| Wed 3 Mar 2010, 9:55 | | SFN - Sasfin Holdings Limited - Unaudited group interim results and dividend |
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SFN SFNP
SFN
SFN - Sasfin Holdings Limited - Unaudited group interim results and dividend
declarations for the six month period ended 31 December 2009
Sasfin Holdings Limited
Incorporated in the Republic of South Africa
("Sasfin" or "the Group" or "the Company")
(Ordinary share code: SFN ISIN: ZAE000006565)
(Preference share code: SFNP ISIN: ZAE000060273)
UNAUDITED GROUP INTERIM RESULTS AND DIVIDEND DECLARATIONS FOR THE SIX MONTH
PERIOD ENDED 31 DECEMBER 2009
31 December 31 December
2009 2008
Profit for the period R59 million R81 million
Headline earnings per ordinary share 164 cents 239 cents
Total equity R1 billion R867 million
Return on ordinary shareholders` average equity 14% 22%
Group capital adequacy 35% 31%
Return on total average assets 3% 4%
FINANCIAL HIGHLIGHTS
31 Dec 31 Dec 30 June
% 2009 2008 2009
Change Unaudited Unaudited Audited
Consolidated statement of
financial position (Rm`s)
Total assets 14 3 462 3 043 3 181
Total gross loans and advances 1 1 939 1 912 1 867
Non-performing loans and 37 168 122 149
advances
Income statement (Rm`s)
Headline earnings (27) 48 65 154
Earnings attributable to (27) 48 65 157
ordinary shareholders
Financial performance (%)
Return on ordinary (37) 14 22 25
shareholders` average equity
Return on total average assets (27) 3 4 5
Operating performance (%)
Non-interest income to total 78 78 75
income
Credit loss ratio 2 1,2 1
Efficiency ratio 68 61 63
Non-performing advances to 9 6 8
total gross loans and advances
Share statistics
Headline earnings per ordinary (32) 164 239 560
share (cents)
Earnings per ordinary share (32) 164 239 571
(cents)
Diluted earnings per ordinary (31) 163 238 570
share (cents)
Diluted headline earnings per (31) 164 238 559
ordinary share (cents)
Number of ordinary shares in 13 31 109 27 432 28 001
issue at end of the period
(`000)
Weighted average number of 6 29 048 27 312 27 471
ordinary shares in issue (`000)
Diluted weighted average 6 29 073 27 412 27 519
ordinary shares in issue (`000)
Dividends per ordinary share (36) 46 71 220
relating to profit for the
period (cents)
Dividends per preference share (31) 401,51 584,28 1 072,00
relating to profit for the
period (cents)
Net asset value per ordinary 6 2 416 2 287 2 405
share (cents)
Capital adequacy
Group capital to risk weighted 14 35 31 31
assets
Sasfin Bank Limited capital to 47 31 21 25
risk weighted assets (%)
Employees
Permanent staff complement (2) 563 574 573
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 Dec 31 Dec 30 June
2009 2008 2009
% Unaudited Unaudited Audited
Change R`000 R`000 R`000
ASSETS
Cash and cash balances 638 068 357 341 423 671
Short-term negotiable 80 822 57 469 49 689
securities
Loans and advances to 1 853 439 1 851 469 1 801 485
customers
Other receivables 266 872 281 548 318 751
Investment securities 277 141 294 553 261 211
Investments in associated 55 604 33 352 56 707
companies
Property, plant and equipment 239 145 133 864 215 637
Taxation 6 168 7 285 12 827
Intangible assets and 37 641 16 902 33 808
goodwill
Deferred tax asset 7 192 9 405 7 366
Total assets 14 3 462 092 3 043 188 3 181 152
LIABILITIES
Interbank funding and 82 973 151 834 69 777
deposits from banks
Deposits from customers 955 043 935 814 881 380
Long-term loans 182 450 51 496 100 000
Other payables 245 163 165 564 262 631
Debt securities issued 925 004 815 082 873 735
Taxation 711 - 2 118
Deferred tax liability 67 606 56 647 60 777
Total liabilities 13 2 458 950 2 176 437 2 250 418
EQUITY
Ordinary share capital and 119 971 27 744 43 476
share premium
Reserves 631 732 599 670 629 825
Preference share capital and 199 278 199 278 199 278
share premium
Total equity attributable to 15 950 981 826 692 872 579
equity holders of the parent
Minority interest 52 161 40 059 58 155
Total equity 1 003 142 866 751 930 734
Total liabilities and equity 14 3 462 092 3 043 188 3 181 152
