| Tue 30 Jul 2013, 10:52 | | SABVEST LIMITED - Unaudited interim results for the six months ended 30 June 2013 and cash dividend declaration |
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SBV SVN 201307300025A
Unaudited interim results for the six months ended 30 June 2013 and cash dividend declaration
SABVEST LIMITED
Incorporated in the Republic of South Africa
Registration number 1987/003753/06
Sabvest or the group or the company
ISIN: ZAE000006417 ordinary shares
ISIN: ZAE 000012043 N ordinary shares
Share code: SBV ordinary shares
Share code: SVN N ordinary shares
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013
AND CASH DIVIDEND DECLARATION
HIGHLIGHTS
Headline Earnings per share 120,7 cents increased by 1,0%
Dividends per share 18 cents increased by 50,0%
Net Asset Value per share 1 978 cents increased by 19,0%
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
as at 30 June 2013
Unaudited Unaudited Restated
30 June 30 June 31 Dec
2013 2012 2012
R000 R000 R000
Non-current assets 1 017 076 931 664 975 780
Property, plant and
equipment 943 1 005 971
Deferred tax asset
Share trust receivables 2 886 4 445 2 759
Investment holdings 1 013 247 926 214 972 050
Unlisted investments 752 700 729 500 741 600
Listed investments 260 547 196 714 230 450
Current assets 143 205 30 139 64 304
Finance advances and
receivables 10 122 5 230 22 061
Other financial instruments 9 040
Short-term investments 120 449 12 600 38 489
Cash balances 12 634 3 269 3 754
Total assets 1 160 281 961 803 1 040 084
Ordinary shareholders equity 910 418 767 386 854 652
Non-current liabilities 174 008 157 965 168 776
Interest-bearing debt 40 000 40 000 40 000
Deferred tax liability 134 008 117 965 128 776
Current liabilities 75 855 36 452 16 656
Interest-bearing debt 68 780 29 497 8 697
Portfolio finance 59 921
Other 8 859 29 497 8 697
Accounts payable 7 075 6 955 7 959
Total equity and liabilities 1 160 281 961 803 1 040 048
Net asset value per
share cents 1 978 1 662 1 855
Number of shares in issue
less held in share trust/
treasury 000s 46 023 46 160 46 061
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2013
Unaudited Unaudited Restated
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2013 2012 2012
R000 R000 R000
Cash generated by operating
activities 6 799 6 040 14 806
Cash (utilised in)/generated by
investing activities (48 123) (17 310) 1 900
Cash effects of financing
activities * 59 251 (161) (1 323)
Cash utilised for the payment
of dividends (9 209) (9 234) (14 763)
Change in cash and cash
equivalents 8 718 (20 665) 620
Cash balances, less current
interest-bearing debt excluding
portfolio finance, at beginning
of period (4 943) (5 563) (5 563)
Cash balances, less current
interest-bearing debt
excluding portfolio finance,
at end of period 3 775 (26 228) (4 943)
* Financing activities comprise movements in long-term debt and
portfolio finance.
