Wrap Text
Unaudited results for the six months ended 30 September 2017, subsequent restructure and directorate changes
Sandown Capital Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/013674/06)
Share code: SDC ISIN: ZAE000249645
("Sandown" or "the Company")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017,
SUBSEQUENT RESTRUCTURE AND DIRECTORATE CHANGES
- Peregrine Group restructure implemented on 2 October 2017
- Joint-listing on the JSE and A2X on 29 November 2017
- Sandown shares to be unbundled to Peregrine Holdings Limited's ("Peregrine") shareholders on 4 December 2017
COMMENTARY
These results for the six-month period ended 30 September 2017 reflect the financial results of the Company prior to the
restructure set out below. Shareholders are accordingly referred to the pre-listing statement issued by the Company on Tuesday,
14 November 2017, which is available on the Company's website at www.sandowncapital.com, which sets out the post-
restructure position of the Company, together with pro forma financial information related thereto and an updated
NAV Statement.
Issued share capital
Shares in issue amount to 226.066 million.
Prior to the restructure, the Company had 2 000 shares in issue. As part of the restructure, an additional 226 063 696 ordinary
shares were issued, made up as:
- 161 182 841 shares, which were issued to Peregrine on 29 September 2017; and
- 64 880 855 shares, which were issued to Peregrine on 2 October 2017.
Restructure transactions and unbundling
In terms of the restructure, all surplus non-operating net assets held by Peregrine (i.e. excess cash, investment in hedge funds
and other proprietary investments), were transferred to Sandown, a wholly-owned subsidiary of Peregrine, with effect from
2 October 2017.
Having obtained the necessary regulatory approvals, the restructure and subsequent unbundling resulted in Sandown being
separately listed on the JSE on Wednesday, 29 November 2017, with the shares in Sandown being unbundled to Peregrine
shareholders on Monday, 4 December 2017.
The pre-listing statement of Sandown was released on SENS on Tuesday, 14 November 2017.
Directorate
Mandy Yachad, previously a non-executive director, stepped down on 29 November 2017 following the successful transition
of the Company from a wholly-owned subsidiary of Peregrine, culminating in its listing on the JSE on Wednesday, 29 November 2017.
The Board would like to express its appreciation to Mandy for his stewardship of the Company over the past many years
and in particular his management of the Peregrine restructure process.
With effect from 29 November 2017, Cindy Hess (41) has been appointed as an independent non-executive director. Cindy
is a Chartered Accountant and was previously CFO of Media 24 Holdings Proprietary Limited, Pioneer Food Group Limited
and Sea Harvest Holdings Proprietary Limited. Cindy has been appointed Chair of the Social & Ethics Committee, and a
member of the Audit and Remuneration & Nominations Committees.
With the appointment of an additional independent non-executive, Lawrie Brozin, the Chairman of the Board, will step down
as a member of the Audit Committee.
Conclusion
Following the restructure outlined above, Sandown will provide shareholders with access to a portfolio of high-quality, sector
and geographically diversified investments designed to produce superior returns over the long-term. The mix of listed and
unlisted investments, together with the ability to utilise debt and equity capital where appropriate, and a focus on NAV per
share growth, is designed to build shareholders value.
Sean Melnick Sean Jelley Lawrie Brozin
Chief Executive Chief Financial Officer Non-Executive Chairman
Sandton
29 November 2017
Directors: LZ Brozin* (Chairman); SA Melnick (CEO); SK Jelley (CFO); DJ Randall*; AJ Hannington*; CJ Hess*
(*Independent non-executive)
Company secretary and registered office: CIS Company Secretaries Proprietary Limited, 6A Sandown Valley Crescent, Sandown,
Sandton, 2196 (PO Box 650361, Benmore, 2010), Telephone: +27 11 722 7400
Transfer Secretaries: Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196,
(PO Box 61051, Marshalltown, 2107)
Sponsor: Java Capital
Further detail and a print-friendly version of these results will be available on Sandown's website on http://www.sandowncapital.com
from Thursday, 30 November 2017.
