| Fri 25 Sep 2009, 11:55 | | SBL - Sable - Reviewed group results for the year ended 30 June 2009 |
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SBL
SBL
SBL - Sable - Reviewed group results for the year ended 30 June 2009
SABLE HOLDINGS LIMITED
(`Sable`)
(Registration No. 1968/010636/06)
(Incorporated in the Republic of South Africa)
Share code: SBL ISIN : ZAE000006383
Reviewed group results for the year ended 30 June 2009
Condensed consolidated income statement
Year ended Year ended
30 June 2009 30 June 2008
(Reviewed) (Audited)
R`000
Revenue 32 563 29 596
Operating profit before non-trading items 12 405 23 971
Profit on disposal of listed investments 48 845
Profit on disposal of investment property 5 395 -
Impairments of listed and associate investments (2 191) (3 180)
Fair value gains on investment property 21 920 6 695
Operating profit 37 577 28 331
Finance income 2 943 1 584
Finance costs (22 492) (20 284)
Share of profit from associates
and joint ventures 1 796 14 108
Profit before taxation 19 824 23 739
Taxation (4 922) 3 986
Net profit for the year 14 902 27 725
Attributable to equity shareholders of the holding company:
Equity shareholders of the holding company 14 761 27 751
Minority interest 141 (26)
14 902 27 725
Number of ordinary shares
Number of ordinary shares in
issue at year-end (`000) 9 967 8 170
Weighted average number of
ordinary shares in issue (`000) 9 176 8 170
Less: Treasury shares (`000) (792) (792)
Weighted average number of ordinary
shares in issue net of treasury shares (`000) 8 384 7 378
Earnings per ordinary share (cents) 176.1 376.1
Headline (loss)/earnings per ordinary
share (cents) (35.0) 219.4
Dividend per ordinary share (cents) - -
Reconciliation of headline (loss)/earnings
Net profit attributable to equity
shareholders of the holding company 14 761 27 751
Adjustments after tax:
Net impairment of investments:
Subsidiaries 2 191 3 180
Associates and joint ventures 198 (1 937)
Profit on disposal of investment property:
Subsidiaries (4 640) -
Profit on disposal of investments in associates and joint ventures:
Associates and joint ventures (1 727) -
Revaluation of investment property:
Subsidiaries (15 782) (4 820)
Associates and joint ventures 2 063 (2 151)
SIC 21 Income Taxes: Recovery of
revalued non-depreciable assets - (5 833)
Headline (loss)/earnings for the year (2 936) 16 190
Condensed consolidated balance sheet
At At
30 June 2009 30 June 2008
(Reviewed) (Audited)
R`000
Assets
Non-current assets 587 055 531 574
Investment property 349 640 324 678
Investments 228 602 200 330
Other non-current assets 8 813 6 566
Current assets 18 947 9 969
Cash and cash equivalents 7 056 478
Other current assets 11 891 9 491
Total assets 606 002 541 543
Equity and liabilities
Total equity attributable to equity holders 371 139 319 948
Shareholders` equity 371 060 320 010
Minority interest 79 (62)
Total liabilities 234 863 221 595
Non-current liabilities 200 923 164 673
Interest-bearing borrowings 161 868 130 396
Deferred taxation 39 055 34 277
Current liabilities 33 940 56 922
Loans on demand 20 117 44 509
Other current liabilities 13 823 12 413
Total equity and liabilities 606 002 541 543
Net asset value per ordinary share (cents) 4 045 4 337
Interest-bearing borrowings to total equity (%) 50.0 55.8
Interest-bearing borrowings to total assets (%) 30.6 33.0
Condensed consolidated statement of changes in equity
Year ended Year ended
30 June 2009 30 June 2008
(Reviewed) (Audited)
R`000
Balance at the beginning of the year 319 948 295 623
Net profit for the year 14 761 27 751
Claw-back rights offer 34 995 -
Movement in other reserves 1 435 264
Dividend paid - (3 690)
Balance at the end of the year 371 139 319 948
Condensed consolidated segmental report
Year ended Year ended
30 June 2009 31 June 2008
(Reviewed) (Audited)
R`000
Primary segment
Segmental revenue 32 563 29 596
Investment property 33 267 30 159
Trading property - 53
Investments - -
Corporate and other net revenue (704) (616)
Inter-segment charges (705) (620)
Corporate and other 1 4
Segmental operating profit before
non-trading items 12 405 23 971
Investment property 18 687 22 481
Trading property - (54)
Investments 3 037 11 603