Commitments and contingent 47 625 85 604 74 855
liabilities
CONSOLIDATED INCOME STATEMENT
31 Dec 31 Dec 30 June
2009 2008 2009
% Unaudited Unaudited Audited
Change R`000 R`000 R`000
Interest income 196 231 202 085 371 072
Interest expense 114 002 126 423 211 510
Net interest income 82 229 75 662 159 562
Other income 228 083 228 104 471 680
Total income 2 310 312 303 766 631 242
Impairment charges on loans and 19 746 11 132 18 762
advances
Net income after impairments 290 566 292 634 612 480
Operating costs 14 219 726 193 077 399 306
Staff costs 109 771 101 992 168 153
Other operating expenses 109 955 91 085 231 153
Profit from operations 70 840 99 557 213 174
Share of associated companies` 2 888 2 357 8 167
income
Profit before income tax (28) 73 728 101 914 221 341
Income tax expense 14 929 20 682 32 332
Profit for the period (28) 58 799 81 232 189 009
Profit attributable to:
Minority interest 1 971 5 342 10 459
Preference shareholders 9 298 10 516 21 646
Equity holders of the parent (27) 47 530 65 374 156 904
Profit for the period (28) 58 799 81 232 189 009
Weighted average number of 6 29 048 27 312 27 094
ordinary shares in issue (`000)
Basic earnings per ordinary (32) 164 239 571
share (cents)
Diluted earnings per ordinary (31) 163 238 570
share (cents)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SUMMARISED)
31 Dec 31 Dec 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Opening total shareholders` equity 930 734 840 919 840 919
Total comprehensive income for the period 54 332 83 503 147 610
Profit for the period 58 799 81 232 189 009
Investment property revaluation reserve - - 2 097
Change in foreign currency translation (5 159) 2 509 (43 693)
reserve
Change in available-for-sale reserve 692 (238) 197
Change in minorities (6 498) (5 536) 7 462
Issue of ordinary shares 76 495 - 15 937
Share-based payments reserve movements - 205 (747)
Premium on acquisition of additional (901) - -
equity in subsidiary
Preference share dividend (9 298) (10 516) (21 646)
Ordinary share dividend (41 722) (41 824) (58 801)
Closing balance 1 003 142 866 751 930 734
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
31 Dec 31 Dec 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Profit for the period 58 799 81 232 189 009
Other comprehensive income/(loss) for the (4 467) 2 271 (41 399)
period net of income tax
Foreign currency translation reserve (5 159) 2 509 (43 693)
Net gains/(losses) on re-measurement of 692 (238) 197
available-for-sale financial assets
Gains/(losses) on re-measurement of 805 (330) 217
available-for-sale financial assets
Income tax effect (113) 92 (20)
Net revaluation of investment property - - 2 097
Revaluation of investment property - - 2 912
Income tax effect - - (815)
Total comprehensive income for the period 54 332 83 503 147 610
Attributable to:
Minority interest 504 5 505 10 532
Preference shareholders 9 298 10 516 21 646
Equity holders of the parent 44 530 67 482 115 432
Total comprehensive income for the period 54 332 83 503 147 610
CONSOLIDATED STATEMENT OF CASH FLOWS (SUMMARISED)
31 Dec 31 Dec 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Net cash flows from operating activities 58 083 (294 733) (158 199)
Net cash flows from investing activities (31 439) (191 163) (189 152)
Net cash flows from financing activities 204 221 212 149 262 585
Net increase/(decrease) in cash and cash 230 865 (273 747) (84 766)
equivalents
Cash and cash equivalents at beginning of 403 583 483 062 483 062
the period
Effect of exchange rate fluctuations on 1 469 2 165 5 287
cash held
Cash and cash equivalents at end of the 635 917 211 480 403 583
period
HEADLINE EARNINGS RECONCILIATION
31 Dec 31 Dec 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Headline earnings are determined as
follows:
Profit attributable to equity holders of 47 530 65 374 156 904
the parent
Headline adjustable items 32 (8) (3 121)
32 (8) (25)
Profit on sale of property and equipment 48 (10) (34)
Tax impact (15) 2 9
Minority effect (1) - -
- - (3 096)