Condensed Statement of Financial Position as at 30 September 2017
Unaudited as at Audited as at
30 September 31 March
2017 2017
ZAR ZAR
ASSETS
Non current assets
Financial investments - 2 345 726
Current assets 180 418 319 176 445 706
Financial investments 173 504 396 169 048 238
Loan to affiliated company 674 642 564 208
Trade and other receivables 223 794 218 390
Taxation 4 442 560 6 172 307
Cash and cash equivalents 1 572 927 442 563
Total assets 180 418 319 178 791 432
EQUITY AND LIABILITIES
Equity 172 748 066 164 868 123
Share Capital 127 373 677 127 373 577
Accumulated profits 45 374 389 37 494 546
Non current liabilities
Deferred taxation 5 602 808 1 386 460
Current liabilities 2 067 445 12 536 849
Loan from affiliated company 1 788 517 9 234 339
Trade and other payables 278 928 3 302 510
Total Equity and Liabilities 180 418 319 178 791 432
Condensed Statement of Comprehensive Income for the six months ended 30 September 2017
Unaudited for Unaudited for
the six months the six months
ended ended
30 September 30 September
2017 2016
ZAR ZAR
Revenue: Investment income 18 219 114 20 688 585
Total revenue 18 219 114 20 688 585
Operating expenses (1 339 121) 306 631
Profit from operations 16 879 993 20 995 216
Net interest received 40 948 193 085
- Interest received 40 948 193 085
- Interest paid - -
Profit before taxation 16 920 941 21 188 301
Taxation (5 946 095) (4 610 877)
Profit & total comprehensive income for the period 10 974 846 16 577 424
Basic and diluted earnings per share
Earnings 10 974 846 16 577 424
Number of shares in issue at reporting date* 161 184 841 2 000
Weighted average number of shares in issue 161 184 841 161 184 841
Basic and diluted earnings per share (cents) 6,81 10,28
* 161 182 841 shares were issued to the Peregrine Group on 29 September 2017 for
nominal consideration
Headline earnings per share
Earnings 10 974 846 16 577 424
Adjustment for headline earnings - -
Headline earnings 10 974 846 16 577 424
Basic & Headline earnings per share (cents) 6,81 10,28
Net Asset value per share (cents) 107,17 102,29
Tangible Net Asset value per share (cents) 107,17 102,29
Dividend per share (cents) 1,55 8,07
Condensed Statement of Changes in Equity for the six months ended 30 September 2017
Accumulated
ZAR Share capital Profits Total Equity
Balance as at 31 March 2016 127 373 577 30 696 227 158 069 804
Total comprehensive income for the period - 16 577 424 16 577 424
Transaction with owners recorded directly in equity - (13 000 000) (13 000 000)
- Dividends paid - (13 000 000) (13 000 000)
Balance as at 30 September 2016 127 373 577 21 273 651 148 647 228
Total comprehensive income for the period - 3 220 895 3 220 895
Balance as at 31 March 2017 127 373 577 37 494 546 164 868 123
Total comprehensive income for the period - 10 974 846 10 974 846
Transaction with owners recorded directly in equity 100 (3 095 003) (3 094 903)
- Transfer of Peregrine treasury shares - (595 003) (595 003)
- Subscription for shares 100 - 100
- Dividends paid - (2 500 000) (2 500 000)
Balance as at 30 September 2017 127 373 677 45 374 389 172 748 066
Condensed Statement of Cash Flows for the six months ended 30 September 2017
Unaudited for Unaudited for
the six months the six months
ended ended
30 September 30 September
2017 2016
ZAR ZAR
Cash flow from operating activities (9 165 807) (15 033 848)
- Cash flow from operating activities (6 665 807) (2 033 848)
- Cash dividends paid (2 500 000) (13 000 000)
Cash flow from investing activities 17 852 327 (3 139 666)
Cash flow from financing activities (7 556 156) 14 705 982
Net increase (decrease) in cash and cash equivalents 1 130 364 (3 467 532)
Cash and cash equivalents at beginning of the period 442 563 4 292 962
Cash and cash equivalents at the end of the period 1 572 927 825 430
NOTES AND COMPLIANCE
The condensed unaudited interim financial statements of Sandown as at and for the six months ended 30 September 2017
comprise the company results for the period.
Basis of preparation
The condensed unaudited interim financial statements are prepared in accordance with the JSE Limited Listings Requirements
and the requirements of the Companies Act of South Africa. The Company has elected not to prepare consolidated financial
statements in accordance with the exemption in IFRS 10: Consolidated Financial Statements. The JSE Listings Requirements
require provisional reports to be prepared in accordance with the measurement and recognition requirements of the International
Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and to also, as
a minimum, contain the information required by IAS34: Interim Reporting.
The accounting policies applied in the preparation of the condensed financial statements are in terms of IFRS and are consistent
with those applied in the previous financial statements as at and for the year ended 31 March 2017. The items are presented
using the historical cost basis with the exception of financial assets designated as at fair value through profit or loss, which are
measured at fair value.