Corporate and other (9 319) (10 059)
Segmental assets 606 002 541 543
Investment property 357 465 329 465
Trading property - -
Investments 228 602 200 330
Corporate and other 19 935 11 748
Condensed consolidated cash flow statement
Year ended Year ended
30 June 2009 30 June 2008
(Reviewed) (Audited)
R`000
Cash (outflow)/inflow from
operating activities (5 979) 4 529
Cash generated from operations 14 868 27 794
Finance costs (22 492) (20 284)
Finance income 2 943 1 584
Dividend paid (2) (3 680)
Taxation paid (1 296) (885)
Cash outflow from investing activities (30 153) (36 643)
Cash inflow from financing activities 63 852 34 163
Net increase in cash and cash equivalents 27 720 2 049
Cash and cash equivalents at the
beginning of the year (44 031) (46 080)
Cash and cash equivalents at the
end of the year (16 311) (44 031)
Cash and cash equivalents at the end of the year consist of:
Cash and cash equivalents 7 056 478
Bank overdrafts (20 117) -
Loans on demand (3 250) (44 509)
(16 311) (44 031)
Comments
Basis of preparation and accounting policies
The condensed consolidated financial results have been prepared using accounting
policies consistent with International Financial Reporting Standards ("IFRS"),
in accordance with the requirements of IAS 34 Interim Financial Reporting,
Listings Requirements of the JSE Ltd ("JSE") and the manner required by the
South African Companies Act. The principal accounting policies used in the
preparation of the reviewed results for the year ended 30 June 2009 are
consistent with those used in the prior year.
Review opinion
The condensed consolidated results for the year have been reviewed by BDO
Spencer Steward (Johannesburg) Inc. and their review opinion is available for
inspection at the company`s registered office.
Comparative analysis between 30 June 2009 (reviewed) and 30 June 2008 (audited)
Consolidated income statement
The group reported a net profit of R14.9 million (2008: R27.7 million) for the
year ended 30 June 2009. Earnings per share decreased by 53.2% from 376.1 cents
to 176.1 cents, with headline earnings per share decreasing by 116.0% from 219.4
cents to a headline loss per share of 35.0 cents.
Revenue increased by 10.0% from R29.6 million to R32.6 million. Operating profit
before non-trading items decreased from R24.0 million to R12.4 million due to
income from property development related activities reducing by R8.6 million (-
73.8%), an increase in bad debt write-offs in respect of rent collections of
R1.1 million (+1205.0%) and a significant increase in maintenance and security
costs related to a major retail shopping centre upgrade of R3.5 million
(+111.9%). Profit on disposal of investment property of R5.4 million related
mainly to the disposal of a commercial office property in Bryanston, Sandton.
Impairments of investments of R2.2 million pertained to shares listed on the JSE
as well as the impairment of a non-recoverable loan to an associated company.
Fair value gains on investment property were R21.9 million (2008: R6.7 million)
and related to the group revaluation by directors of wholly-owned investment
property. The fair value gains were stimulated by lower interest rates in the
second half of the year as well as inflationary linked rental increases.
Operating profit of R37.6 million (2008: R28.3 million) increased by 32.6%.
Interest paid of R22.5 million (2008: R20.3 million) increased by 10.9% and was
mainly due to higher interest rates in the first half of the year and increased
borrowings arising from a retail shopping centre upgrade.
Associate and joint venture profits were R1.8 million (2008: R14.1 million) as a
result of sales in respect of residential developments being significantly lower
than those experienced in 2008.
Taxation of R4.9 million (2008: credit of R4.0 million) related mainly to
deferred tax on investment property revaluations, whilst 2008 reflected a credit
charge in order to comply with Circular 1/2006, IAS 21 Income Taxes and SIC 21
Income Taxes: Recovery of revalued non-depreciable assets.
Consolidated balance sheet
The net asset value decreased by 6.7% from 4 337 cents to 4 045 cents and
interest-bearing borrowings to total equity reduced from 55.8% to 50.0%.
