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Sabvest Limited - Audited results for the year ended 31 December 2003
Sabvest Limited
Registration number 1987/003753/06
ISIN number: ZAE000006417 - ordinary shares
ISIN number: ZAE 000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
("Sabvest")
Audited results for the year ended 31 December 2003
Balance sheet
at 31 December 2003
2003 2002
R"000 R"000
Ordinary shareholders" equity 131 495 139 037
Interest-bearing debt 5 852 10 888*
Accounts payable 1 494 2 635
Total funds 138 841 152 560
Fixed assets 1 202 934
Deferred taxation 724 -
Investment holdings 122 563 130 016
Listed 18 494 10 664
Unlisted 100 405 115 362
Net goodwill on acquisition of
associates 3 664 3 990
Finance advances and receivables 13 693 20 681
Cash balances 659 929
Total assets 138 841 152 560
Net asset value per share - cents 292 307
Net tangible asset value per
share - cents 283 299
Net asset value per share with listed
investments at market value - cents 296 307
Net asset value per share at directors"
valuation - cents 349 375
Number of shares in issue less held in
treasury - 000"s 45 109 45 217
*Includes interest-bearing vendor claim of R9 025 000.
Income statement
for the year ended 31 December 2003
2003 2002
R"000 R"000
Gross income from operations and
investments 31 217 31 062
Dividends received 2 048 1 674
Interest received 5 720 3 270
Fees and other income 2 658 2 722
Share of equity accounted retained
income 20 791 23 396
Interest paid 2 191 3 528
Net income from operations and
investments 29 026 27 534
Less: Expenditure 7 402 6 339
Operating costs 6 961 5 946
Depreciation 441 393
Net income before exceptional items 21 624 21 195
Exceptional (losses) - group (2 656) (112)
Exceptional gains/(losses)
- associates (1 606) 1 331
Net gains/(losses/costs) arising
from former finance operations 7 (6 296)
Amortisation/Write-off of goodwill (1 478) (237)
Investment impairment recoveries/
(provisions) - 100
Net income before taxation 15 891 15 981
Taxation - deferred (724) -
Net income 16 615 15 981
Headline earnings per share
- cents*1 +16,5% 49,5 42,5
Earnings per share - cents*1 36,8 34,5
Weighted average number of shares in
issue - 000"s 45 144 46 320
*1There are no diluting instruments.
Reconciliation of headline earnings
Net income 16 615 15 981
Headline earnings adjustment*2 5 733 3 714
Headline earnings 22 348 19 695
*2The headline earnings adjustment is calculated as the total of exceptional
items.
Summarised cash flow statement
for the year ended 31 December 2003
2003 2002
R"000 R"000
Cash (utilised in) operating
activities (1 571) (2 908)
Cash (utilised) for reduction in
creditors (1 141) (2 300)
Cash generated by investing
activities 7 719 26 469
Cash effects of financing activities (241) (2 666)
Change in cash and cash equivalents 4 766 18 595
Interest-bearing debt, less cash balances,
at beginning of year (9 959) (28 554)
Interest-bearing debt, less cash balances,
at end of year (5 193) (9 959)
Statement of changes in equity
for the year ended 31 December 2003
Non-
distri- Distri-
Share Share butable butable
capital premium reserve reserve Total
R"000 R"000 R"000 R"000 R"000
Balance as at 31/12/01 880 52 160 92 195 (7 057) 138 178
Shares held in treasury
- written back 6 937 943
Shares held in treasury
- cancelled (17) (2 187) (2 204)
Shares held in treasury (6) (1 864) (1 870)
Translation of foreign
subsidiary/associates (11 806) (11 806)
Variation of interest in
subsidiary/associates 465 465
Attributable income
of associates 7 419 (7 419) 0
Movement in translation
reserves of associates (650) (650)
Net profit for the year 15 981 15 981
Balance as at 31/12/02 863 49 046 87 623 1 505 139 037
AC133 adjustment (9 938) (9 938)
Shares held in treasury
- written back 6 1 864 1 870
Shares held in treasury (7) (2 104) (2 111)
Translation of foreign
subsidiary/associates (5 978) (5 978)
Attributable income
of associates 15 184 (15 184) -
Movement in translation
reserves of associates (8 000) (8 000)
Net profit for the year 16 615 16 615
Balance as at 31/12/03 862 48 806 88 829 (7 002) 131 495
Asset profile*
at 31 December 2003
Date Number Carrying
Sabvest first Listed/ of Economic value
Company invested Unlisted shares interest R"000
Sabvest industrial 99 443
Flowmax Holdings
Limited (BVI/UK) 1997 U 40% 15 204
Nutritional Foods
(Pty) Limited 1989 U 40% 8 706
SA Bias Industries
Limited 1988 U 50% 61 642
Set Point Technology
Holdings Limited 2000 L 50 000 000 21% 13 871
Sabvest distribution
& services 11 562
Korbitec Holdings
(Pty) Limited 1999 U 17% 5 269
Midsouth Distributors
(Pty) Limited 1997 U 30% 1 612
Primeserv Group Limited 1999 L 20 000 000 16% 4 623
Other 58
Sabvest investments 11 578
Investment loans 10 578
Preference Shares 1 000
Total investments per
balance sheet 122 563
Finance advances and receivables 13 693
Cash on hand 659
Deferred taxation 724
Fixed assets 1 202
Gross assets 138 841
*Investment loans and finance advances are reflected net of AC133 adjustments.
