419
Shares held in
treasury –
cancelled (8) (4 771) – – (4 779)
Shares held in
share trust –
written back 3 2 778 – – 2 781
Shares held in
share trust –
cancelled (3) (2 810) – – (2 813)
Dividends paid – – – (64 362) (64 362)
Balance as at
31 December 2014 856 45 748 35 397 1 151 072 1 233 073
Total comprehensive
income for
the year – – 35 079 459 917 494 996
Loss in share trust – – (1) – (1)
Shares held in
treasury – (5 593) – – (5 593)
Dividends paid – – – (21 093) (21 093)
Balance as at
31 December 2015 856 40 155 70 475 1 589 896 1 701 382
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 113 000
Year 2 R480 000
INVESTMENT HOLDINGS
as at 31 December 2015
Economic Fair
interest value
% R’000
Unlisted investments
Masimong Chemicals (Pty) Ltd *1 –
SA Bias Industries (Pty) Ltd *2 58,2
Sunspray Food Ingredients (Pty) Ltd *3 22,0
1 297 894
*1 Participating preference shares
linked to the performance of 15m
shares in Rolfes Holdings Limited
*2 Voting interest 49%
*3 Held through Famdeem Investments
(Pty) Ltd
Listed investments Ordinary shares
Brait S.E. 758 477 126 620
Metrofile Holdings Limited 20 000 000 93 000
Rolfes Holdings Limited 3 000 000 9 210
Torre Industries Limited 61 019 995 244 080
Transaction Capital Limited 10 000 000 123 900
596 810
Long-term investment holdings 1 894 704
Offshore investment holdings 140 077
Share portfolio –
Bond portfolio 26 452
Cash portfolio 66 954
Corero Network Security Plc 13 120 000 46 671
TOTAL HOLDINGS 2 034 781
COMMENTARY
PROFILE
Sabvest is an investment group which has been listed on the JSE
since 1988. Its ordinary and “N” ordinary shares are quoted in
the Equity Investment Instruments sector.
Sabvest has significant interests in two unlisted industrial
groups and one unlisted investment group, long-term holdings in
six listed investments, and offshore share, bond and cash
portfolios, all accounted for on a fair value basis. In addition,
Sabvest makes finance advances, participates in debt instrument
portfolios and undertakes other fee and profit earning activities
from time to time.
CHANGES IN INVESTMENT HOLDINGS
During the year Sabvest:
– sold 200 000 shares in Datatec Limited realising R13,3m;
– sold its 49,9% interest in Set Point Group (Pty) Ltd (“Set
Point”) to Torre Industries Limited (“Torre”) in exchange for
37m Torre shares which had a fair value of R159m at the
transaction date, and which resulted in a gain on the sale of
R36,3m relative to the carrying value at 31 December 2014;
– purchased a further 1,027m Torre shares for R4,6m thereby
increasing its holding to 61m shares which represents a 12%
interest in Torre;
– reduced its holding in the business of Sunspray Food
Ingredients (Pty) Ltd from 48% to 22% in a new structure in
which Shalamuka Capital, RMB Corvest and management are co-
invested with Sabvest and which reduction of interest resulted
in a net amount of R48,5m being received by Sabvest;
– purchased a further 7m shares in Transaction Capital Limited
for R70,0m, thereby increasing its holding to 10m shares;
– purchased 8 413 Sabvest ordinary shares and 202 897 Sabvest
“N” ordinary shares for R5,6m and which are presently held as
treasury shares in a subsidiary;
– purchased and sold 60 000 shares in Greenyard Foods NV for
approximately $1m (R16m);
– purchased an additional 4,8m shares in Corero Network Security
Plc for £480 000 (R11,0m), thereby increasing its holding to
13,12m shares which represent a 7,8% interest in Corero;
– purchased participating preference shares of R45m in Masimong
Chemicals (Pty) Ltd, the value of which is directly linked to
the performance of 15m shares in Rolfes Holdings Limited in
which Masimong Chemicals holds a 33% equity interest;
– purchased 3m shares in Rolfes Holdings Limited directly for
R9,2m; and
– sold its entire offshore share portfolio, other than the
investment in Corero, for R131m.
