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SBL
SBL
SBL - Sable Holdings Limited - Abridged consolidated income statement
SABLE HOLDINGS LIMITED
(`Sable`)
(Registration No. 1968/010636/06)
(Incorporated in the Republic of South Africa)
Share code: SBL ISIN: ZAE00006383
Interim Report
The unaudited group results for the half-year ended 31 December 2007 are as
follows:
Abridged consolidated income statement
Six months Six months Year
ended ended ended
31 Dec 2007 31 Dec 2006 30 Jun 2007
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Revenue 26,673 25,066 52,260
Profit from operations 14,918 11,965 25,372
Profit on disposal of treasury
investments 630 154 685
Fair value gains on investments and
investment property 421 10,531 111,836
Profit before financing costs and
taxation 15,969 22,650 137,893
Income from subsidiaries and
associates 1,126 2,511 2,615
Net finance costs (18,020) (5,619) (15,291)
(Loss)/profit before taxation (925) 19,542 125,217
Taxation (112) (2,419) (38,939)
(Loss)/profit after taxation (1,037) 17,123 86,278
(Loss)/profit from associates (2,565) 23,497 34,866
Net (loss)/profit for the period (3,602) 40,620 121,144
Number of ordinary shares in issue
during the period excluding
treasury shares (`000) 7,378 7,378 7,378
(Loss)/earnings per ordinary share
(cents) (48.8) 550.6 1,642.0
Headline (loss)/earnings per
ordinary share (cents) (44.6) 153.0 293.6
Dividend per ordinary share (cents) - - 50.0
Reconciliation - headline (loss)/earnings and distributable (loss)/earnings
Net (loss)/profit for the period (3,602) 40,620 121,144
Adjustments:
Straight-line rental income accrual
- subsidiaries (413) (393) (1,567)
- associates - - 60
Impairment of investments (421) - 17,550
Revaluation of investment property
- subsidiaries - (9,004) (91,864)
- associates 1,149 (19,937) (23,663)
Headline (loss)/earnings for the
period (3,287) 11,286 21,660
Abridged consolidated balance sheet
Six months Six months Year
to to to
31 Dec 2007 31 Dec 2006 30 Jun 2007
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Assets
Non-current assets 618,816 363,694 596,905
Investment property 484,565 253,535 467,527
Vehicles, furniture and equipment 755 408 745
Investments - treasury 11,909 16,851 12,759
Investments - associates 119,412 90,685 113,789
Company held for resale 784 750 784
Deferred taxation asset 1,121 1,088 1,151
Loans receivable 270 377 150
Current assets 28,088 23,352 42,472
Trading property 17,549 6,306 18,739
Trade and other receivables 8,618 8,811 13,541
Cash and cash equivalents 1,921 8,235 10,192
Total assets 646,904 387,046 639,377
Equity and liabilities
Total equity attributable to
equity holders 288,332 222,698 295,623
Share capital and premium 16,430 16,430 16,430
Non-distributable reserves 77,017 71,640 79,582
Retained earnings 194,885 134,628 199,611
Total liabilities 358,572 164,348 343,754
Non-current liabilities 278,811 130,322 285,728
Interest-bearing borrowings 218,773 123,735 225,696
Deferred taxation liability 60,038 6,587 60,032
Current liabilities 79,761 34,026 58,026
Trade and other payables 11,034 4,850 10,173
Interest-bearing borrowings 61,001 22,798 40,095
Current portion of interest-
bearing borrowings 7,582 5,541 6,680
Taxation payable 75 778 1,029
Shareholders for dividends 69 59 49
Total equity and liabilities 646,904 387,046 639,377
Number of ordinary shares in issue
(`000) 8,170 8,420 8,170
Less: Treasury shares (`000) (792) (1,042) (792)
7,378 7,378 7,378
Net asset value per ordinary share
(cents) 3,908 3,018 4,007
Interest-bearing borrowings to
total equity (%) 99.7 68.3 92.2
Interest-bearing borrowings to
total assets (%) 44.4 39.3 42.6
Abridged consolidated cash flow statement
Six months Six months Year
ended ended ended
31 Dec 2007 31 Dec 2006 30 Jun 2007
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Cash inflow/(outflow) from
operating activities 2,031 6,506 (6,449)
Cash generated from operations 23,624 14,262 11,070
Net finance costs (18,020) (5,619) (15,291)
Dividends received 1,126 2,511 2,615
Dividend paid (3,669) (3,644) (3,680)
Taxation paid (1,030) (1,004) (1,163)
Cash outflow from investing
activities (25,067) (42,705) (148,417)
Cash (outflow)/inflow from
financing activities (6,141) 25,551 128,878
Net decrease in cash and
cash equivalents (29,177) (10,648) (25,988)
Cash and cash equivalents at the
beginning of the period (29,903) (3,915) (3,915)
Cash and cash equivalents at the
end of the period (59,080) (14,563) (29,903)
Abridged statement of changes in equity
Six months Six months Year
ended ended ended
31 Dec 2007 31 Dec 2006 30 Jun 2007
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Balance at beginning of the period 295,623 187,709 180,136
Net (loss)/profit for the period (3,602) 40,620 121,144
Repurchase of issued share capital - (1,967) (1,967)
Dividend paid (3,689) (3,664) (3,690)
Balance at end of the period 288,332 222,698 295,623
Comments
Basis of preparation and accounting policies
The unaudited group interim results, for the six months ended 31 December 2007,
have been prepared in accordance with IAS 34, Interim Financial Reporting, and
are covered by International Financial Reporting Standards ("IFRS"). The results
incorporate policies which are consistent with those applied in the previous
period.
