| Wed 7 Mar 2012, 10:20 | | SFN/SFNP - Sasfin Holdings Limited - Unaudited results and dividend declarations |
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SFN SFNP
SFN
SFN/SFNP - Sasfin Holdings Limited - Unaudited results and dividend declarations
for the six month period ended 31 December 2011
Sasfin Holdings Limited
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
Unaudited results and dividend declarations for the six month period ended 31
December 2011
Headline earnings
R52,5 million in 2011
R52,5 million in 2010
Headline earnings per ordinary share
163 cents in 2011
163 cents in 2010
Total equity up 9%
R1,2 billion in 2011
R1,1 billion in 2010
Total funding base up 38%
R3,6 billion in 2011
R2,6 billion in 2010
Total gross loans and advances up 15%
R2,7 billion in 2011
R2,4 billion in 2010
Total assets up 28%
R5,3 billion in 2011
R4,1 billion in 2010
Return on ordinary shareholders` average equity down 1pps
12% in 2011
13% in 2010
Return on total average assets down 1pps
2% in 2011
3% in 2010
Group capital adequacy up 1pps
29% in 2011
28% in 2010
Financial highlights
31 Dec 31 Dec 30 June
% 2011 2010 2011
Change Unaudited Unaudited Audited
Consolidated statement of financial
position
Total assets (Rm`s) 28 5 233 4 090 4 373
Total gross loans and advances
(Rm`s) 15 2 735 2 376 2 429
Non-performing loans and advances
(Rm`s) 60 256 160 189
Income statement
Earnings attributable to ordinary
shareholders (Rm`s) - 52,5 52,5 98,0
Headline earnings (Rm`s) - 52,5 52,5 95,6
Financial performance
Return on ordinary shareholders`
average equity (pps) (1) 12 13 11
Return on total average assets
(pps) (1) 2 3 2
Operating performance
Non-interest income to total income
(pps) 2 69 67 64
Efficiency ratio (pps) 3 70 67 69
Credit loss ratio (pps) (0,4) 1,2 1,6 1,7
Non-performing loans and advances
to total gross loans and advances
(pps) 2 9 7 8
Share statistics
Earnings per ordinary share (cents) - 163 163 304
Headline earnings per ordinary
share (cents) - 163 163 297
Diluted earnings per ordinary share
(cents) - 163 163 304
Diluted headline earnings per
ordinary share (cents) - 163 163 297
Number of ordinary shares in issue
at end of the period (`000) - 32 237 32 236 32 237
Weighted average number of ordinary
shares in issue (`000) - 32 237 32 212 32 224
Diluted weighted average ordinary
shares in issue (`000) - 32 237 32 218 32 229
Dividends per ordinary share
relating to profit for the period
(cents) - 49 49 118
Preference share dividend number
15 (cents) - 340,27 - -
Preference share dividend number
14 (cents) - - - 334,73
Preference share dividend number
13 (cents) - - 362,05 362,05
Net asset value per ordinary
share (cents) 7 2 880 2 681 2 771
Capital adequacy
Group capital to risk weighted
assets (pps) 1 29 28 32
Sasfin Bank Limited capital to risk
weighted assets (pps) 3 25 22 30
Employees
Permanent staff complement 27 726 572 583
Consolidated statement of financial position
31 Dec 31 Dec 30 June
2011 2010 2011
% Unaudited Unaudited Audited
Change R`000 R`000 R`000
Assets
Cash and cash balances 102 1 270 831 627 997 805 233
Short-term negotiable
securities 86 125 89 108 72 405
Loans and advances to 16
customers 2 632 441 2 275 163 2 332 986
Other receivables 371 455 338 064 370 925
Investment securities 426 951 386 261 405 176
Investment in associated
companies 83 939 69 819 77 932
Property, plant and equipment 206 815 181 062 175 379
Investment property 51 038 51 038 51 038
Taxation 1 495 - 4 534
Intangible assets and goodwill 90 346 61 162 69 244
Deferred tax asset 11 866 10 552 8 412
Total assets 28 5 233 302 4 090 226 4 373 264
Liabilities
Interbank funding 90 126 151 268 60 453
Deposits from customers 27 1 646 999 1 293 507 1 215 446
Long-term loans 149 604 617 242 898 242 897
Debt securities issued 1 297 949 945 281 1 297 614
Other payables 369 248 298 281 374 922
Taxation 12 065 6 186 9 246
Deferred tax liability 56 327 73 819 63 815
Total liabilities 35 4 077 331 3 011 240 3 264 393
Equity
Ordinary share capital and
share premium 162 732 162 731 162 732
Reserves 765 825 701 563 730 425
