| Wed 8 Sep 2010, 10:30 | | SFN/SFNP - Sasfin Holdings Limited - Audited group results and dividend |
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SFN/SFNP - Sasfin Holdings Limited - Audited group results and dividend
declarations
For the year ended 30 June 2010
Sasfin Holdings Limited
Unlimited financial horizons
Incorporated in the Republic of South Africa
(Company registration number: 1987/002097/06)
("Sasfin" or "the Group" or "the Company")
(Ordinary share code: SFN ISIN: ZAE000006565)
(Preference share code: SFNP ISIN: ZAE000060273)
Audited group results and dividend declarations
For the year ended 30 June 2010
30 June 30 June
2010 2009
Earnings attributable to ordinary
shareholders R120 million R157 million
Headline earnings R107 million R154 million
Earnings per ordinary share 396 cents 571 cents
Headline earnings per ordinary share 355 cents 560 cents
Total assets R3,6 billion R3,2 billion
Total equity R1,1 billion R931 million
Return on ordinary shareholders` average
equity 16% 25%
Return on total average assets 4% 5%
Financial highlights
30 June 30 June
% 2010 2009
Change Audited Audited
Consolidated statement of financial position
Total assets (Rm`s) 12 3 552 3 181
Total gross loans and advances (Rm`s) 6 1 983 1 867
Non-performing loans and advances (Rm`s) (1) 147 149
Income statement
Earnings attributable to ordinary shareholders
(Rm`s) (24) 120 157
Headline earnings (Rm`s) (31) 107 154
Financial performance
Return on ordinary shareholders` average equity (%)
(36) 16 25
Return on total average assets (%) (20) 4 5
Operating performance
Non-interest income to total income (%) (5) 71 75
Efficiency ratio (%) 11 70 63
Non-performing advances to total gross loans and
advances (%) (13) 7 8
Share statistics
Earnings per ordinary share (cents) (31) 396 571
Headline earnings per ordinary share (cents)
(37) 355 560
Diluted earnings per ordinary share (cents)
(31) 396 570
Diluted headline earnings per ordinary share
(cents) (36) 355 559
Number of ordinary shares in issue at end of the
period (`000) 15 32 186 28 001
Weighted average number of ordinary shares in issue
(`000) 10 30 203 27 471
Diluted weighted average ordinary shares in issue
(`000) 10 30 233 27 519
Dividends per ordinary share relating to profit for
the period (cents) (40) 133 220
Preference share dividend number 12 (cents)
380,55 -
Preference share dividend number 11 (cents)
401,51 -
Preference share dividend number 10 (cents)
- 488,12
Preference share dividend number 9 (cents) - 584,28
Net asset value per ordinary share (cents) 10 2 635 2 405
Capital adequacy (unaudited)
Group capital to risk weighted assets (%) 7 32 30
Sasfin Bank Limited capital to risk weighted assets
(%) 13 27 24
Employees
Permanent staff complement (2) 563 573
Consolidated statement of financial position
30 June 30 June
2010 2009
% Audited Audited
Change R`000 R`000
Assets
Cash and cash balances 533 447 423 671
Short-term negotiable securities 58 000 49 689
Loans and advances to customers 1 902 500 1 801 485
Other receivables 292 989 318 751
Investment securities 396 017 261 211
Investment in associated companies 65 334 56 707
Property, plant and equipment 184 406 187 638
Investment property 51 038 27 999
Taxation 2 928 12 827
Intangible assets and goodwill 55 217 33 808
Deferred tax asset 9 646 7 366
Total assets 12 3 551 522 3 181 152
Liabilities
Interbank funding 52 094 69 777
Deposits from customers 911 559 881 380
Long-term loans 182 450 100 000
Other payables 338 187 262 631
Debt securities issued 924 436 873 735
Taxation 9 784 2 118
Deferred tax liability 69 112 60 777
Total liabilities 11 2 487 622 2 250 418
Equity
Ordinary share capital and share premium
161 341 43 476
Reserves 686 848 629 825
Preference shares capital and share premium
199 278 199 278
Total equity attributable to equity holders of
the parent 20 1 047 467 872 579
Non-controlling interest 16 433 58 155
Total equity 14 1 063 900 930 734
Total liabilities and equity 12 3 551 522 3 181 152
Commitments and contingent liabilities 61 283 74 855
Consolidated income statement
30 June 30 June
2010 2009
% Audited Audited
Change R`000 R`000
Interest income 352 052 371 072
Interest expense 172 448 211 510
Net interest income 13 179 604 159 562
Non-interest income 446 134 471 680
Total income (1) 625 738 631 242
Impairment charges on loans and advances