On 31 July 2015, the top-up and claw-back rights and obligation
between Torre, Sabvest and other parties arising from the Set
Point transaction were cancelled to facilitate the early
integration of Set Point into Torre; and
On 31 December 2015 Sabvest’s largest investee company, SA Bias
Industries (Pty) Limited, acquired 40% of Flowmax Holdings
Limited, thereby increasing its interest to 100%, for a
provisional amount of GBP9,8m (R222,6m) subject to profit
performance and payment over three years.
Subsequent to the reporting date Sabvest:
– has purchased 500 000 shares in Datatec Limited for R21,7m;
– has contracted to purchase R22,5m additional participating
preference shares in Masimong Chemicals (Pty) Ltd, the value
of which is directly linked to the performance of 7,5m shares
in Rolfes Holdings Limited; and
– has increased its offshore bond portfolio by $6,6m (R105,6m)
to $8,3m (R132,8m).
FINANCIAL RESULTS
Sabvest achieved record results for the year.
Headline earnings per share increased by 125,7% to 1 004 cents
per share. The growth arose from the gain on the sale of Set
Point, the strong share price increases of Brait, Transaction
Capital and Corero Network Security, satisfactory returns on the
offshore portfolios and a satisfactory performance by SA Bias
Industries. The gains in Brait, Corero and SA Bias were enhanced
by the weak rand against the US dollar.
NAV per share increased by 38,6% to 3 719 cents per share.
DPS for the year increased by 16,3% to 50 cents per share.
PAT increased by 125% to R460m.
Shareholders’ funds increased by 37,9% to R1,7bn.
LISTED INVESTMENTS
– Brait’s share price increased materially pursuant to its
realisation of its interest in Pepkor, new investments in
Virgin Active and New Look and the sale of its consideration
shares in Steinhoff.
– Metrofile produced its usual steady growth in earnings but its
share price was weak in the period.
– Torre’s share price strengthened during the year as it
implemented its strategies for the growth of its industrial
footprint in RSA and Africa. This was given impetus by its
acquisitions of Elephant Lifting and Set Point Group and its
raising of additional capital through placements with Safika
and Mineworkers Investment Company.
– Transaction Capital continues to trade very satisfactorily
since its reorganisation at the end of 2013. It produced good
growth for the year with the share price strengthening in
response.
– Rolfes Holdings Limited is a new addition to the portfolio
directly and indirectly through Masimong Chemicals preference
shares. The Rolfes share price has been steady since the date
of purchase.
– The group’s offshore share and bond portfolio performed
satisfactorily in difficult market conditions with US dollar
returns of 2,0% for the year excluding Corero and 6,70% for
the year including Corero. The group disposed of its entire
general equity portfolio before the year end. The bond
portfolio is listed on Sabvest’s website.
Unlisted industrial investments
– SA Bias Industries’ results for the year showed satisfactory
growth, assisted by conversion to rands at the weaker exchange
rates applicable during the year. At the year-end it concluded
a transaction to increase its interest in the UK based Flowmax
Group to 100%.
– Sunspray traded well with profitability ahead of budget.
Unlisted investments continue to be valued using the maintainable
earnings model (NOPAT) adjusted for net cash/debt. The earnings
multiples utilised were unchanged from prior periods.
DEFERRED TAXATION
During the year, the level of unrealised fair value adjustments
in certain of the group’s subsidiaries exceeded the assessed
losses in those subsidiaries for the first time. Deferred
taxation on increases in unrealised gains in those subsidiaries
is accordingly now being raised.
SUBSEQUENT EVENTS
There were no subsequent events.
DIVIDENDS
Dividends are determined relative to Sabvest’s own cash flows
from investments and services and capital receipts that are not
earmarked for new transactions. Dividends are considered twice
annually. The dividend for the year has been increased by 16,3%
to 50 cents per share (2014: 43 cents per share).
Shareholders are referred to the final cash dividend declaration
included in this report.
RELATED PARTIES
Related party transactions exist between subsidiaries and the
holding company, fellow subsidiaries and investee companies, and
comprise fees, dividends and income.
Transactions with directors relate to fees and monies lent to the
group by individuals and companies controlled by the directors.