Gain on disposal of businesses and - - (3 632)
divisions
Tax impact - - 407
Minority effect - - 129
Headline earnings 47 562 65 366 153 783
Headline earnings per ordinary share 164 239 560
(cents)
SEGMENTAL ANALYSIS (SUMMARISED)
31 Dec 31 Dec 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Segment Results
Business Banking 17 370 19 545 65 460
Capital 15 596 22 998 28 072
Treasury 15 125 17 762 60 555
Wealth Management 7 895 11 501 21 294
Logistics and Risk Management 2 813 9 426 13 628
58 799 81 232 189 009
Segment Revenue
Business Banking 205 240 221 680 487 122
Capital 39 972 42 690 69 782
Treasury 94 846 112 158 213 323
Wealth Management 89 143 89 014 163 988
Logistics and Risk Management 32 990 43 290 73 524
Inter Group elimination (37 877) (78 643) (164 987)
424 314 430 189 842 752
COMMENTARY
NATURE OF BUSINESS
Sasfin Holdings Limited ("Sasfin" or "the Group" or "the Company") is a bank-
controlling company listed in the "Financials: Investment Services" sector of
JSE Limited ("the JSE"). Sasfin and its subsidiaries provide a wide range of
complementary banking, financial and related services.
BUSINESS REVIEW: GROUP PERFORMANCE
Business Environment
- The global economic downturn impacted sharply on the South African economy
during the past year.
- In South Africa, whilst the banking sector remained stable, economic activity
declined significantly, resulting in increasing unemployment and lower consumer
spending, and consequently credit defaults in all sectors of the economy.
- In a relatively tough and subdued trading environment, Sasfin has continued to
build on its core business activities, wherein all divisions made a positive
contribution to headline earnings, albeit at lower levels.
Key developments
- As previously announced, the Group successfully concluded a strategic
partnership with the International Finance Corporation ("IFC"), a member of the
World Bank, with a US$30 million capital and funding transaction as follows:
- A specific issue of 3 005 894 ordinary shares to the IFC, amounting to R74,6
million (US$10 million) in October 2009;
- A subordinated loan agreement of R82,45 million (US$10 million) with Sasfin
Bank Limited, which qualifies as Tier II capital; and
- A US$10 million trade finance guarantee facility for the Business Banking
segment.
The Group continued to invest in acquiring new talent, technology and physical
infrastructure. These initiatives are largely complete and in place, and present
the Group with a solid platform for growth.
Financial overview
- The Group`s headline earnings of R48 million (2008: R65 million) represents a
27% decrease on the corresponding period in 2008. Headline earnings per share
showed a larger decrease of 32% year on year, due to the dilutory effect of the
new capital injection received from the IFC.
- The Group`s results were affected by marginal asset growth in its key areas of
business and increased impairment losses, in an economy still feeling the "lag
effect" of the global financial crisis. The credit loss ratio increased to 2% on
average loans and advances from 1,2% in 2008.
- The Group`s investment in its infrastructural development impacted on
operating costs which grew by 14% year on year. This investment, coupled with
the lower revenue levels, resulted in a poor efficiency ratio of 68%.
- Total assets grew by 14% to R3,5 billion (2008: R3,0 billion), underpinned by
increased liquidity levels and investment in the Group`s new headquarters,
whilst loans and advances showed a small growth of 1%.
- Deposits increased marginally year on year and the Group has maintained
comfortable liquidity levels in a market constrained by liquidity shortages.
- Following the capital injection received from the IFC, the total group equity
exceeds R1 billion which presents a strong base for growth.
- Sasfin`s securitisation structure, a leader in its market, once again
successfully refinanced its paper and securitised a further tranche of R58
million, highlighting the quality of these assets.
