| Thu 16 Sep 2010, 15:14 | | SBL - Sable Holdings Limited - Reviewed Group results for the year ended 30 June |
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SBL
SBL
SBL - Sable Holdings Limited - Reviewed Group results for the year ended 30 June
2010
SABLE HOLDINGS LIMITED
("Sable or "the company" or "the group")
(Registration No. 1968/010636/06) Share code: SBL ISIN: ZAE000006383
(Incorporated in the Republic of South Africa)
Reviewed Group results for the year ended 30 June 2010
Consolidated condensed statement of comprehensive income
Year ended 30 June
2010 2009
(R`000) (Reviewed) (Audited)
Revenue 38,151 32,563
Turnover 36,746 29,757
Profit from operations 17,750 12,405
Profit on disposal of investments and
investment property 2,395 5,443
Profit on disposal of investments 2,145 48
Profit on disposal of investment property 250 5,395
Fair value gains on investments and
investment property 1,216 19,729
Fair value gains/(impairment) of investment 161 (2,191)
Net surplus on revaluation of investment property 1,055 21,920
Profit before net finance costs and taxation 21,361 37,577
Income from investments 42 137
Finance income 1,405 2,806
Finance costs (17,969) (22,492)
Share of profit from associates and joint ventures 2,327 1,796
Profit before taxation 7,166 19,824
Taxation 1,268 (4,922)
Net profit for the year 8,434 14,902
Other comprehensive income - -
Total comprehensive income for the year 8,434 14,902
Profit and total comprehensive income attributable to:
Equity shareholders of Sable Holdings Limited 8,444 14,761
Non-controlling interest (10) 141
Earnings and diluted earnings per ordinary share (cents) 92.0 176.1
Consolidated condensed statement of financial position
At 30 June
2010 2009
(R`000) (Reviewed) (Audited)
Assets
Non-current assets 517,669 587,055
Investment property 274,858 349,640
Investments 233,042 228,602
Deferred taxation 3,869 3,562
Other non-current assets 5,900 5,251
Current assets 3,841 11,122
Cash and cash equivalents 860 7,056
Other current assets 2,981 4,066
Non-current assets held for sale 36,000 7,825
Total assets 557,510 606,002
Equity and liabilities
Total equity 379,966 371,139
Non-current liabilities 155,431 200,923
Interest-bearing borrowings 123,351 161,868
Deferred taxation 32,080 39,055
Current liabilities 22,113 33,940
Total equity and liabilities 557,510 606,002
Weighted average number of ordinary shares in issue
net of treasury shares (`000) 9,175 8,384
Net asset value and net tangible asset value
per ordinary share (cents) 4,141 4,045
Consolidated condensed statement of cash flows
Year ended 30 June
2010 2009
(R`000) (Reviewed) (Audited)
Cash inflow/(outflow) from operating activities 3,226 (5,979)
Cash inflow/(outflow) from investing activities 21,097 (30,153)
Cash (outflow)/inflow from financing activities (9,222) 63,852
Net increase in cash and cash equivalents 15,101 27,720
Cash and cash equivalents at the beginning
of the year (16,311) (44,031)
Cash and cash equivalents at the end of the year (1,210) (16,311)
Cash and cash equivalents at the end of the year
consist of:
Cash and cash equivalents 860 7,056
Bank overdrafts (2,070) (20,117)
Loans on demand - (3,250)
(1,210) (16,311)
Consolidated condensed statement of changes in equity
(R`000) Share Non- Re Non-
capital distri- tained control-
and butable earn- ing Total
premium reserves ings interests equity
Balance at 30 June 2008 16,430 103,100 200,480 (62) 319,948
Total comprehensive income
for the year - - 14,761 141 14,902
Claw-back rights issue 34,995 - - - 34,995
Share of profit from
associates and joint
ventures - 1,584 (1,584) - -
Realisation of non-
distributable reserves - 1,294 - - 1,294
Balance at 30 June 2009 51,425 105,978 213,657 79 371,139
Total comprehensive income
for the year - - 8,444 (10) 8,434
Share of profit from
associates and joint ventures - 2,327 (2,327) - -
Realisation of non-
distributable reserves - 393 - - 393
Balance at 30 June 2010 51,425 108,698 219,774 69 379,966
Consolidated condensed segmental analysis
Year ended 30 June
2010 2009
(R`000) (Reviewed) (Audited)
Segmental revenue 38,151 32,563
Investment property 35,459 33,267
Commercial 6,614 6,566
Industrial 14,944 13,908
Retail 12,782 11,738
Residential 1,119 1,055
Corporate and inter-segment charges 2,692 (704)
Profit before taxation 7,166 19,824
Investment property
Commercial 5,425 12,066
Industrial 4,872 6,972
Retail 247 5,723
Residential 169 314
Corporate and inter-segment charges (3,547) (5,251)
Investment property 310,858 357,465
Commercial 65,951 64,112
Industrial 130,087 134,007
Retail 101,620 146,146
Residential 13,200 13,200
Reconciliation of net profit for the year to headline earnings
Year ended 30 June
2010 2009
(R`000) (Reviewed) (Audited)