ACCOUNTING POLICIES
The audited consolidated summarised financial statements have
been prepared in accordance with the framework concepts and the
recognition and measurement criteria of International Financial
Reporting Standards (IFRS) and comply with the minimum disclosure
requirements of International Accounting Standard 34: Interim
Financial Reporting as issued by the International Accounting
Standards Board (IASB), the SAICA Financial Reporting Guides
issued by the Accounting Practices Committee and Financial
Pronouncements issued by the Financial Reporting Standards
Council, the JSE Listings Requirements and the requirements of
the Companies Act of South Africa.
They have been prepared on the historical cost basis except for
financial instruments and investments which are measured at fair
value. The significant accounting policies and methods of
computation are consistent in all material aspects to those
applied in the previous financial year. The significant
accounting policies are available for inspection at the group’s
registered office. There has been no material change in judgments
or estimates of the amounts reported in prior reporting periods.
The preparation of these summary consolidated financial
statements was supervised by the Chief Financial Officer, R
Pleaner CA(SA).
This announcement does not include the information required
pursuant to paragraph 16A(j) of IAS 34. The full annual financial
statements of the company, set out these disclosures and are
available at the issuer’s registered offices and upon request and
will be available on the company’s website in due course once the
integrated annual report is finalised.
AUDIT OPINION
The auditors, Deloitte & Touche, have issued an unmodified audit
opinion on the consolidated annual financial statements for the
year ended 31 December 2015. Their audit was conducted in
accordance with the International Standards of Auditing. The
audited preliminary consolidated summarised results presented
have been derived from the audited consolidated financial
statements for the year ended 31 December 2015. The auditors,
Deloitte & Touche, have issued an unmodified opinion on the
prelimninary consolidated summarised financial information. The
auditors’ report does not necessarily cover all of the
information contained in this announcement. Shareholders are
therefore advised that in order to obtain a full understanding of
the nature of the auditors’ work they should obtain a copy of
that report with the accompanying financial information from the
registered office of the company. A copy of the audit report on
the full consolidated financial statements and report on this
preliminary consolidated summarised financial information are
available for inspection at the company’s registered office.
Any reference to future financial information included in the
announcement has not been reviewed or reported on by the
company’s auditors.
DIRECTORATE
There were no changes during the period.
KING III COMPLIANCE
Sabvest’s compliance report has been updated on the Sabvest
website.
PROSPECTS
The group’s unlisted industrial investees are budgeting for
improved profitability in 2016 but this may be affected by any
strengthening of the rand and weaker trading conditions.
The group’s listed investee companies are performing to
expectation in a difficult trading environment. Share prices have
weakened in the first two months of the year and future movements
in share prices are obviously uncertain.
It is not possible to comment on overall expected 2016
performance at this stage due to the likely effects on fair
values of reduced listed share prices and of the strengthening
rand on foreign currency earnings and valuations.
For and on behalf of the Board
Philip Coutts-Trotter Christopher Seabrooke
Chairman CEO
Raymond Pleaner
CFO
Sandton
26 February 2016
CASH DIVIDEND DECLARATION
Notice is hereby given that a final gross dividend of 29 cents
(2014: 25 cents) per ordinary share and “N” ordinary share, out
of income reserves, for the twelve months ended 31 December 2015
has been declared.
The issued share capital at the declaration date is 17 076 804
ordinary and 28 883 000 “N” ordinary shares. The income tax
number of the company is 9375/105/716.
Withholding tax on dividends at a rate of 15% will be deducted
for all shareholders who are not exempt in terms of the
legislation. This will result in a final net cash dividend of
24,65 cents per ordinary and “N” ordinary share to non-exempt
shareholders.
Last date to trade “CUM” dividend Wednesday, 16 March 2016
Trading “EX” dividend commences Thursday, 17 March 2016
Record date Thursday, 24 March 2016
Dividend payment date Tuesday, 29 March 2016
No dematerialisation or rematerialisation of share certificates
will be allowed during the period Thursday, 17 March 2016 to
Thursday, 24 March 2016, 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) Ltd,
70 Marshall Street, Marshalltown 2001
(PO Box 61051, Marshalltown 2107)
Directors: P Coutts-Trotter (Chairman), DNM Mokhobo# (Deputy
Chairman), CS Seabrooke* (Chief Executive), CP Coutts-Trotter,
NSH Hughes# (Lead Independent Director), R Pleaner*, BJT Shongwe#
*Executive #Independent
Sponsor: Rand Merchant Bank (A division of FirstRand Bank
Limited)
www.sabvest.com
Date: 26/02/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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