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2013
Unaudited Unaudited Restated
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2013 2012 2012
R000 R000 R000
Gross income from operations
and investments 75 339 106 683 220 180
Dividends received 20 456 18 185 37 788
Interest received 924 365 739
Income on financial instruments
and shares 5 075 1 150 26 335
Fees and sundry income 632 1 356 2 730
Fair value adjustment to
investments 48 252 85 627 152 588
Direct transactional costs 706 1 284
Impairments (31) (57) (1 279)
Interest paid 2 490 2 606 5 275
Net income before expenses
and exceptional items 72 174 104 134 214 900
Less: Expenditure 11 357 10 784 22 385
Operating costs 11 283 10 735 22 263
Depreciation 74 49 122
Net income before taxation 60 817 93 350 192 515
Taxation deferred 5 232 38 173 50 164
Net income for the period
attributable to equity
shareholders 55 585 55 177 142 351
Translation of foreign
subsidiary/associates 10 061 418 6 868
Total comprehensive income
attributable to equity
shareholders 65 646 55 595 149 219
Earnings per share cents 120,8 119,5 308,6
Dividends per share (proposed
after interim/year-end) cents 18,0 12,0 32,0
Weighted average number of
shares in issue 000s 46 033 46 165 46 126
Headline earnings per
share cents *1 120,7 119,5 308,4
Reconciliation of headline
earnings
Net income for the period 55 585 55 177 142 351
(Profit)/loss on sale of
property, plant and equipment (2) 4 (118)
Headline earnings for the
period 55 583 55 181 142 233
*1 There are no diluting instruments.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
as at 30 June 2013
Non-
distri- Disti-
Share Share butable butable
capital premium reserves reserve Total
R000 R000 R000 R000 R000
Balance as at
1 January 2012 857 49 296 4 489 666 878 721 520
Total comprehensive
income for the
year 6 868 142 351 149 219
Loss in share trust (2) (2)
Shares held
in treasury (7) (2 577) (2 584)
Shares held in
treasury written
back 7 1 255 1 262
Shares held in
share trust (3) (2 778) (2 781)
Shares held in
share trust
written back 3 2 778 2 781
Dividends paid (14 763) (14 763)
Balance as at
31 December 2012 857 47 974 11 355 794 466 854 652
Total comprehensive
income for
the period 10 061 55 585 65 646
Loss in share trust
written back 2 2
Loss in share trust (2) (2)
Shares held in
treasury (7) (3 248) (3 255)
Shares held in
treasury written
back 7 2 577 2 584
Shares held in
share trust (3) (2 778) (2 781)
Shares held in share
trust written
back 3 2 778 2 781
Dividends paid (9 209) (9 209)
Balance as at
30 June 2013 857 47 303 21 416 840 842 910 418
Contingent liabilities
1. The group has rights and obligations in terms of
shareholder and purchase and sale agreements relating to its
present and former investments.
2. Commitments for the lease of premises are as follows:
Year 1 R897 000
Year 2 R978 000
Years 3 to 4 R2 122 000
INVESTMENT HOLDINGS
as at 30 June 2013
Economic Fair
interest value
% R000
Unlisted Industrial Investments
SA Bias Industries (Pty) Ltd* 57,3
Set Point Group (Pty) Ltd 49,9
Sunspray Food Ingredients (Pty) Ltd 46,1
752 700
* Voting interest 48,5%
Listed Long-term Investments Ordinary shares
Brait S.E. 1 513 654 62 665
Corero Network Security Plc 2 500 000 5 286
Datatec Limited 700 000 38 563
Metrofile Holdings Limited 27 571 496 130 965
Net1 UEPS Technologies Inc 211 884 15 256
Transaction Capital Limited 1 200 000 7 812
260 547
Long-term Investment Holdings 1 031 247
Short-term Foreign Portfolio
shares 68 256
bonds 52 193
120 449
TOTAL HOLDINGS 1 133 696
COMMENTARY
PROFILE
Sabvest is an investment group which has been listed since
1988. Its ordinary and N ordinary shares are quoted in the
Financials Equity Investment Instruments sector of the JSE
Limited.
Sabvest has significant interests in three unlisted industrial
groups, long-term holdings in six listed investments and a
foreign share and bond portfolio, all accounted for on a fair
value basis. In addition, Sabvest makes finance advances, has
debt instrument portfolios and undertakes other fee and profit
earning activities.
Changes in Investment Holdings during the Period
Sabvest:
acquired 2,5m shares in Corero Network Security Plc for
R5,3m (GBP373 000);
increased its foreign share and bond portfolio from R38,5m
to R120,5m ($12,6m);
bought back 20 235 Sabvest ordinary shares and 17 785
Sabvest N ordinary shares for R670 000 through a subsidiary;
and
decreased its investment in Datatec Limited by 0,3m shares
to 0,7m shares realising an amount of R16,9m.