Preference share capital and
share premium 199 278 199 278 199 278
Total equity attributable to 6
equity holders of the parent 1 127 835 1 063 572 1 092 435
Non-controlling interest 28 136 15 414 16 436
Total equity 7 1 155 971 1 078 986 1 108 871
Total liabilities and equity 28 5 233 302 4 090 226 4 373 264
Commitments and contingent
liabilities 97 587 57 704 67 711
Consolidated income statement
31 Dec 31 Dec 30 June
% 2011 2010 2011
Change Unaudited Unaudited Audited
R`000 R`000 R`000
Interest income 220 436 199 156 359 256
Interest expense 125 866 108 308 168 676
Net interest income 4 94 570 90 848 190 580
Non-interest income 13 205 794 182 212 345 431
Total income 10 300 364 273 060 536 011
Impairment charges on loans and
advances (13) 15 304 17 680 37 712
Net income after impairments 285 060 255 380 498 299
Operating costs 15 214 894 187 620 376 490
Staff costs 115 600 94 901 199 259
Other operating expenses 99 294 92 719 177 231
Profit from operations 70 166 67 760 121 809
Share of associated companies`
income 8 509 5 596 12 205
Profit before income tax 7 78 675 73 356 134 014
Income tax expense 17 426 12 829 20 161
Profit for the period 1 61 249 60 527 113 853
Profit attributable to:
Non-controlling interest 2 453 795 1 693
Preference shareholders 6 377 7 249 14 147
Equity holders of the parent 52 419 52 483 98 013
Profit for the period 61 249 60 527 113 853
Earnings per ordinary share
(cents) 163 163 304
Diluted earnings per ordinary
share (cents) 163 163 304
Condensed consolidated statement of cash flows
31 Dec 31 Dec 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash flows from operating activities 25 001 57 524 61 320
Movement in operating assets and (200
liabilities 123 776 (95 132) 395)
Net cash flows from operating (139
activities 148 777 (37 608) 075)
Net cash flows used in investing
activities (55 005) 10 622 (30 628)
Net cash flows from financing
activities 365 305 37 680 435 019
Net increase in cash and cash
equivalents 459 077 10 694 265 316
Cash and cash equivalents at beginning
of the period 817 185 539 353 539 353
Effect of exchange rate fluctuations on
cash held (9 432) 15 790 12 516
Cash and cash equivalents at end of the
period 1 266 830 565 837 817 185
Consolidated statement of comprehensive income
31 Dec 31 Dec 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Profit for the period 61 249 60 527 113 853
Other comprehensive income for the
period net of income tax 5 269 (9 508) (10 396)
Foreign currency translation reserve 32 560 (28 031) (25 163)
Net gains on re-measurement of
available-for-sale financial assets - 632 335
Gains on re-measurement of available-
for-sale financial assets - 735 575
Income tax effect - (103) (129)
Non-controlling interest - - (111)
Net gains on hedge of net investment in
foreign operations (27 291) 17 891 14 432
Gains on hedge of net investment in
foreign operations (37 904) 24 849 20 044
Income tax effect 10 613 (6 958) (5 612)
Total comprehensive income for the
period 66 518 51 019 103 457
Attributable to:
Non-controlling interest 2 453 795 1 804
Preference shareholders 6 377 7 249 14 147
Equity holders of the parent 57 688 42 975 87 506
Total comprehensive income for the
period 66 518 51 019 103 457
Consolidated statement of changes in equity
31 Dec 31 Dec 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Opening total shareholders` equity 1 108 871 1 063 900 1 063 900
Total comprehensive income for the
period 66 518 51 019 103 457
Profit for the period 61 249 60 527 113 853
Other comprehensive income for the
period
Foreign currency translation reserve 32 560 (28 031) (25 163)
Hedging reserve (27 291) 17 891 14 432
Available-for-sale reserve - 632 335
Transactions with owners recorded
directly in equity
Movement in non-controlling interest 9 247 (1 814) (1 579)
Issue of ordinary shares - 1 390 1 391
Share-based payments reserve movements
- (220) (221)
Preference share dividend (6 377) (7 249) (14 147)
Ordinary share dividend (22 288) (28 040) (43 930)
Closing balance 1 155 971 1 078 986 1 108 871