- The Group maintains very comfortable levels of capital and at 31 December
2009, the statutory risk-weighted capital adequacy of the Group was 35% (2008:
31%) and that of Sasfin Bank Limited 31% (2008: 21%), which is well above the
prescribed minimum requirement of 9,75%.
PROSPECTS
- Sasfin is well positioned as a banking and financial services provider
focusing on the entrepreneurial market.
- Notwithstanding the uncertainty and difficult economic conditions, the Group
expects to continue at current levels of performance into the second half of the
financial year.
- Sasfin is poised for future growth with its strong capital position, improved
liquidity levels and investment in talent and systems.
BASIS OF PREPARATION AND PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The unaudited interim consolidated financial statements have been prepared in
accordance with IAS 34 - "Interim Financial Reporting" and the accounting
policies applied conform to International Financial Reporting Standards. The
same accounting policies and methods of computation are followed in the interim
financial statements as compared to the 2009 annual financial statements. There
are no material events subsequent to the end of the interim period.
PREFERENCE SHARE DIVIDEND
Notice is hereby given that preference dividend number 11 amounting to 401,51
cents (2008: 584,28 cents) per preference share ("preference dividend") has been
declared for the six months ended 31 December 2009 on one million preference
shares issued at R100,00 each and on nine hundred and five thousand preference
shares issued at R110,49 each. The preference dividend is payable to holders of
preference shares recorded in the register of the Company at the close of
business on Friday, 26 March 2010.
The salient dates relating to the preference dividend are as follows:
Last day to trade cum the preference dividend Thursday, 18 March 2010
Preference shares commence trading ex the Friday, 19 March 2010
preference dividend
Preference dividend record date Friday, 26 March 2010
Payment of preference dividend Monday, 29 March 2010
Preference shares may not be dematerialised or rematerialised between Friday 19
March 2010 and Friday, 26 March 2010, both days inclusive.
INTERIM ORDINARY SHARE DIVIDEND
The Group has a stated policy of declaring interim and final ordinary share
dividends equal in aggregate to 40% of headline earnings. In accordance with
this policy, the Board of Sasfin has resolved to pay an interim dividend as set
out below.
Notice is hereby given that an interim ordinary share dividend of 46 cents
(2008: 71 cents) per ordinary share ("interim ordinary dividend") has been
declared and is payable to ordinary shareholders recorded in the register of the
Company at the close of business on Friday, 9 April 2010.
The salient dates relating to the interim ordinary dividend are as follows:
Last day to trade cum the interim ordinary Wednesday, 31 March 2010
dividend
Ordinary shares commence trading ex interim Thursday, 1 April 2010
ordinary dividend
Ordinary share dividend record date Friday, 9 April 2010
Payment date of ordinary share dividend Monday, 12 April 2010
Ordinary share certificates may not be dematerialised or rematerialised between
Thursday, 1 April 2010 and Friday, 9 April 2010, both days inclusive.
CHANGE TO THE BOARD
Mr Grant Craig Dunnington was appointed a non-executive director of the Company
and its subsidiary, Sasfin Bank Limited, on 25 February 2010.
For and on behalf of the Board
MB GLATT RDEB SASSOON
Chairman Chief Executive Officer
3 March 2010
This announcement and additional information is available on the website:
www.sasfin.com
Non-Executive Chairman
MB Glatt
Executive Directors
RDEB Sassoon* (Chief Executive Officer)
M Segal (Financial Director)
*British
Non-Executive Directors
CN Axten
ETB Blight
GC Dunnington
DD Mokgatle
MS Rylands
ML Smith
Company Secretary
S Jackson
Registered Office
29 Scott Street, Waverley, 2090, Johannesburg
Tel: +27 11 809 7500
Fax: +27 11 887 6167/2489
Websites: www.sasfin.com/www.sfpsecurities.com
Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Company registration number1987/002097/06
Lead Sponsor
KPMG Services (Pty) Limited
Joint Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Corporate Law Advisors
Edward Nathan Sonnenbergs Inc.
Business Banking Capital Wealth Management Treasury Logistics and Risk
Management
Date: 03/03/2010 09:55:02 Produced by the JSE SENS Department.
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