Assets
Investment property increased by a net amount of R25.0 million relating to
capital spend of R30.2 million mainly in respect of the completed upgrade of
Noordheuwel Retail Centre in Krugersdorp, Johannesburg. Investment property to
the value of R32.5 million was disposed of or reclassified as available for sale
during the year as well as investment property revaluations of R21.9 million and
investment property profits of R5.4 million were reported.
Investments have been stated at R228.6 million (2008: R200.3 million) comprising
investments in listed shares of R5.6 million (2008: R7.8 million), and
investments in associates and joint ventures of R223.0 million (2008: R192.5
million). The investment in associates and joint ventures increase of R30.5
million was as a result of loan funding of R27.6 million, profits of R1.8
million and at acquisition reserves of R1.1 million. The loan funding was
financed by way of Sable`s claw-back rights offer as more fully described below.
Current assets comprised cash and cash equivalents of R7.1 million, trade and
other receivables of R4.1 million and an investment property held for sale of
R7.8 million.
Equity and liabilities
Shareholders` equity increased by way of a claw-back rights offer of R35.0
million, net profits for the year of R14.8 million and a realisation of non-
distributable reserves of R1.4 million.
Interest-bearing borrowings increased from R130.4 million to R161.9 million to
fund a retail shopping centre upgrade.
The deferred taxation liability increased to R39.1 million (2008: R34.3 million)
due to an increased capital gains tax provision being made for investment
property fair value gains.
Loans on demand have reduced by 54.8% to R20.1 million (2008: R44.5 million) and
other current liabilities increased by 11.4% from R12.4 million to R13.8
million.
Claw-back rights offer
Sable finalised the terms of a subscription agreement with Isdale Holdings BV,
Sable`s controlling shareholder, to raise approximately R35.0 million by way of
a claw-back rights offer. The rights offer resulted in the issuing of 1 797 400
new ordinary shares of R0.50 each to Sable`s ordinary shareholders at a
subscription price of R19.47 per rights offer share and in the ratio of 22
rights offer shares for every 100 Sable shares held. The subscription price was
at a premium of 14.53% to the closing price of Sable ordinary shares on 10
November 2008 of R17.00. Shareholders recorded in the register of members at the
close of business on Thursday, 9 April 2009, were granted the right to subscribe
for rights offer shares in terms of the rights offer. The rights offer shares
ranked, upon allotment and issue, pari passu in all respects with the Sable
shares that are currently in issue.
Isdale Holdings BV part settled the rights offer through an advance payment of
R27.5 million on 1 December 2008 and the balance of R7.5 million on 6 January
2009.
On 8 May 2009, Sable received valid acceptances in respect of 110 613 claw-back
offer shares, representing 6.2% of the total number of claw-back shares offered
to qualifying shareholders pursuant to the claw-back offer. In accordance with
the subscription agreement between Sable and Isdale Holdings BV, Isdale had
subscribed for the remaining 1 686 787 claw-back offer shares.
Segmental report
An additional segment has been introduced to the segmental report in order
to better reflect the nature of operations. Comparatives have been
reclassified accordingly.
Capital commitments
Final capital expenditure of R3.2 million has been authorised and contracted for
in respect of the redevelopment of Noordheuwel Retail Centre in Krugersdorp,
Johannesburg.
Prospects
The directors are of the opinion that Sable has strongly positioned itself to
take advantage of a market recovery in regards to all property sectors in which
Sable is involved, particularly in its involvement in mixed usage developments
in Hazeldean, Pretoria East, and Montecasino Boulevard, Fourways.
Furthermore, Sable intends to redevelop Hobart Centre, a retail shopping centre
in Bryanston, Sandton, during the course of 2010.
The disposal of several non-strategic industrial warehousing investment
properties in Kya Sands, Johannesburg, has been identified. The funds pertaining
to this disposal will enhance Sable`s ability to acquire further quality
investment property during 2010.
Board changes
Mr Gavin Bowes has been appointed as acting financial director of the company
with effect from 24 June 2009 and is still the managing director
of the company.
Dividends
The board of directors has resolved not to declare a dividend for the year ended
30 June 2009. All cash reserves have been earmarked in settling short-term
borrowings and funding property opportunities that are currently being
investigated.
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)
25 September 2009
Directors: PH Nash (Chairman), GBJ Bowes (Managing), IA Chambers*,
IR Kemp*, JA Pelser*, DJ Pennington* (*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: 25/09/2009 11:55:27 Produced by the JSE SENS Department.
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