47 27 552 18 762
Net income after impairments 598 186 612 480
Operating costs 9 436 393 399 306
Staff costs 185 883 168 153
Other operating expenses 250 510 231 153
Profit from operations 161 793 213 174
Share of associated companies` income 8 093 8 167
Profit before income tax 169 886 221 341
Income tax expense 30 590 32 332
Profit for the year (26) 139 296 189 009
Profit attributable to:
Non-controlling interest 2 775 10 459
Preference shareholders 16 947 21 646
Equity holders of the parent (24) 119 574 156 904
Profit for the year (26) 139 296 189 009
Earnings per ordinary share (cents) 396 571
Diluted earnings per ordinary share (cents)
396 570
Consolidated statement of cash flows (summarised)
30 June 30 June
2010 2009
Audited Audited
R`000 R`000
Net cash flows from operating activities 74 970 (158 199)
Net cash flows used in investing activities (160 444) (189 152)
Net cash flows from financing activities 217 613 262 585
Net increase/(decrease) in cash and cash equivalents
132 139 (84 766)
Cash and cash equivalents at beginning of the period 403 583 483 062
Effect of exchange rate fluctuations on cash held
3 631 5 287
Cash and cash equivalents at end of the period 539 353 403 583
Consolidated statement of comprehensive income
30 June 30 June
2010 2009
Audited Audited
R`000 R`000
Profit for the year 139 296 189 009
Other comprehensive income for the year net of income
tax 625 (41 399)
Foreign currency translation reserve (853) (43 693)
Net gains on re-measurement of available-for-sale
financial assets 198 197
Gain on re-measurement of available-for-sale financial
assets 230 217
Income tax effect (32) (20)
Net revaluation on the transfer of property, plant and
equipment from owner-occupied to investment property
- 2 097
Gains on re-measurement of available-for-sale financial
assets - 2 912
Income tax effect - (815)
Net gains on hedge of net investment in foreign
operations 1 280 -
Gains on hedge of net investment in foreign operations
1 778 -
Income tax effect (498) -
Total comprehensive income for the year 139 921 147 610
Attributable to:
Non-controlling interest 2 775 10 532
Preference shareholders 16 947 21 646
Equity holders of the parent 120 199 115 432
Total comprehensive income for the year 139 921 147 610
Consolidated statement of changes in equity (summarised)
30 June 30 June
2010 2009
Audited Audited
R`000 R`000
Opening total shareholders` equity 930 734 840 919
Total comprehensive income for the year 139 921 147 610
Profit for the year 139 296 189 009
Property revaluation reserve - 2 097
Foreign currency translation reserve (853) (43 693)
Hedging reserve 1 280 -
Available-for-sale reserve 198 197
Movement in non-controlling interest (51 130) 7 462
Issue of ordinary shares 117 865 15 937
Share-based payments reserve movements (411) (747)
Preference share dividend (16 947) (21 646)
Ordinary share dividend (56 132) (58 801)
Closing balance 1 063 900 930 734
Headline earnings reconciliation
30 June 30 June
2010 2009
Audited Audited
R`000 R`000
Earnings are determined as follows:
Earnings attributable to equity holders of the parent
119 574 156 904
Headline adjustable items (12 377) (3 121)
Profit on sale of property and equipment 30 (25)
Gross 42 (34)
Tax Impact (12) 9
Gain on disposal of businesses and divisions - (3 096)
Gross - (3 632)
Tax Impact - 407
Non-controlling interest - 129
Revaluation of investment property (12 407) -
Gross (17 232) -
Tax Impact 4 825 -
Headline earnings 107 197 153 783
Headline earnings per ordinary share (cents) 355 560
Segmental analysis (summarised)
30 June 30 June
2010 2009
Audited Audited
R`000 R`000
Segment Results
Business Banking 42 802 65 460
Capital 37 825 28 072
Treasury 15 480 38 909
Wealth Management 17 728 21 294
Logistics and Risk Management 6 205 13 628
Group 19 256 21 646
Profit for the year 139 296 189 009
Segment Revenue
Business Banking 402 688 487 122
Capital 97 255 69 782
Treasury 142 500 213 323
Wealth Management 173 855 163 988
Logistics and Risk Management 65 771 73 524
Inter-group eliminations (75 790) (164 987)
Total segment revenue 806 279 842 752
Commentary
Nature of business
Sasfin is a bank-controlling company listed in the "Financials: Investment
Services" sector of JSE Limited. Sasfin`s subsidiaries provide a wide range of
complementary banking, financial and related services.