In preparing these condensed unaudited interim financial statements management made judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets and liabilities. Actual results may differ
from these estimates. The significant judgements made by management in applying the Company's accounting policies and the
key sources of estimation uncertainty were the same as those applied to the financial statements as at and for the year to
31 March 2017.
The Company's results are prepared under the supervision of S K Jelley CA (SA), the Chief Financial Officer.
These financial statements and any forward looking statements have not been reviewed or reported on by the Company's
auditors, Deloitte.
The prior year audited results are a summary of the financial statements as at and for the year ended 31 March 2017. A copy
of these financial statements was included in the Company's pre-listing statement released on 14 November 2017 and can be
obtained from Company's Registered Office.
Analysis of Assets and Liabilities by Financial Instrument Classification
Unaudited as at 30 September 2017 Financial Non-financial
ZAR instruments at instruments
fair value and financial
through profit Loans and Financial instruments
and loss receivables liabilities beyond the Fair value
designated at at amortised at amortised scope of Total of financial
inception cost cost IFRS 7 ZAR instrument
Current assets 173 504 396 2 471 363 - 4 442 560 180 418 319
Financial investments 173 504 396 - - - 173 504 396 173 504 396
Loan to affiliate company - 674 642 - - 674 642
Trade and other receivables - 223 794 - - 223 794
Taxation - - - 4 442 560 4 442 560
Cash and cash equivalents - 1 572 927 - - 1 572 927
-
Total assets 173 504 396 2 471 363 - 4 442 560 180 418 319
Non-current liabilities -
Deferred taxation - - - 5 602 808 5 602 808
Current liabilities - - 2 067 445 - 2 067 445
Loan from affiliate company - - 1 788 517 - 1 788 517
Trade and other payables - - 278 928 - 278 928
Total liabilities - - 2 067 445 5 602 808 7 670 253
Audited as at 31 March 2017 Financial Non-financial
ZAR instruments at instruments
fair value and financial
through profit Loans and Financial instruments
and loss receivables liabilities beyond the Fair value
designated at at amortised at amortised scope of Total of financial
inception cost cost IFRS 7 ZAR instrument
Non-current assets
Financial investments 2 345 726 - - - 2 345 726 2 345 726
Current assets 163 699 797 6 573 602 - 6 172 307 176 445 706
Financial investments 163 699 797 5 348 441 - - 169 048 238 163 699 797
Loan to affiliate company - 564 208 - - 564 208
Trade and other receivables - 218 390 - - 218 390
Taxation - - - 6 172 307 6 172 307
Cash and cash equivalents - 442 563 - - 442 563
-
Total assets 166 045 523 6 573 602 - 6 172 307 178 791 432
Non-current liabilities -
Deferred taxation - - - 1 386 460 1 386 460
Current liabilities - - 9 658 731 2 878 118 12 536 849
Loan from affiliate company - - 9 234 339 - 9 234 339
Trade and other payables - - 424 392 2 878 118 3 302 510
Total liabilities - - 9 658 731 4 264 578 13 923 309
Fair value information has not been provided for financial assets and financial liabilities not measured at fair value if the
carrying value is a reasonable approximation of fair value.
Fair Value Disclosures
The following table presents the company's financial instruments which are presented at fair value as at 30 September 2017:
ZAR ZAR ZAR
Financial assets at FV through profit or loss Level 1 Level 2 Total
Private equity investments - unlisted - 4 748 357 4 748 357
Private equity fund - 13 599 13 599
Hedge Fund investments - unlisted - 168 742 440 168 742 440
- 173 504 396 173 504 396
The following table presents the company's financial instruments which are presented at fair value as at 31 March 2017:
ZAR ZAR ZAR
Financial assets at FV through profit or loss Level 1 Level 2 Total
Private equity investments - listed 2 288 628 - 2 288 628
Private equity investments - unlisted - 100 100
Private equity fund - 56 998 56 998
Hedge Fund investments - unlisted - 163 699 797 163 699 797
2 288 628 163 756 895 166 045 523
Valuation techniques applied and inputs to recurring valuation techniques
Financial assets at fair
value through profit or Valuation technique used Significant observable Significant unobservable
loss to determine fair value inputs used in valuation inputs used in valuation
Private equity Quoted market prices Unadjusted quoted prices in N/A
investments - listed an active market of
underlying investments
Private equity Amortised cost of loans Market-related interest rate N/A
investments - unlisted receivable and independent
valuations and cost
Hedge fund Quoted market prices The fair value is Unobservable inputs are
Investments - unlisted determined by an mostly expense accruals of
independent administrator, the hedge fund entities that
based on the quoted market are deducted from the sum
prices of the underlying of the fair values of net
investments held by the investments held by the
hedge funds hedge funds
Hedge funds
A financial asset and a financial liability are offset and the net amount presented in the statement of financial position when
the Company has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously. The unlisted hedge fund investments were presented net of loans. The
investments made are on a geared basis with permissible loan ratios of up to 100%. The loan agreement against the investment
in the PNF Peregrine Fund states that the loan will be settled at the same time as a redemption out of the fund. The hedge fund
investments are measured at fair value and the loans are measured at amortised cost.
