|
FPF
FPF
FPF - Finbond - Reviewed Interim Results For The Six Months Ended
31 August 2007
Finbond Property Finance Limited
(Previously Quantum Leap Investments 527 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FPF & ISIN: ZAE000097259
("Finbond" or "the Company")
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007
INCOME STATEMENT
R000
Actual
Six Six
Months Months
to to
31-Aug 31-Aug
2007 2006
Reviewed Unaudited
Revenue
Fees received 15683 4678
Commission received 28402 1074
(net)
Interest received
On trade 17743 0
receivables
Other 1808 203
Other income 381 2
Total revenue 64017 5957
Finance charges 1343 93
Charge for bad and 250 0
doubtful debts
Risk - adjusted income 62424 5864
Operating costs 19021 3292
Net income before 43403 2572
taxation
Direct taxation: SA 12345 758
Normal
Attributable earnings 31058 1814
Per share statistics
Attributable earnings per 13.51 0.8
share (cents)
Weighted attributable 15.97 0.9
earnings per share (cents)
Fully diluted attributable 12.40 0.7
earnings per share (cents)
Number of shares in 229,802,000 229,802,000
issue
Weighted number of shares Note 1 194,475,913 194,475,913
in issue
Diluted pro forma number Note 2 250,387,024 250,387,024
of shares
Reconciliation of
headline earnings per
share
Profit attributable to 31058
ordinary shareholders
Adjusted for loss on disposal of
property, plant and
equipment 306
Headline earnings attributable to 31364
ordinary shareholders
Per share statistics on
headline earnings
Headline earnings per 13.65 0.8
share (cents)
Weighted headline 16.13 0.9
earnings per share
(cents)
Fully diluted headline 12.53 0.7
earnings per share
(cents)
Notes:
1. The reviewed weighted pro forma number of shares is also used for the
August 2006 figures to reflect a more meaningful comparison. It takes
into account the effect of the 65 000 000 ordinary shares issued during
the private placement in June 2007.
2. The reviewed diluted pro forma number of shares is also used for the
August 2006 figures to reflect a more meaningful comparison. It takes
into account the effect of the ordinary shares that will be issued as
further purchase consideration for the acquisition of the subsidiaries if
profit warranties are met at 28 February 2007
BALANCE SHEET
31-Aug 28-Feb
R000 2007 2007
Reviewed Audited
ASSETS
Non current assets
Property and equipment 4757 533
Investment property 3200 3200
Net advances 18426 5048
Intangible assets 89660 0
Deferred tax 966 0
Current assets
Trade and other 88650 6393
receivables
Cash and cash equivalents 55592 1101
Total assets 261251 16275
EQUITY AND LIABILITIES
Equity attributable to equity
holders of parent
Share capital and premium 142472 1
Retained income 40777 9719
Total 183249 9720
Minority interest 3319 0
Total equity 186568 9720
Liabilities
Non current liabilities 26284 1840
Deferred income tax 237 237
liability
Borrowings 26047 1603
Current liabilities 48399 4715
Trade and other 33817 709
liabilities
Borrowings 588 58
Current income tax 13994 1342
liabilities
Shareholders for dividend 0 2606
Total equity and 261251 16275
liabilities
CASH FLOW STATEMENT
Six
Months
Reviewed to
6 months 31-Aug
to 31 2006
Aug
2007 Unaudited
R000
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts from 76966 8423
customers
Cash paid to suppliers and 58433 4600
employees
Cash generated from 18533 3823
operations
Interest received 2000 203
Interest paid -1344 -95
Taxation paid -7373 -1078
Net cash generated from 11816 2853
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of businesses -113929 0
Acquisition of property and -948 -18
equipment
Proceeds on disposals of 1054 0
property and equipment
Movement in other financial 20884 0
assets
Net cash used in investing -92939 -18
activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from share 142471 0
issue
Movement in other financial -4146 -143
liabilities
Dividends paid -2711 0
Net cash used in financing 135614 -143
activities
NET INCREASE IN CASH AND 54491 2692
CASH EQUIVALENTS
Cash and cash equivalents 1101 4480
at beginning of year
Cash and cash equivalents 55592 7172
at end of year
STATEMENT OF CHANGES IN EQUITY
Attributable to the
equity holders of the
Group
R000
Share Share Retained Minority
capital premium earnings interest Total
Balance at 1 1 0 9719 9720
March 2007
Proceeds on 146250 146250
share issue
Share issue -3779 -3779
expenses
Attributable 31058 31058
earnings for the
period
Business 3319 3319
combinations
Balance at 31 1 142471 40777 3319 186568
August 2007
COMMENTS
INTRODUCTION
The directors are pleased to present the maiden interim financial results of
the Finbond Property Finance Group for the six months ended on 31 August 2007.