Net profit attributable to equity shareholders
of the holding company 8,444 14,761
Adjustments
Profit on disposal of investment in
subsidiary and investment property (2,354) (5,395)
Fair value gains on investment property (1,077) (19,729)
Tax effects of adjustments 634 6,893
Adjustments through associates and joint ventures
Profit on disposal of investment property (414) (2,009)
Fair value (gains)/impairments on investment property (821) 3,776
Tax effects of adjustments (47) (1,233)
Headline earnings/(loss) for the year 4,365 (2,936)
Headline earnings/(loss) per ordinary share (cents) 47.6 (35.0)
Comments
Basis of preparation and accounting policies
The reviewed consolidated condensed financial results have been prepared in
accordance with the Framework concepts and the measurement and recognition
requirements of the International Financial Reporting Standards ("IFRS") and
containing information required by IAS 34 "Interim Financial Reporting" and AC
500 Standards as issued by the Accounting Practices Board, the JSE Limited
Listings Requirements and the manner required by the Companies Act. The
accounting policies are consistent with those used in the annual financial
statements for the financial year ended 30 June 2009 with the following
exceptions:
The following new Standards and amendments to Standards were mandatory for the
first time for the financial year beginning 1 July 2009:
IAS 1 (revised), "Presentation of financial statements": The revised Standard
prohibits the presentation of items of income and expenses (that is "non-owner
changes in equity") in the statement of changes in equity, requiring "non-owner
changes in equity" to be presented separately from owner changes in equity. All
"non-owner changes in equity" are required to be shown in a performance
statement.
Entities can choose whether to present one performance statement (the statement
of comprehensive income) or two statements (the income statement and statement
of comprehensive income). The group has elected to present one statement of
comprehensive income. The reviewed consolidated condensed financial statements
have been prepared using the revised disclosure requirements.
IFRS 8, "Operating segments": IFRS 8 replaces IAS 14, "Segment reporting",
extend the scope of segmental reporting, requiring additional disclosure. This
Standard requires the group or entity to adopt the `management approach` to
reporting segment information under which the information is presented on the
same basis as that used for internal reporting.
Review opinion
The consolidated condensed results for the year have been reviewed by Mazars and
their unqualified review opinion is available for inspection at the company`s
registered office.
Directors` commentary on results
Comparative analysis between 30 June 2010 (reviewed) and 30 June 2009 (audited)
The group reported a net profit of R8.4 million (2009: R14.9 million) for the
year ended 30 June 2010. Earnings per share decreased by 47.8 % from 176.1 cents
to 92.0 cents, with no dilution in either year, whilst headline earnings per
share increased by 236.0% from a headline loss of 35.0 cents to a headline
earnings per share of 47.6 cents.
Consolidated condensed statement of comprehensive income
Sable has continued to perform well despite operating in a weak property
environment. The quality of Sable`s property portfolio has ensured that
vacancies have been kept to a minimum at 2.6% (2009: 2.4%) of total gross
lettable area.
Profit on disposal of investments and investment property decreased from R5.4
million to R2.4 million. In September 2009, Sable concluded the 50% disposal of
a wholly-owned subsidiary (# see below), now a joint venture and associate which
owns Hobart Grove Retail Shopping Centre located in Bryanston, Sandton.
Fair value gains on investments and investment property decreased from R19.7
million to R1.2 million. The property yields applied to the portfolio were
independently assessed and reflect conservative valuations in a difficult
property market. In 2009, Noordheuwel Retail Shopping Centre was redeveloped
extensively with a large anchor tenant lease being concluded. This centre
revaluation accounted for R12.5 million of the R21.9 million in regard to 2009`s
net surplus on revaluation of investment property.
Group finance costs, net of investment and finance income, decreased from R19.5
million to R16.5 million. The decrease in finance costs was attributable to
reduced borrowings and lower bank funding rates.
Share of profits from associates and joint ventures increased from R1.8 million
to R2.3 million. Trading conditions remain difficult in respect of sales in
residential, retirement, industrial and commercial developments.