Condensed headline earnings reconciliation
31 Dec 31 Dec 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Earnings are determined as follows:
Earnings attributable to equity holders
of the parent 52 419 52 483 98 013
Headline adjustable items 37 50 (2 402)
Loss on sale of property and equipment 37 50 11
Gross 51 70 15
Tax impact (14) (20) (4)
Revaluation of investment property - - (2 413)
Headline earnings 52 456 52 533 95 611
Headline earnings per ordinary share
(cents) 163 163 297
Condensed segmental analysis
31 Dec 31 Dec 30 June
2011 2010 2011
Unaudited Unaudited Audited
R`000 R`000 R`000
Segment Results
Business Banking 42 546 37 688 88 775
Capital 2 725 11 420 3 235
Treasury 674 3 389 5 142
Wealth Management 11 741 9 341 18 479
Commercial Solutions 8 318 2 838 6 287
Group (4 755) (4 149) (8 065)
Profit for the period 61 249 60 527 113 853
Segment Revenue
Business Banking 238 809 208 737 442 293
Capital 38 271 47 536 73 453
Treasury 76 651 64 273 131 694
Wealth Management 61 628 56 622 113 008
Commercial Solutions 56 173 34 010 67 479
Group and Inter-segment
eliminations (36 793) (24 214) (111 035)
Total segment revenue 434 739 386 964 716 892
Segment Assets
Business Banking 2 908 487 2 679 057 2 744 334
Capital 560 647 550 100 550 840
Treasury 2 328 762 1 516 886 1 605 975
Wealth Management 214 030 213 575 248 346
Commercial Solutions 224 896 116 380 117 958
Group and Inter-segment
eliminations (1 003 520) (985 772) (894 189)
Total segment assets 5 233 302 4 090 226 4 373 264
Segment Liabilities
Business Banking 2 599 370 2 386 457 2 447 481
Capital 501 836 487 216 505 098
Treasury 2 329 771 1 515 285 1 602 800
Wealth Management 122 769 114 097 169 242
Commercial Solutions 121 415 66 163 51 215
Group and Inter-segment
eliminations (1 597 830) (1 557 978) (1 511 443)
Total segment liabilities 4 077 331 3 011 240 3 264 393
Acquisition of subsidiary
During the period under review, Sasfin acquired a controlling equity stake in
IQuad Group Limited ("IQuad"), a diversified group of specialist financial and
business services companies listed on the AltX of the jse.
Sasfin is seeking to add complementary services for its clients through the
acquisition of businesses complementary to Sasfin`s non-banking activities.
Significant cross-selling opportunities exist within the broader Sasfin Group in
terms of both potential corporate and private clients. IQuad has a solid track
record in performance and has proven systems and procedures in place to take
advantage of Sasfin`s networks to grow the existing businesses of both Sasfin
and IQuad.
Acquisition of shares in IQuad:
Purchase
Number of % Cost per consideration
Date shares acquired share R`000
Friday, 9 September 2011 12 042 344 42,9 2,57 30 949
Wednesday, 16 November 2011 2 290 000 8,2 2,57 5 885
Effective control gained 14 332 344 51,1 2,57 36 834
Friday, 2 December 2011 4 880 472 17,3 2,57 12 543
Total investment 19 212 816 68,4 2,57 49 377
Sasfin Group executive directors have been appointed to the board of IQuad with
Tyrone Soondarjee assuming the role as non-executive chairman. From the date of
control, the results of IQuad have been consolidated and are reflected under the
Commercial Solutions segment.
The following summarises the major classes of assets acquired and liabilities
assumed at the acquisition date:
Fair value of identifiable assets and liabilities at the date of control
R`000
Investment property 14 434
Property, plant and equipment 14 445
Intangible assets 4 881
Trade and other receivables 40 504
Cash and cash equivalents 9 163
Trade and other payables (36 677)
Fair value of net assets acquired 46 750
Goodwill on acquisition of control
In terms of the fair value of the net assets acquired, goodwill of R12,9 million
arose on acquisition. The goodwill is mainly attributable to the intellectual
property of IQuad and the synergies expected from the existing customer base of
IQuad through increased cross selling. Goodwill will be assessed annually for
impairment in accordance with Sasfin`s accounting policy. Goodwill is a non-
deductable tax item.