During the six months under review Finbond showed excellent growth, despite
challenging market conditions that were brought about by the implementation of
the National Credit Act and various increases in the interest rate and further
positioned itself in the mortgage origination and non bank term lending
markets to ensure continued growth. This process resulted in a number of
achievements and significant developments
Finbond:
- Achieved growth in headline earnings per share of 1629 % from 0,8c to
13,65c compared with actual results for the six months ended August 2006;
- Achieved return on equity of 34.30% on an annualized basis;
- Increased Net asset value with 1819% compared with actual audited results
of 28 February 2007;
- Increased monthly mortgage originating volumes to R 1 600 000 000 (one
billion six hundred million rand) by acquiring 100% of the shares in the
Excel Group , founded and managed by the former CEO of Nedbank`s Home
Loan division Mr. Jack Trevena;
- Established itself as the 4th largest mortgage originator in South-Africa
with annual origination volumes of R19 000 000 000 (nineteen billion
rand);
- Increased its already significant national distribution channel
consisting of 25 branches, 75 independent business units, 80 agencies and
475 brokers with a further 57 branches, 103 associates and 400 broker
consultants;
- Expanded its national branch network in the black mass term loan market
with 57 branches through the acquisition of the Blue Chip Finance Group;
- Further strengthened its strategic alliance with Bond Choice and the four
major banks.
MARKET CONDITIONS AND NATIONAL CREDIT ACT
Changes in the regulatory environment and the rising interest rate environment
represented threats and opportunities during the six months under review.
Mortgage Origination
In August and October 2007 the Reserve Bank`s MPC increased interest rates
with a further 50 basis points bringing total interest rate increases over the
last 12 Months to 350 basis points.
Data released by the South African Reserve Bank showed growth of 26,4% year-on-
year was recorded in mortgage advances by the monetary sector in August 2007
(26,7% in July 2007). This brought the total amount of Mortgage Advances to R
793,1 billion in August. On a month-on-month basis, mortgage advances growth
was unchanged at 2,3% in August from July. The amount of mortgage advances
increased by R17,7 billion in August 2007.
According to ABSA Senior Economist Jaques du Toit the declining trend in year
on year growth in mortgage advances since peaking at 30,9% in October last
year, could be ascribed to the lagged effect of higher interest rates since
mid 2006. The recent implementation of the National Credit Act is also having
a dampening effect on domestic credit extension, including mortgage advances.
Mortgage advances growth is expected to continue declining gradually towards
the end of the year.
In the first seven months of 2007 nominal year-on-year house price growth
averaged 15.4%, but is expected to slow further in the remaining months of
2007 to average around 14% for the full year.
Term Lending
The implementation of the National Credit Act ("NCA") has provided the mass
term lending market with greater regulatory certainty. The NCA imposes certain
lower interest rates on term loans, but allows certain additional fees.
The NCA should force lenders, through its fixed fee structures, to lower
interest rates and to move from larger longer-term loans to smaller loans over
shorter repayment periods.
The implementation by Finbond of revised systems and procedures, resulting
from the requirements of the Credit Act, have been completed.
Legislative procedural prescription, fee and interest rate controls and
Industry pressures to formalise the mass term lending market, primarily
through regulation of operators, will force smaller less sophisticated
players out of the market. This together with high levels of fragmentation in
the industry will precipitate industry consolidation. This will present
further opportunities for Finbond to grow its business through strategic
acquisitions.
EXECUTIVE OVERVIEW
General Overview
Finbond`s strong operational performance continued during the six months under
review, the result of sustained progress in the execution of the Group`s
strategy. We successfully delivered on our primary objective to grow earnings
and to maximize shareholder value. Headline Earnings per share increased 1628%
from 0.8 to 13.65 compared with August 2006 actual results (that excludes the
four acquisitions made with effect 1 March 2007)
Finbond`s maiden results were achieved during a challenging period that was
brought about by the implementation of the National Credit Act and various
increases in the interest rate. Due to the timeous positioning of the Group,
profits were not adversely affected by the rising interest rate and regulation
of the market. The company`s positioning with Bond Choice , the four major
banks , the National Council of Trade Unions, product design, matching
funding, cost containment, significant national distribution channels and very
strong organic growth in it`s various operating subsidiaries ensured that the
Group achieved strong growth in earnings for the six months under review.
