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SBV SVN
SBV
SBV / SVN - Sabvest - Unaudited Interim Results For The Six Months Ended
30 June 2007 and dividend declaration
Sabvest Limited
"Sabvest"
Registration number 1987/003753/06
ISIN: ZAE000006417 - ordinary share
ISIN: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007
Balance sheet at 30 June 2007
Unaudited Unaudited Audited
30 June 2007 30 June 2006 31 Dec 2006
R`000 R`000 R`000
Non-current assets 274 981 186 440 238 554
Property, plant and
equipment 1 595 2 152 1 787
Deferred tax asset 3 182 5 105 2 778
Share trust receivables 3 332 2 880 3 090
Investment holdings 266 872 176 303 230 899
Associates* 183 878 163 303 175 838
Long-term investments 82 994 13 000 55 061
Current assets 51 743 32 406 57 406
Finance advances and
receivables 9 441 26 473 13 721
Short-term investments - - 2 550
Cash balances 42 302 5 933 41 135
Total assets 326 724 218 846 295 960
Ordinary shareholders`
equity 305 056 209 220 279 371
Non-current liability 5 397 49 3 338
Deferred tax liability 5 397 49 3 338
Current liabilities 16 271 9 577 13 251
Interest-bearing debt 11 052 6 239 7 615
Accounts payable 5 219 3 338 5 636
Total equity and
liabilities 326 724 218 846 295 960
Net asset value per
share - cents 659 452 604
Net tangible asset value
per share - cents 652 445 596
Net asset value per share
with listed investments in
associates at market
value - cents 716 518 656
Net asset value per share
with investments in associates
at directors` valuation
(intrinsic value) - cents 956 633 905
Number of shares in issue
less held in
treasury - 000`s 46 275 46 275 46 275
*Includes goodwill of R3,4 Million (30 June 2006: R3,4 million)
Income statement for the six months ended 30 June 2007
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
R`000 R`000 R`000
Gross income from
operations and investments 41 629 24 842 108 715
Dividends received 8 662 3 885 8 498
Interest received 3 716 3 185 7 827
Income on financial
instruments and shares 340 2 710 37 156
Fees and sundry income 834 1 323 6 386
Fair value adjustment to
investments 20 108 1 776 22 429
Equity accounted retained
income of associates 7 969 11 963 26 419
Share of net income of
associates 16 040 15 726 34 640
Less: Dividends received (8 071) (3 763) (8 221)
Direct transactional costs - - 4 452
Impairments 1 106 - 1 000
Interest paid 739 474 1 594
Net income before expenses
and exceptional items 39 784 24 368 101 669
Less: Expenditure 7 292 5 539 11 759
Operating costs 7 090 5 307 11 296
Depreciation 202 232 463
Exceptional items
- losses/(gains) 2 572 (512) (1 256)
Net income before taxation 29 920 19 341 91 166
Taxation - deferred 1 656 (347) 5 269
Net income for the period
attributable to equity
shareholders 28 264 19 688 85 897
Earnings per share - cents 61,1 42,6 185,6
Dividends per share - cents
(proposed after
interim/year-end) 3,0 2,0 12,0
Weighted average number of
shares in issue - 000`s 46 275 46 268 46 272
Headline earnings per
share - cents*1 66,6 41,2 182,7
Reconciliation of headline
earnings
Net income for the period 28 264 19 688 85 897
Exceptional gains - group - (117) (117)
Exceptional losses/(gains)
- associates 2 000 (440) (1 505)
Losses/costs arising from
former finance operations 572 45 366
Profit on sale of fixed assets - (91) (91)
Headline earnings for the
period 30 836 19 085 84 550
*1 There are no diluting instruments
Summarised cash flow statement
for the six months ended 30 June 2007
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
R`000 R`000 R`000
Cash generated by
operating activities 3 332 4 971 47 783
Cash (utilised in)/generated
by investing activities (974) 2 679 (5 381)
Cash effects of financing
activities - 66 66
Cash utilised for the
payment of dividends (4 628) (2 777) (3 703)
Change in cash and cash
equivalents (2 270) 4 939 38 765