Business review: group performance
Business environment
The South African economy remained challenging and fragile, with the much
anticipated recovery coming at a slow pace, resulting in increasing unemployment
and lower consumer spending.
Sasfin continued to build on its core business activities, wherein total assets
grew encouragingly by 12% to R3,6 billion (2009: 5% to R3,2 billion), largely
underpinned by strong growth in the Equipment Rental Finance unit, particularly
in the second half of the financial year.
The 2010 financial year was a year of consolidation for the Group, following its
investment in new talent, technology and physical infrastructure. These
initiatives are largely complete and in place, and present the Group with a
solid platform for growth.
Key developments
The Group successfully relocated to its new head office in Johannesburg at the
start of the financial year under review.
As previously announced, the Group 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 for the Business Banking segment.
The Group restructured its empowerment transaction with InnoVent Investment
Holdings (Pty) Limited by way of a share swap exchange, which resulted in a Tier
I capital increase of R42 million. Consequently, the non-controlling interest
decreased accordingly.
A Group subsidiary company entered into an en commandite partnership with other
financial institutions, pension funds and development organisations to establish
the Trinitas Private Equity Fund, a mid-market fund which had a first closing at
R430 million. Sasfin also acquired a 40,5% interest in the fund management
company.
During the financial year, Sasfin Bank Limited acquired a boutique corporate
finance company to broaden its corporate finance offering and expand its skills
base.
Financial overview
The Group`s earnings attributable to ordinary shareholders of R120 million
(2009: R157 million) represents a 24% decrease on the corresponding period in
2009. Headline earnings and headline earnings per share showed a larger decrease
of 31% and 37% respectively, due to the dilutory effect on the new capital
injections during the period and certain exclusions from headline earnings in
terms of fair value gains derived on investment property.
The Group`s results were affected by lower business volumes in certain key
areas of business and also an increase in impairment losses, primarily due to
the sluggish economy still showing signs of credit stress. Notwithstanding this,
all operating segments made a positive contribution to earnings, albeit at lower
levels, except for Sasfin Capital that achieved an improved performance in the
current year.
Credit impairment charges increased in the first six months of this financial
year, with the second half showing signs of improvement. This resulted in the
annualised credit loss ratio reducing to 1,4% at June 2010 from 2% in December
2009.
Although interest income is lower than last year in line with a relatively flat
lending book, net interest income was 13% higher than in 2009, mainly due to
improved margins on the equipment rental finance book.
Non-interest revenue, excluding the exceptional foreign exchange gain in 2009,
remained stable and showed a marginal increase of 5% year on year, driven by
realised and unrealised gains in the private equity portfolios.
Operating costs grew by 9% year on year. The cost increases are due to the
Group`s continued investment in infrastructural development. This investment,
coupled with the subdued revenue levels, resulted in a deterioration in the
efficiency ratio from 63% to 70%.
Following the capital injection received from the IFC and the empowerment
restructure, the total Group equity grew to R1,1 billion, representing a 14%
increase over 2009.
The Group maintains very comfortable levels of capital and at 30 June 2010, the
statutory risk-weighted capital adequacy of the Group was 32% (2009: 30%) and
that of Sasfin Bank Limited 27% (2009: 24%), which is well above its internal
targets and the prescribed minimum regulatory requirements.
Sasfin`s securitisation structure, a leader in its market, once again
successfully refinanced R430 million of its paper and securitised a further
tranche of R58 million, in a market still recovering from the global economic
crisis. This highlights the exceptional quality and yield of these assets to
investors.
The Group`s funding base remains stable and well diversified. The capital
injections contributed to improved liquidity levels being maintained.
The financial sector charter
Whilst there is uncertainty about the status of this Charter, Sasfin has
consistently improved its scorecard and has again been awarded an "A" rating for
black economic empowerment by the Financial Sector Charter Council.
Prospects
Sasfin is well positioned as a banking and financial services provider focusing
on the entrepreneurial market.
Notwithstanding the uncertain economic recovery, the Group expects to see
improved levels of business activity and performance.
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 annual financial statements
Statement of compliance
The audited summarised consolidated financial statements have been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards, its interpretations adopted by the International
Accounting Standards Board, the presentation and the disclosure requirements of
International Accounting Standards statement IAS 34 - "Interim Financial
Reporting", the Listings Requirements of the JSE Limited, AC 500 series issued
by South African Institute of Chartered Accountants and the requirements of the
South African Companies Act.
Basis of preparation
These summarised audited results are a summary of the consolidated annual
financial statements that are prepared in thousands of South African Rand
("R`000") on the historical cost basis, in accordance with International
Financial Reporting Standards ("IFRS") and the Companies Act, except for certain
financial assets and liabilities which are recognised at fair value.