R`000
Fair value of net assets acquired 46 750
Total consideration transferred 36 834
Sasfin`s 51,1% share of net assets acquired (23 889)
Goodwill on acquisition 12 945
Non-controlling interest R`000
Non-controlling interests, based on their proportionate
interest (48,9%) in the fair value of recognised assets and
liabilities 22 861
Further acquisition of 17,3% by Sasfin (12 543)
Non-controlling interest 10 318
Acquisition-related costs
The Group incurred acquisition-related costs of R1,2 million related to external
fees and due diligence costs. These costs have been recognised in administrative
expenses in the Group`s consolidated statement of comprehensive income.
Commentary
Nature of business
Sasfin 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 outlook, in particular the Eurozone, remained volatile
and uncertain throughout the period under review. The fears of sovereign
default and the resulting contagion therefrom affected domestic markets
materially. Unemployment levels remained stubbornly high with increased
levels of consumer debt.
* The banking sector, whilst resilient, appeared sluggish with the demand for
credit being mixed and subdued in most areas.
* Sasfin continued on its growth trajectory in its core business activities.
Total assets grew by 28% to R5,3 billion year on year, underpinned by
further solid growth in the Business Banking division, where loans and
advances reached R2,7 billion, a 15% increase over the corresponding period
of 2010, and a much healthier cash and liquid assets position with funds in
excess of R1,3 billion.
* In line with its strategy to broaden and strengthen its non-banking
activities, the Group acquired a 68,4% majority stake in Business and
Financial Services listed company, IQuad, in November 2011. The primary
driver for this acquisition was to expand the Group`s service and product
offering and leverage off IQuad`s client base.
Financial overview
* The Group`s headline earnings of R52,5 million (2010: R52,5 million)
reflects a benign performance over 2010, with headline earnings per share
at 163 cents (2010: 163 cents). The drop in earnings of R8,7 million in the
Capital division and R2,7 million in the Treasury division largely
contributed to the flat earnings for the period.
* The Treasury division reflected a decrease in earnings due to higher
funding costs, whilst the Capital division`s results were negatively
affected by further impairments and writedowns in its private equity
portfolio.
* The Business Banking division delivered a good set of results, with
earnings for the period of R42,5 million (2010: R37,7 million), an increase
of 13%. These results were positively impacted by the 15% growth in the
lending book, margin retention and lower impairment charges.
* Credit impairment losses continued a downward trend, with the annualised
credit loss ratio at a Group level decreasing to 1,2% on average loans and
advances from 1,6% in 2010, whilst the credit loss ratio for the Business
Banking division decreased to 0,6% from 0,7% in 2010.
* Group costs reflect a 15% increase over 2010, largely due to the cost base
of IQuad, which has been consolidated into the Group results from November
2011. Excluding this cost base, costs have increased marginally above
inflation due to increased depreciation and amortisation costs.
* The changes implemented in the Wealth Management segment are contributing
favourably to Group earnings. Earnings for the period showed a growth of
26%, driven primarily by increased trading volumes and improved fee income.
* The Risk and Logistics division which has been re-branded as Commercial
Solutions, is gaining momentum following the acquisition of IQuad, and
showed a meaningful contribution to Group profits of R8,3 million (2010: R3
million.
* The restructured Capital division is returning to profitability following
the change in the business model in the Private Equity and Property Private
Equity units. As stated previously, the Group is exiting and realising
certain investments and progress has been made in this regard. In addition
to this, the Group has entered into a strategic relationship with Annuity
Properties Limited, a property fund to be listed, with the intention of
disposing of its owner-occupied Head Office building to this fund, and
simultaneously acquiring a 25% stake in its asset management company.
Accordingly, the Group is in the process of exiting its current property
private equity portfolio. The Corporate Finance unit which is incorporated
under the Capital division remains profitable, with some significant
mandates under its belt.
Statement of financial position and capital management review
* The Group`s deposit and funding continued to grow, with an improved deposit
mix and maturity profile. Deposits grew by 27% to R1,7 billion from R1,3
billion in 2010.
* As previously announced, Sasfin Bank Limited ("the Bank") successfully
concluded a seven-year Euro35 million term loan from three European
Development Finance Institutions in December 2011, further strengthening
and diversifying its funding base, and its ability to meet the stringent
Basel III liquidity standards to be pronounced shortly.
* Sasfin`s securitisation vehicle, a leader in its market, continues to
perform well and has re-financed R1,348 billion of notes at favourable
terms in the 2011 calendar year.
* The Group maintains comfortable levels of capital and at 31 December 2011,
its statutory risk-weighted capital adequacy ratio was 29% (2010: 28%) and
that of the Bank 25% (2010: 22%), which are well above the prescribed
regulatory requirements.