Financial results
The group reported a net loss of R3.6 million (December 2006 - profit of R40.6
million) for the period ended 31 December 2007.Earnings per share decreased from
550.6 cents to a loss per share of 48.8 cents, with headline earnings per share
decreasing from 153.0 cents to a headline loss of 44.6 cents.
Revenue has increased to R26.7 million (December 2006 - R25.1 million) and is
represented as follows:
Dec 2007 Dec 2006 Jun 2007
R`000 R`000 R`000
Rentals received 23,569 13,958 34,442
Trading property 3,104 11,108 17,818
26,673 25,066 52,260
Rental revenue has increased by 68.9% largely due to the recent acquisition of
50% of a diversified property investment portfolio and sectional title
residential unit complex for resale, as more fully described in previous
circulars.
Operating profit has been materially affected by the slowing down of Sable`s
property trading division, due to higher interest rates, credit and electricity
constraints as well as substantial escalations in building costs. Included in
operating profit is an impairment of R0.9 million which relates to the fair
valuation of the domestic share portfolio at 31 December 2007.
The increase in net finance costs in respect of both long and short-term
interest-bearing borrowings reflected the significant increase of 2.50% in bank
lending rates since December 2006. Management has fixed 43.20% of total
interest-bearing borrowings at rates of between 9.66% and 12.66% for future
periods of between nine and forty-two months.
Associate losses of R2.6 million included a further deferred tax provision of
R1.1 million in respect of unrealised gains on investment property revaluations.
Cash flow statement results
Cash generated from operations has increased from R14.3 million to R23.6 million
in the comparative period. Investing outflows of R25.1 million comprised the
investment of funds into associated development land of
R8.2 million as well as mixed usage land for development of R17.0 million.
Financing activities comprised the repayment of long-term borrowings in the
amount of R6.0 million.
Treasury investments
The domestic share portfolio managed by BoE Securities (Pty) Ltd added realised
profits of R0.6 million, however the investment value was impaired by R0.9
million for fair valuation purposes. The portfolio was valued at R11.9 million
at 31 December 2007.
Property acquisitions and developments
During the first half of the year, Sable has proceeded with the upgrading of an
existing retail centre in Noordheuwel, Krugersdorp. The project value is R47.0
million and encompasses the addition of trading floor area for the existing
anchor tenant and the new anchor tenant, the addition of an upper floor office
space, a new restaurant wing and basement parking area. In addition, a R23.0
million industrial mini warehousing park comprising 7 147m2 of gross lettable
area in Laser Park, Honeydew, is under contract. Various strategic mixed usage
land acquisitions and final additions to Ferndale Village retail centre
comprised the increase in investment property of R17.0 million.
Associate investments
Associate investments of R8.2 million were made in commercial and industrial
land holdings in Germiston, Boksburg and Midrand, Gauteng, during the six months
ended 31 December 2007. Hazeldean Square, a 16 318m2 retail shopping centre of
which Sable indirectly owns 32.4%, commenced trading during September 2007. The
project cost was R153.5 million and will be accounted for at 30 June 2008 once a
formal valuation has been concluded.
The total investment in associates of R119.4 million comprises R51.0 million in
commercial and industrial land, R20.6 million in residential land for resale,
R6.7 million in commercial investment property and R41.1 million in residential
investment property. Associate earnings will be accounted for in the second six
months of the 2008 financial year due to the timing of development project
completion dates and consequently the transfer dates of property sales.
Prospects
Niche development in retirement village sectional title cluster units and
cheaper residential housing has been aggressively catered for in respect of
infrastructure and services to various sites in Hazeldean, Pretoria. These
developments have been very well received by the market and further phases are
currently underway.
A cautious approach to further traditional residential property development has
been adopted by Sable management in view of higher commercial interest rates and
the dampening effect of national credit regulations on consumer demand for
residential property.
Dividends
As is customary, no dividend has been declared for the six months ended 31
December 2007.
Statement on going concern
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future.
Dealings with Enterprise Risk Management Limited ("ERM")
As per a SENS announcement dated 23 January 2008, shareholders of both ERM and
Sable were advised that, due to the volatility in equity markets, ERM and Sable
had mutually agreed to terminate merger discussions.
For and on behalf of the board
PH Nash (Chairman)
GBJ Bowes (Managing director)
27 March 2008
Directors: PH Nash (Chairman), GBJ Bowes (Managing), IR Kemp, JA Pelser*
(*non-executive)
Registered office: Sable Place, Fairway Office Park, 52 Grosvenor Road,
Bryanston 2021. PO Box 786390, Sandton 2146.
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107.
Sponsor: Sasfin Capital - a division of Sasfin Bank Limited.
Date: 27/03/2008 16:11:11 Produced by the JSE SENS Department.
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