Each of the operating companies i.e. Finbond Property Finance Ltd, Independent
Bond Originators (Pty) Ltd, Dimension Financial Services (Pty) Ltd ;
Bondmaster (Pty) Ltd and Blue Dot Finance (Pty) Ltd, continued to trade
strongly in the six months, with the overall percentage increase attributable
income exceeding the percentage increase recorded in the previous six months.
The driving factor was inter alia an increase in the number of clients being
serviced, gaining market share as a result of legislation and smaller players
leaving the market as well as the introduction of new products.
Prospects
The success of Finbond`s strategic direction and the efforts of its
management, staff and intermediaries are evident in continued strong financial
performance during the six months ending 31 August 2007.
The challenges, in a volatile and rising interest rate environment, are
enormous but exciting. We believe that the rapid expansion into the Term
Lending market in the implementation of our strategic action plan will ensure
that we achieve our projected results and yield dividends in the short, medium
and long term. Industry pressures to formalise the mortgage originating and
term lending markets, primarily through licensing and regulation of operators,
will force smaller less sophisticated players out. This together with high
levels of fragmentation in the industry will precipitate industry
consolidation. This will present further opportunities for Finbond to grow its
business through strategic acquisitions and achieve its vision of becoming the
national non-bank lender and mortgage originator of choice.
Market conditions in general, and in particular rising interest rates could
have an impact on our ability to repeat the performance of the first six
months during the second half of the year. We are positive about our prospects
for the future and continue to implement our investment and expansion plans
for the 2007/8 financial year.
COMMENTARY
Financial results
The actual results for the six months to 31 August 2007 have been reviewed by
the auditors PKF (whose report is available for inspection at the company`s
offices) and represents the results for the group. The actual results for the
six months to 31 August 2006 are the results for Finbond Property Finance
Limited (that excludes the four acquisitions made with effect 1 March 2007).
At the half way stage the profit of the group is 18,1% ahead of its
projections to achieve an after tax profit of R58,8million for the full year
as set out at the time of listing.
Investment in Growth
The growth experienced over the past six months is the result of a significant
increase in investment and infrastructure. Since February 2007 Finbond made
the following acquisitions:
- 100% of Independent Bond Originators (Pty) Ltd for a total purchase
consideration of R 60 000 000;
- 100% of the shares in Dimension Financial Services (Pty) Ltd for a total
purchase consideration of
- R 31 200 000;
- 100% of the shares in Bondmaster (Pty) Ltd for a total purchase
consideration of R 80 000 000;
- 100% of the shares in Blue Dot Finance (Pty) Ltd for a total purchase
consideration of R 30 000 000;
- 100% of the Shares in the Excel Group (Pty) Ltd for a total purchase
consideration of R53 534 000;
- 50% of Blue Chip Finance (National) for a total purchase consideration of
R 36 750 000; and
- 100% of the shares in Blue Chip Finance (Western Cape) for a total
purchase consideration of R 42 500 000.
Basis of preparation
The interim results have been prepared in accordance with IAS34 and
International Financial Reporting Standards and the Companies Act, 1973. The
accounting policies applied by the various companies in the group are
consistent with those used in their prior financial periods.
Dividend
No interim dividend has been declared.
For and on behalf of the Board
Dr. Malesela Motlatla Dr. Willie van Aardt
18 October 2007
Directors
Chairman: Dr. MDC Motlatla*( BA , D Com HC (Unisa)); Chief Executive Officer
: Dr. W van Aardt ( B- Proc (Cum Laude) , LLM (UP) , LLD (PU CHE) Admitted
Attorney of The High Court of South Africa, QLTT (England and Wales UK) ; H J
Wilken ( BCom Honss ( UNISA); Financial Director: DC Pentz (B Comm Honns , CA
SA); N Mapetla*.( BA (Lesotho) MBA( UK); Adv. J Noeth SC* ( B Iuris LLB). *
Non- Executive
Transfer secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street
Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Finbond property Finance Limited
Finbond Property Finance Limited
(Registration Number: 2001/015761/06) TA Finbond Property Finance TM
107 Nicholsosn Street , Brooklyn, Pretoria
PO Box 2127 Brooklyn Square, 0075
www.finbondlimited.co.za
Date: 18/10/2007 16:10:39 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.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