Interest-bearing debt,
less cash balances, at
beginning of period 33 520 (5 245) (5 245)
Interest-bearing debt,
less cash balances, at
end of period 31 250 (306) 33 520
Statement of changes in equity
for the six months ended 30 June 2007
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
1 January 2006 867 50 826 126 980 2 260 180 933
Net income for
the year - - - 85 897 85 897
Translation of foreign
subsidiary/associates - - 2 193 - 2 193
Attributable income
of associates - - 21 870 (21 870) -
Movement in translation
and other reserves
of associates - - 14 023 - 14 023
Shares held in treasury
- written back 2 84 - - 86
Shares held in
treasury (2) (56) - - (58)
Dividends paid - - - (3 703) (3 703)
Balance as at
31 December 2006 867 50 854 165 066 62 584 279 371
Net income for
the period - - - 28 264 28 264
Translation of foreign
subsidiary/associates - - 283 - 283
Attributable income
of associates - - 5 969 (5 969) -
Movement in translation
and other reserves
of associates - - 1 766 - 1 766
Dividends paid - - - (4 628) (4 628)
Balance as at
30 June 2007 867 50 854 173 084 80 251 305 056
Contingent liabilities and legal actions
The group`s contingent liabilities at 30 June 2007 are as follows:
1. Guarantees or undertakings on behalf of investees or clients
R5,4 million (31 December 2006: R7,2 million).
2. Put options given by the company to holders of SA Bias
redeemable preference shares which have due dates from 2008 to
2009 R9 million (31 December 2006: R14 million).
3. Put options given by the company to holders of SA Bias junior
loans which have due dates from 2008 to 2010 R7,2 million (31
December 2006: R9,2 million).
4. The group has rights and obligations in terms of shareholder
or purchase and sale agreements relating to its present or
former investments.
5. A group company has entered into lease agreements for premises
that it occupies. The amount due in years 1-2 is R1,4 million.
6. A group company has given call options with regard to the
group`s shareholding in Metrofile Holdings Limited, which are
exercisable under certain circumstances until 2009.
7. There has been no change in the group`s assessment of the
various legal actions arising from the disposal of a
subsidiary in 1993 as explained in the 2002-2006 annual
reports. The group and its legal advisors remain of the view
that no losses will be incurred from these actions. The costs
of responding to the actions are expensed annually as
incurred.
COMMENTARY
Profile
Sabvest is an investment and finance group. Its ordinary and "N" ordinary
shares are quoted in the Financials - Equity Investment Instruments sector of
the JSE Limited.
Sabvest has significant minority or joint controlling interests in five groups
which are accounted for as associates. Sabvest also has a long-term portfolio
of other investments which are accounted for on a fair value basis.
These are:
Voting Economic
Listed/ Number interest interest
Unlisted of shares % %
Associates
Flowmax Holdings
Limited (BVI/UK) U 40,0 40,0
Korbitec Holdings
(Pty) Limited U 16,2 16,2
S A Bias Industries
(Pty) Limited U 50,0 56,2
Set Point Technology
Holdings Limited L 50 000 000 14,8 14,8
Sunspray Food
Ingredients (Pty) Ltd U 47,5 47,5
Long-term investments
Datatec Limited L 500 000
Massmart Holdings Limited L 400 000
Metrofile Holdings Limited L 21 182 646
In addition, Sabvest maintains finance advances and debt instrument portfolios
and undertakes corporate finance and other fee and Profit earning activities.
Financial results
Sabvest`s performance in the first six months was excellent and ahead of
projections. Headline earnings per share increased by 61% to 66 cents per
share and interim dividends by 50% to 3 cents per share. Other than Set Point
Technologies, all of the group`s associates and investments performed well.