Financial assets subject to offsetting
Gross amounts
of recognised
financial Net amounts of
liabilities offset financial assets
Gross amounts in the statement presented in the
of recognised of financial statement of
ZAR financial assets position financial position
30 September 2017 243 763 211 75 020 771 168 742 440
30 March 2017 236 302 177 72 602 380 163 699 797
Related Party Balances and Transactions
Transactions with an affiliated company
During the period under review, the Company, in the ordinary course of business, entered into various transactions with a
fellow subsidiary company, Peregrine SA Holdings Proprietary Limited. The total value of these transactions charged for the
period was R227 573 (2016: Nil).
Private equity fund
The Company has a 50% interest in a partnership, Firefly Investments 61, which manages a fund that invests in private equity
opportunities. Mr S Melnick, Mr S Jelley and Mr M Yachad, directors of the company, have co-invested with the Company
into the fund, either directly or through an entity in which they have an indirect beneficial interest. The value of the loan
receivable from Firefly Investments 61 as at 30 September 2017 was R674 642 (31 March 2017: R564 208).
Hedge fund investments
The Company has invested in hedge funds managed by Peregrine Capital and Peregrine Fund Platform, which at the balance
sheet date are fellow subsidiaries of Sandown. The unlisted hedge funds are presented net of loans. The value of the net
investment in the funds managed by Peregrine Capital and the Peregrine Fund Platform as at 30 September 2017 was
R168 742 440 (31 March 2017: R236 302 380). There are loans outstanding against the fund managed by Peregrine Capital
as at 30 September 2017 amounting to R75 020 771 (31 March 2017: R72 602 380). The loan bears interest at the JSE Trustee
rate as published monthly by JSE Trustees Proprietary Limited, less 57 basis points. The interest paid for the six months ended
30 September 2017 was R2 418 390 (2016: R1 994 271).
Management services
The Company paid certain amounts to executive directors of Peregrine for managerial services. For the six months ended
30 September 2017, these fees amounted to R395 631 (2016: Nil).
Shareholder Loan
The Company had a loan outstanding to a fellow subsidiary as at 30 September 2017 of R1 788 517
(31 March 2017: R9 234 339). The loan is interest-free and has no fixed terms of repayment.
Transfer of Peregrine Treasury Shares
21 668 shares in Peregrine, previously held as treasury shares on behalf of the Peregrine Group, were transferred to a Peregrine
Group company during the period, for no consideration. This transfer was accounted for as an adjustment to equity.
Subsequent events
Restructure
With effect from 2 October 2017 Peregrine transferred to Sandown, a wholly-owned subsidiary of Peregrine at the reporting
date, all the attributable surplus balance sheet investments within the Peregrine Group. The effect of the restructure and
unbundling on the assets and liabilities as at the reporting date is presented below.
The fair values reflected below represent their carrying values as at 30 September 2017.
ZAR
Identifiable assets transferred in 1 202 484 375
Financial Investments 1 004 243 454
Trade and other receivables 27 674 921
Cash and cash equivalents 170 566 000
Identifiable liabilities transferred in (9 419 917)
Trade and other payables (9 419 917)
Net assets 1 193 064 458
Non-controlling interest (33 239 000)
Attributable net assets 1 159 825 458
Pursuant to the restructure, Sandown issued Peregrine an additional 64 880 855 ordinary shares, such that the total number
of shares in issue increased to 226 065 696. In addition, as part of the transfer of hedge fund assets, Peregrine provided
Sandown with a short-term loan facility of R134 321 000, which loan is repayable by 31 March 2018.
Having obtained the necessary regulatory approvals, Sandown was separately listed on the JSE on Wednesday,
29 November 2017, with the shares in Sandown being unbundled to Peregrine shareholders on Monday, 4 December 2017.
Please refer to the pre-listing statement issued by Sandown Capital on SENS on 14 November 2017 for additional information.
Sponsor: Java Capital
Date: 29/11/2017 10:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