CHANGE IN ACCOUNTING POLICY
As advised to shareholders on SENS on 31 May 2013, with effect
from 1 January 2013 Sabvest accounts for all its investments on
a fair value basis, including unlisted associates which were
previously equity accounted. The 2012 and 2013 figures are
presented on this basis.
FINANCIAL RESULTS
One of the results of the introduction of fair value accounting
for the full investment portfolio and also due to the increased
size of the listed share holdings, Sabvests six monthly
earnings will be more volatile than previously.
Sabvests PAT and HEPS for the period increased marginally to
R56,5m and 120,7 cents respectively. The results were aided by
a lower deferred tax rate relative to the high level of the
previous period which arose from charges relating to previous
periods due to an increase in the CGT rate.
Fair value adjustments were lower due to the exceptional
increase in listed share prices in the prior period and a
reduction in the current valuation of one of the groups
unlisted investments.
Gains on financial instruments of R5,075m arose from share
disposals locally and portfolio realisations internationally.
Shareholders funds increased by 18,6% to R910,4m and net asset
value per share by 19,0% to 1 978 cents per share.
The groups debt levels remain conservative. In South Africa
the group has no net short-term debt and has only a medium-term
loan of R40m. Internationally, borrowings amounted to R59,9m
which are directly utilised to fund the foreign portfolio.
UNLISTED INVESTMENTS
On a look-through basis the unaudited combined revenue of the
three unlisted groups for the six months increased by 24,1% to
R990,6m (2012: R798,3m, which includes the revenue of Flowmax
for the full period) and the PAT for the six months increased
by 20,1% to R88,1m (2012: R72,9m, which includes the PAT for
Flowmax for the full period).
With regard to each unlisted investment:
The international operations of SA Bias Industries through
its International Trimmings and Labels (ITL) and Flowmax Group
divisions performed satisfactorily. Their results were also
enhanced by the weak rand. Its South Arican operations were
affected by the weak domestic economy;
Set Point Group experienced difficult trading conditions and
reported lower results due to the disruptions and weaker levels
of activity in the mining and related industries; and
Sunspray Food Ingredients performed satisfactorily and in
line with expectations.
Unlisted investments are fair valued using the maintainable
earnings (NOPAT) model, multiples of NOPAT between 7 and 7,5
and adjusting for net cash/investments and interest-bearing
debt.
LISTED INVESTMENTS
The five JSE listed investments performed according to
expectations with particularly strong operating performances
from Brait, Metrofile and Transaction Capital. Datatec
experienced weakness in some of its markets but is projecting a
return to profit growth in the current year. Net1s current
results are affected by one-off costs associated with the
implementation of the SASSA tender. The share prices of all
five grew during the period.
Sabvest has made an initial purchase of 2,5m shares in Corero
Network Security Plc which is listed on the AIM market of the
LSE. Subsequent to the reporting date, Sabvest has increased
its holding to 4m shares representing an interest of 4,7% in
Corero.
The Chairman of and largest shareholder in Corero is well known
to Sabvest. Sabvest has invested successfully in a number of
companies with which he has been associated over the years.
Corero is a developer of network security solutions against
distributed denial of service attacks and cyber threats at the
points of connectivity to the internet for cloud data centres
and virtual machine environments. Its next generation product
roadmap targets the integration of key features for competitive
leadership in First Line of Defence solutions including ten
gigabit packet capture and forensics, SSL decryption and
inspection, advanced traffic monitoring and real time behaviour
analysis.
The foreign portfolio is held through a ring-fenced vehicle
capitalised to the extent of $7m and geared only on the
security of the underlying portfolio. Sabvest regards it as a
managed fund and is itself the manager. At the reporting date
it comprised a spread of 16 shares and 8 redeemable or callable
reset bonds. Full details of the portfolio are available on
Sabvests website.