Consolidated condensed statement of financial position as at 30 June 2010
Investment property
Analysis of investment property
2010 Number of 2009 Number of
R`000 properties R`000 properties
Carrying value at the
beginning of the year *357 465 24 329 465 27
Additions 6 489 1 30 210 -
Disposals (54 151) (3) (24 130) (3)
Revaluations 1 055 - 21 920 -
Carrying value at the
end of the year 310 858 22 357 465 24
These balances are inclusive of the non-current assets held for sale of R36
million (*2009: R7.8 million).
Investment property has reduced by a net R46.6 million primarily due to the 50%
sale of a previously wholly-owned subsidiary (#), now a joint venture and
associate which owns Hobart Grove Retail Shopping Centre. During the year Sable
has also concluded the sale of six industrial parks in Kya Sands, Johannesburg,
valued at R36.0 million. These are non-current assets held for sale and transfer
of the properties is expected in September 2010.
Investments
Investments comprising of investments in listed shares, investments and
investments in associates and joint ventures increased by a net R4.4 million.
Investments in listed shares reduced by R3.9 million as a result of proceeds
received from the delisting of ERM Limited. Investments in associates increased
from R189.4 million to R197.7 million through net loan funding of R5.2 million,
share of profits from associates and joint ventures of R2.3 million and
acquisition of reserves of R0.8 million.
Interest-bearing borrowings and bank overdrafts
Interest-bearing borrowings have decreased from R188.9 million to R136.6 million
partially due to the 50% sale of Hobart Grove Retail Shopping Centre (#).
Furthermore proceeds received from the ERM delisting, 50% sale of Hobart Grove
Retail Centre and investment property sold during the year, reduced interest-
bearing borrowings, short-term loans on demand and bank overdrafts.
Prospects
Sable, with its building partners, Abbeydale Building and Civils (Pty) Limited,
are well advanced with a R68.0 million re-development of Hobart Grove Retail
Shopping Centre in Bryanston, Sandton. The expected date of completion remains
March 2011 and will include amongst other tenants, a Super Spar and Tops.
In addition, Sable`s 13.4% investment in a 5 444mSquared commercial office
building in Fourways, Sandton, has been completed with initial tenants taking
occupation in April 2010. Further commercial office, retail and residential
projects are being analysed to determine best land usage for the remainder of
the 16 hectare site.
Strategic industrial land in Laserdowns, Johannesburg, was acquired in January
2010. Future development activity for investment and resale purposes on this
site will complement Sable`s neighbouring industrial park investment.
Sales of existing sectional title retirement apartments, residential stands and
apartments in Hazeldean, Pretoria, accelerated in the early part of 2010 as
purchasers looked to re-enter the market, however difficulties in the end-user
property buyer raising banking finance has subdued this trend during the middle
of the year. Management remains confident that the infrastructure spend made in
previous years has been well invested.
An existing land acquisition made by Sable and its development partners in the
Fourways, Sandton node, has been earmarked as sectional title apartments for
resale as well as sectional title commercial office parks for rental and/or
resale. Marketing analysis is currently being undertaken to determine the
viability of commencing with these developments.
(#) Disposal of a wholly-owned subsidiary
Shares in the Howec Metals (1964) (Pty) Limited which owns Hobart Grove Retail
Shopping Centre, a previously wholly-owned subsidiary was disposed of on 30
September 2009. The effective % disposed of was 50%. The company subsequent to 1
October 2009 has been equity accounted for as a joint venture and associate.
Segmental Report
The reporting segments have changed in the current year to better portray the
property industry aligning the segments with those reported to the decision
makers of the entity. The segments are reported based on the nature of the
tenants and have accordingly been split into commercial, residential, industrial
and retail. The comparatives have been reclassified to align with this reporting
structure.
Related party transactions
Management fees were charged to associates and joint ventures during the year.
These amounts were market related and at arm`s length.
Directorate
Mr KA Haswell was appointed financial director of the group with effect from 2
March 2010. Mr GBJ Bowes continues to exclusively fulfil the role of managing
director.
The group is pleased to announce that Mr PH Nash, currently executive chairman,
will assume the role of non-executive chairman with immediate effect. Mr PH Nash
will be relinquishing his operational duties but will continue to provide
strategic guidance to the group. Furthermore, Mr JA Pelser and Mr IR Kemp
tendered their resignations from the board with effect 24 August 2010 to pursue
personal commitments. The board wishes to thank them for their valuable
contributions.
Dividends
The board of directors has resolved not to declare a dividend for the year ended
30 June 2010. All cash reserves have been earmarked in funding development and
investment property opportunities within the group.
Post balance sheet events
Sable`s board of directors are not aware of any material events that have
occurred between the end of the financial year and the date of this report.
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)
16 September 2010
Directors: PH Nash (Chairman)*, GBJ Bowes (Managing), KA Haswell (Financial), IA
Chambers*, 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: 16/09/2010 15:14:01 Produced by the JSE SENS Department.
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