The repositioning and management changes at Set Point are almost complete and
Sabvest expects that Set Point will return to sound levels of profitability in
the second half of 2007.
A substantial portion of the increase in earnings arose from fair value
adjustments to the group`s portfolio of listed shares (net of deferred tax).
This method of accounting, which is required by IFRS, will make Sabvest`s
earnings more volatile than in the past as the effect on earnings derives from
share price performance and not necessarily the earnings performance of the
investments.
Intrinsic value per share increased to 956 cents per share. This value at the
interim date reflects a lower increase than that expected for the year as a
whole as investments in unlisted associates are only revalued annually and the
adjustment to these at the interim stage comprises the relevant share of
retained earnings only.
Shareholders` funds with investments at intrinsic value increased to R442,4
million at the interim reporting date.
Changes in investment holdings
During the period, Sabvest:
- increased its investment in Massmart Holdings Limited to
400 000 shares; and
- increased its interest in Sun Spray Food Ingredients (Pty)
Limited to 47,5%.
Subsequent to the reporting date, Sabvest has acquired a 45% interest in Ridge
Empowerment Capital (Pty) Limited ("REC") - a subsidiary of Mineworkers
Investment Company (Pty) Limited. A number of new investments are presently
being investigated as possible transactions to be proposed to the board of REC
and also for Sabvest itself directly.
Dividend policy
The extent of dividends is influenced by Sabvest`s own operating cash flows
and receipts from investments that are not earmarked for new projects.
It is the group`s policy to consider dividends twice annually. The interim
dividend has been increased by 50% to 3 cents per share.
Accounting policies
The unaudited interim financial statements have been prepared in terms of
International Financial Reporting Standards (IFRS) and comply with IAS34 -
Interim Financial Reporting. The accounting policies used are consistent with
those applied to the audited financial statements for the year ended 31
December 2006.
Directorate
We are pleased to welcome Mr Carl Coutts-Trotter who joins the board as an
executive director as advised to shareholders in the SENS announcement dated
29 June 2007.
Mr Coutts-Trotter (32), B.Bus.Sc (Actuarial Science), F.A.S.S.A., F.I.A. (UK),
was previously with the Old Mutual group for nine years and is returning to
South Africa after a period as Vice-President and Deputy Chief Actuary of Old
Mutual USA.
Prospects
The group`s associates and investments are performing well and Set Point is
expected to resume profitability in the coming period. If the group concludes
the new investments currently being considered, Sabvest should be fully
invested by the end of the financial year.
Sabvest`s 2006 results included a number of substantial one-off profits in the
second half of 2006 and which are not expected to be repeated in 2007.
Accordingly, Sabvest anticipates recording lower headline earnings per share
and earnings per share in 2007 than in the prior exceptional year. However,
intrinsic value per share and dividends per share are expected to increase.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman Chief Executive CFO
30 July 2007
Sandton
Dividend declaration
Notice is hereby given that a dividend of 3 cents (2006: 2 cents) per ordinary
share and "N" ordinary share for the six months ended 30 June 2007 has been
declared payable to shareholders in accordance with the undermentioned
timetable:
Last date to trade "CUM" dividend Friday, 17 August 2007
Trading "EX" dividend commences Monday, 20 August 2007
Record date Friday, 24 August 2007
Dividend payment date Monday, 27 August 2007
No dematerialisation or rematerialisation of share certificates will be
allowed for the period from Friday, 17 August 2007 to Friday, 24 August 2007,
both days inclusive.
Registered address: 4 Commerce Square, 39 Rivonia Road, Sandhurst, Sandton
2196
Communications: Postal address: PO Box 78677, Sandton 2146, Republic of South
Africa
Communications: Telephone: (011) 268 2400
Fax: (011) 268 2422
e-mail: ho@sabvest.com
Website: www.sabvest.com
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited, 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
Date: 30/07/2007 08:45:01 Produced by the JSE SENS Department.
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