Commentary
Profile
Sabvest is an investment holding company which has significant minority or joint
controlling interests in two listed and five unlisted groups on all of whose
boards it is represented. Sabvest"s ordinary and `N" ordinary shares are quoted
in the Financials - Investment Company sector of the JSE Securities Exchange
South Africa.
Headline earnings
Headline earnings increased by 16,5% to 49,5 cents per share. Most of the
increase in earnings is attributable to the effects of the introduction of
AC133. The maintenance of earnings on a comparable basis with the previous year
is satisfactory in light of the significant reduction in the rand translated
earnings of associates and reduced export margins compared with prior periods.
The strong rand has also resulted in currency translation losses which, together
with a charge to opening reserves arising from the implementation of AC133, are
reflected in the statement of changes in equity.
Sabvest"s balance sheet remains conservatively structured and the cash component
of attributable income is increasing.
Audit opinion
The accompanying summarised financial statements of Sabvest have been derived
from the annual financial statements of the group for the year ended 31 December
2003. These annual financial statements have been audited by Messrs Deloitte &
Touche and their unqualified reports on the summarised and annual financial
statements are available at Sabvest"s registered office.
Accounting policies
The results for the year have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and AC127. The accounting
policies used are consistent with those in the previous financial year other
than the introduction of accounting standard AC133 with effect from 1 January
2003.
Changes in investment holdings
The group has:
- Disposed of its interests in Flowmax Investments (Pty) Limited in South
Africa to Set Point Technology Holdings Limited;
- Increased its investment in Set Point to 50 million shares.
Expansion activities have been undertaken by a number of the businesses in
which Sabvest is invested. Most significant was the increase of the holding
of SA Bias from 55% to 88% in global label manufacturer International
Trimmings and Labels plc (ITL) in the UK. ITL has in turn expanded its
international manufacturing operations to a further two countries - Turkey
and China. Flowmax Holdings concluded two acquisitions in the UK -
Industrial Flow Controls and Action Hose.
Strategic focus
Sabvest is concentrating on assisting its existing investees in the growth of
their operations and is once again responsive to new investment opportunities.
Continued emphasis is being given to increasing the level of cash earnings paid
to Sabvest.
Dividend policy
Dividend payments are considered annually and may vary or be waived depending on
the group"s cash requirements. The extent of dividends will be influenced by
operating cash flows and receipts from the non-core components of long-term
investments that are not earmarked for new projects.
Sabvest is now resuming dividend payments and hopes to re-establish its previous
record as a consistent payer of cash dividends.
Dividend declaration
Notice is hereby given that a dividend of 3 cents (2002: nil) per ordinary and
"N" ordinary share for the twelve months ended 31 December 2003 has been
declared payable to shareholders in accordance with the undermentioned
timetable:
Last date to trade cum-dividend Friday, 26 March 2004
Trading ex-dividend commences Monday, 29 March 2004
Record date Friday, 2 April 2004
Dividend payment date Monday, 5 April 2004
Share certificates may not be dematerialised or rematerialised between Monday,
29 March 2004 and Friday, 2 April 2004, both days inclusive.
Legal actions and contingencies
- There has been no change in the status of the legal actions referred to in
notes 16.1 and 16.2 of the 2002 annual report. Sabvest and its legal
advisors do not expect any liability to arise from these actions.
- The group is actively seeking recovery of some of the losses and defending
its rights, where appropriate, arising from former finance operations.
Prospects
Sabvest expects a moderate improvement in headline earnings per share in the
year ahead.
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman Chief Executive CFO
11 March 2004
Sandton
Registered address: 46A Wierda Road West, Wierda Valley, Sandton 2196
Communications: Postal address: PO Box 78677, Sandton 2146, Republic of South
Africa.
Telephone: (011) 784 7932
Fax: (011) 784 7941
Website: ho@sabvest.com
Transfer secretaries:
Computershare Limited, 70 Marshalltown 2001. (PO Box 61051, Marshalltown 2001).
Directors: H Habib (Chairman), P Coutts-Trotter (Deputy Chairman), CS Seabrooke*
(Chief Executive), NSH Hughes, GE Nel, R Pleaner*, RS Price
*Executive Director
Date: 10/03/2004 05:15:06 PM Produced by the JSE SENS Department
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