DIVIDENDS
Dividends are determined relative to Sabvests own recurring
cash flows from investments and services and capital receipts
that are not earmarked for new transactions.
Dividends are considered twice annually. The level of cash
generation from the groups investee companies continues to
increase and the group is in a short-term net cash position in
South Africa. Accordingly the dividend for the interim period
has been increased by 50% to 18 cents per share.
As referred to in the dividend declaration, the group has used
STC credits to an extent sufficient for no withholding tax on
dividends to be deducted for any shareholders. After the use of
these credits the company still has credits equal to 312 cents
per share. The ability to use these credits expires on 31 March
2015.
RELATED PARTIES
Related party transactions exist between subsidiaries and the
holding company, fellow subsidiaries and associated companies,
and comprise fees, dividends and interest.
Transactions with directors relate to fees and monies lent to
the group by individuals and companies controlled by the
directors.
ACCOUNTING POLICIES
The unaudited condensed interim financial statements have been
prepared in terms of International Financial Reporting
Standards (IFRS) and comply with IAS 34, Interim Financial
Reporting, the SAICA Financial Reporting Guides issued by the
Accounting Practices Committee and Financial Pronouncements
issued by the Financial Reporting Standards Council, the JSE
Limited Listings Requirements as well as the requirements of
the Companies Act of South Africa and have been supervised by
the CFO, Mr R Pleaner. The accounting policies used are
consistent with those applied to the audited financial
statements for the year ended 31 December 2012, except for the
change in accounting policy described earlier.
PROSPECTS
The groups unlisted investments have sound growth prospects
but in the current period those with South African operations
are under trading pressure in the weak economic climate that
persists. A further negative has been the continued disruption
and the low levels of activity in the mining and associated
industries.
The groups listed investee companies are performing to
expectations. However, the future movement in share prices is
obviously uncertain.
Overall, we anticipate a satisfactory year for the group.
The above forecast information has not been reviewed and
reported on by the groups external auditors.
For and on behalf of the Board
Haroon Habib Christopher
Seabrooke
Chairman Chief executive
Raymond Pleaner
CFO
Sandton
30 July 2013
CASH DIVIDEND DECLARATION
Notice is hereby given than an interim gross cash dividend of
18 cents (2012: 12 cents) per ordinary and N ordinary share,
out of income reserves, for the six months ended 30 June 2013
has been declared.
The issued share capital of the company at the declaration date
is 17 295 984 ordinary and 29 479 854 N ordinary shares. The
income tax number of the company is 9375/105/716.
The company has utilised STC credits amounting to 18 cents per
share. As a result there will be no dividend withholding tax
from the interim dividend for any Sabvest shareholders
including those who are not exempt by definition.
Last date to trade CUM dividend Friday, 16 August 2013
Trading EX dividend commences Monday, 19 August 2013
Record date Friday, 23 August 2013
Dividend payment date Monday, 26 August 2013
No dematerialisation or rematerialisation of share certificates
will be allowed during the period Monday, 19 August 2013 to
Friday, 23 August 2013, both days inclusive.
SABVEST LIMITED
Registered address: 4 Commerce Square, 39 Rivonia Road,
Sandhurst, Sandton 2196
Communications: Postal address: PO Box 78677, Sandton 2146,
Republic of South Africa
Telephone: (011) 268 2400
Fax: (011) 268 2422
e-mail: ho@sabvest.com
Transfer secretaries: Computershare Investor Services (Pty)
Ltd, 70 Marshall Street, Marshalltown 2001
(PO Box 61051, Marshalltown 2107)
Directors: H?Habib# (Chairman), P Coutts-Trotter (Deputy
Chairman), CS Seabrooke* (Chief Executive), CP Coutts-Trotter,
NSH Hughes#, DNM Mokhobo#, GE Nel, R Pleaner*, BJT Shongwe#
*Executive #Independent
Sponsor: Rand Merchant Bank (A division of FirstRand Bank
Limited)
www.sabvest.com
Date: 30/07/2013 10:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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