Prospects
* Sasfin is well positioned as a banking and financial services Group
focusing on the entrepreneurial market, and based on prevailing market
conditions, the Group expects to see improved levels of business activity
in the second half of the financial year.
* Sasfin is poised for future growth in its target markets, following the
significant strategic initiatives and investments made in prior years, and
its strong brand equity.
Basis of preparation and presentation of interim financial statements
The condensed unaudited interim consolidated financial statements have been
prepared in accordance with IAS 34 - "Interim Financial Reporting" and the
requirements of the Companies Act of South Africa and in compliance with the JSE
Listings Requirements and the accounting policies applied conform to
International Financial Reporting Standards and the AC500 series. The same
accounting policies and methods of computation are followed in the interim
financial statements as compared to the 2011 annual financial statements. There
are no material events subsequent to the end of the interim period, other than
the disposal of the Group`s fixed property to Annuity Properties Limited.
In terms of S29(1)(e)(ii) of the Companies Act, it is confirmed that the
preparation of these financial statements is done under the supervision of
Tyrone Soondarjee CA(SA), financial director of the Group.
Preference share dividend
Notice is hereby given that preference dividend number 15 amounting to 340,27
cents (2010: 362,05 cents) per preference share ("preference dividend") has been
declared for the six months ended 31 December 2011 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, 30 March 2012.
The salient dates relating to the preference dividend are as follows:
Last day to trade cum the preference dividend Friday, 23 March 2012
Preference shares commence trading ex the Monday, 26 March 2012
preference dividend
Preference dividend record date Friday, 30 March 2012
Payment of preference dividend Monday, 2 April 2012
Preference shares may not be dematerialised or rematerialised between Monday,
26 March 2012 and Friday, 30 March 2012, 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 49 cents
(2010: 49 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, 13 April 2012.
The salient dates relating to the interim ordinary dividend are as follows:
Last day to trade cum the interim ordinary
dividend Wednesday, 4 April 2012
Ordinary shares commence trading ex interim
ordinary dividend Thursday, 5 April 2012
Ordinary share dividend record date Friday, 13 April 2012
Payment date of interim ordinary dividend Monday, 16 April 2012
Ordinary share certificates may not be dematerialised or rematerialised between
Thursday, 5 April 2012 and Friday, 13 April 2012, both days inclusive.
Changes to the board and company secretariat
Mr Malcolm Segal retired as an executive director of the Company and the Bank
on 31 October 2011, but remained on both boards as a non-executive director.
Mr Howard Brown was appointed as Group Company Secretary with effect from
26 August 2011.
For and on behalf of the Board
CN Axten RDEB Sassoon
Chairman Chief Executive Officer
7 March 2012
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
Websites: www.sasfin.com
www.sfpsecurities.com
Independent Non-Executive Chairman
CN Axten#
Executive Directors
RDEB Sassoon* (Chief Executive Officer), TD Soondarjee (Financial Director)
* British
Non-Executive Directors
RC Andersen#, ETB Blight#, GC Dunnington#, DD Mokgatle#, J Moses#, MS Rylands,
M Segal # Independent
Company Secretary
H Brown
Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Lead Sponsor
KPMG Services (Pty) Limited
Joint Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Corporate Law Advisors
Edward Nathan Sonnenbergs Inc.
Disclaimer
The Group has in good faith made reasonable effort to ensure the accuracy and
completeness of the information contained in this document, including all
information that may be regarded as "forward-looking statements".
Forward-looking statements may be identified by words such as "believe",
"anticipate", "expect", "plan", "estimate", "intend", "project", "target".
Forward-looking statements are not statements of fact, but statements by the
management of the Group based on its current estimates, projections,
expectations, beliefs and assumptions regarding the Group`s future performance
and no assurance can be given to this effect.
The risks and uncertainties inherent in the forward-looking statements contained
in this document include but are not limited to changes to IFRS and the
interpretations, applications and practices subject thereto as they apply to
past, present and future periods; domestic and international business and market
conditions such as exchange rate and interest rate movements; changes in the
domestic and international regulatory and legislative environments; changes to
domestic and international operational, social, economic and political risks;
and the effects of both current and future litigation.
The Group does not undertake to update any forward-looking statements contained
in this document and does not assume responsibility for any loss or damage and
howsoever arising as a result of the reliance by any party thereon, including,
but not limited to, loss of earnings, profits or consequential loss or damage.
Date: 07/03/2012 10:20:02 Produced by the JSE SENS Department.
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