The accounting policies are those presented in the annual financial statements
for the year ended 30 June 2010 and have been applied consistently to the
periods presented in these audited summarised consolidated financial statements
and with those of the previous financial year, and by all Group entities, except
for changes in the following areas:
Determination and presentation of operating segments as required by IFRS 8
Accounting for business combinations as required by IFRS 3 (2008)
Accounting for acquisitions for non-controlling interests as required by IAS 27
(2008).
The adoption of these policies did not have a significant impact on the Group`s
results, and with regard to IFRS 8 requirements, the only impact was on
disclosure and presentation aspects.
The audited summarised consolidated financial statements comprise a consolidated
statement of financial position at 30 June 2010, and a consolidated income
statement, a consolidated statement of comprehensive income, a summarised
statement of equity, a summarised cash flow statement and summarised segmental
analysis reports for the year ended 30 June 2010.
Reports of the independent auditors
The unmodified audit reports of KPMG Inc. and PKF (Jhb) Inc., the independent
auditors, on the annual financial statements and the summarised provisional
financial statements contained herein for the year ended 30 June 2010, dated 2
September 2010, are available for inspection at the Company`s registered office.
Preference share dividend
Notice is hereby given that preference dividend number 12 amounting to 380,55
cents (2009: 488,12 cents) per preference share ("preference dividend") has been
declared for the period 1 January 2010 to 30 June 2010, on 1 000 000 preference
shares issued at R100-00 each, and on 905 000 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 of Friday, 1
October 2010.
The salient dates relating to the preference dividend are as follows:
Last day to trade cum the preference dividend
Thursday, 23 September 2010
Preference shares commence trading ex the
preference dividend
Monday, 27 September 2010
Preference dividend record date Friday, 1 October 2010
Payment date of preference dividend
Monday, 4 October 2010
Preference share certificates may not be dematerialised or rematerialised
between Monday, 27 September 2010 and Friday,
1 October 2010, both days inclusive.
Final ordinary share dividend
Notice is hereby given that a final ordinary share dividend for the financial
year ended 30 June 2010, amounting to 87 cents per share (2009: 149 cents per
share) ("ordinary dividend") has been declared. The ordinary dividend is payable
to holders of ordinary shares recorded in the register of the Company at the
close of business on Friday, 8 October 2010.
Together with the interim ordinary dividend of 46 cents declared on 3 March
2010, the total ordinary dividends for the financial year amount to 133 cents
per share (2009: 220 cents per share).
The salient dates relating to the ordinary dividend are as follows:
Last day to trade cum the ordinary dividend
Friday, 1 October 2010
Ordinary shares commence trading ex the ordinary
dividend Monday, 4 October 2010
Ordinary dividend record date Friday, 8 October 2010
Payment date of ordinary dividend Monday, 11 October 2010
Ordinary share certificates may not be dematerialised or rematerialised between
Monday, 4 October 2010 and Friday, 8 October 2010, both days inclusive.
The above dates and times are subject to amendment. Any such amendment will be
released on SENS and published in the press.
Directorate and changes to company secretariat
Mr Grant Dunnington was appointed a non-executive director of the Company and
its subsidiary, Sasfin Bank Limited, on 25 February 2010.
As announced, Mr Martin Glatt will be retiring as non-executive chairman and
director of the Company and its subsidiary, Sasfin Bank Limited, with effect
from 26 November 2010.
The board further announces the untimely passing away of the Group Company
Secretary, Mr Stanley Jackson, on 23 August 2010. The Group extends its deepest
sympathy and sincere condolences to his family.
Ms Natasha Remba has been appointed as Acting Company Secretary.
Notice of annual general meeting and posting of annual report
The annual general meeting of Sasfin will be held at 29 Scott Street, Waverley,
Johannesburg, on Thursday, 25 November 2010 at 14h00.
The annual report will be posted to shareholders on or about 26 October 2010.
For and on behalf of the Board
MB Glatt RDEB Sassoon
Chairman Chief Executive Officer
8 September 2010
This announcement and additional information is available on the website:
www.sasfin.com
Registered Office
29 Scott Street, Waverley, 2090, Johannesburg, Tel: +27 11 809 7500, Fax: +27 11
887 6167/2489, 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
Acting Group Secretary
N Remba (appointed 26 August 2010)
Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Joint Auditors
KPMG Inc. and PKF (Jhb) Inc.
Lead Sponsor
KPMG Services (Pty) Limited
Joint Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 08/09/2010 10:30:01 Produced by the JSE SENS Department.
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