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SBV
SBV
SBV/SVN - Sabvest Limited - Reviewed Results For The Year Ended 31 December 2007
SABVEST LIMITED
"Sabvest"
Registration number 1987/003753/06
ISIN: ZAE000006417 - ordinary shares
ISIN: ZAE 000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
REVIEWED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
CONDENSED BALANCE SHEET
at 31 December 2007
31 Dec 31 Dec
2007 2006
Reviewed Audited
R`000 R`000
Non-current assets 304 076 234 804
Property, plant and equipment 1 501 1 787
Deferred tax asset 2 545 2 778
Share trust receivables 3 574 3 090
Investment holdings 296 456 227 149
Associates* 219 099 172 088
Long-term investments 77 357 55 061
Current assets 38 350 61 156
Finance advances and receivables 28 700 17 471
Short-term investments - 2 550
Cash balances 9 650 41 135
Total assets 342 426 295 960
Ordinary shareholders` equity 324 786 279 371
Non-current liability 4 645 3 339
Deferred tax liability 4 645 3 339
Current liabilities 12 995 13 250
Interest-bearing debt 7 101 7 615
Accounts payable 5 894 5 635
Total equity and liabilities 342 426 295 960
Net asset value per share - cents 702 604
Net tangible asset value per share - cents 694 596
Net asset value per share with listed
investments in associates at
market value- cents 782 656
Net asset value per share with investments in
associates at directors` valuation
(instrinsic value) - cents** 1 050 862
Number of shares in issue less held
in treasury - 000`s 46 276 46 275
*Includes goodwill of R3,4 million
(31 December 2006: R3,4 million)
**Calculated after deducting CGT payable
should investments be sold at
directors` valuation.
CONDENSED INCOME STATEMENT
for the year ended 31 December 2007
12 months 12 months
31 Dec 31 Dec
2007 2006
Reviewed Audited
R`000 R`000
Gross income from operations
and investments 67 818 108 715
Dividends received 18 729 12 248
Interest received 6 423 7 827
Income on financial instruments
and shares 311 37 156
Fees and sundry income 2 213 6 386
Fair value adjustment to investments 7 406 22 429
Equity accounted retained income
of associates 32 736 22 669
Share of net income of associates 49 996 34 640
Less: Dividends received (17 260) (11 971)
Direct transactional costs - 4 452
Impairments - 1 000
Interest paid 1 643 1 594
Net income before expenses and
exceptional items 66 175 101 669
Less: Expenditure 14 503 11 759
Operating costs 14 095 11 296
Depreciation 408 463
Exceptional items - loss/(gains) 3 449 (1 256)
Net income before taxation 48 223 91 166
Taxation 1 574 5 269
Net income for the year attributable to
equity shareholders 46 649 85 897
Earnings per share - cents 100,8 185,6
Dividends per share* - cents 14,0 12,0
Weighted average number of shares
in issue - 000`s 46 276 46 272
Headline earnings per share - cents 108,3 182,7
Reconciliation of headline earnings
Net income for the year 46 649 85 897
Exceptional gains - group - (117)
Exceptional losses/(gains)- associates 2 062 (1 505)
Losses/costs arising from former
finance operations 1 387 366
Loss/(profit) on sale of fixed assets 12 (91)
Headline earnings for the year 50 110 84 550
* Dividends comprise 3 cents interim (December 2006: 2 cents) and
11 cents final (December 2006: 10 cents) - proposed after year-end
CONDENSED CASH FLOW STATEMENT
for the year ended 31 December 2007
12 months 12 months
31 Dec 31 Dec
2007 2006
Reviewed Audited
R`000 R`000
Cash generated by operating activities 9 415 51 532
Cash (utilised in) investing activities (34 370) (9 130)
Cash effects of financing activities - 66
Cash utilised for the payment of dividends (6 016) (3 703)
Change in cash and cash equivalents (30 971) 38 765
Cash balances, less interest-bearing debt,
at beginning of year 33 520 (5 245)
Cash balances, less interest-bearing debt,
at end of year 2 549 33 520
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2007
Non-
distribu- Distribu-
Share Share table table
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 - - 18 120 (18 120) -
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 50 854 161 316 66 334 279 371
Net income
for the year - - - 46 649 46 649
Translation of
foreign
subsidiary/
associates - - (135) - (135)
Variation of
interest in
subsidiary/
associates - - 125 - 125
Attributable
income of
associates - - 30 674 (30 674) -
Movement in
translation and
other reserves
of associates - - 4 917 - 4 917
Shares held
in treasury -
written back 2 56 - - 58
Shares held
in treasury -
cancelled (2) (181) - - (183)
Dividends paid - - - (6 016) (6 016)
Balance as at
31 December 2007 867 50 729 196 897 76 293 324 786
Contingent liabilities
The group`s contingent liabilities at 31 December 2007 are as follows:
1. Guarantees or undertakings on behalf of investees or clients
R2,2 million (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 (2006: R14 million). This reduced to
R4 million on 31 January 2008.
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
(2006: R9,2 million).
4. 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.
5. The group has rights and obligations in terms of shareholder
or purchase and sale agreements relating to its present or
former investments.
6. A group company has entered into lease agreements for premises
that it occupies. The amounts due in years 1-2 are R1 million.
INVESTMENT PROFILE
at 31 December 2007
Eco- Carry- Direc-
Number Voting nomic ing tor`s
Listed/ of interest interest value value
Unlisted shares % % R`000 R`000
Investments
in
associates
Flowmax
Holdings
Limited
(BVI/UK) U 40,0 40,0 30 391
Korbitec Holdings
(Pty) Limited U 16,4 16,4 4 701
Ridge Empowerment
Capital (Pty)
Limited U 45,0 45,0 -
SA Bias Industries
Limited U 48,5 56,2 142 132
Set Point
Technology
Holdings
Limited L 65 522 377 19,1 19,1 28 575
Sunspray Food
Ingredients
(Pty) Limited U 47,1 47,1 13 300
219 099 415 992
Long-term investments
Datatec Limited L 500 000 16 485
Massmart Holdings
Limited L 500 000 36 000
Metrofile Holdings
Limited L 21 182 646 24 872
77 357 77 357
Total investments 296 456 493 349
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 six 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.
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 results for the year were in line with expectations. Although headline
earnings per share decreased by 41% to 108,3 cents per share, this was in line
with budgets for the year. As explained in the prior year`s announcements, the
2006 results included a number of substantial one-off profits which were not
expected to be repeated in the following year.
A pleasing feature of the 2007 results was the material increase in income from
associates and resulting cash dividends and interest flows to Sabvest. The
results were however negatively affected by the prices of listed share
investments whose fall in the second half of 2007 reduced the group`s fair value
adjustments to investments.
Intrinsic value per share (which is calculated to include directors` valuation
of associates less deferred CGT) increased by 22% to 1 050 cents per share.
Shareholders` funds with investments at intrinsic value increased to R485,8
million at the reporting date.
All of the businesses in which Sabvest is invested through its associates and
its investment holdings performed well during the year except for Set Point
Technologies. However, Set Point has disposed of its loss-making operations and
is expected to turn in a strong performance for the coming year.
Related parties
Related party transactions exist between subsidiaries and the holding company,
fellow subsidiaries and associated companies which comprise fees, dividends and
interest.
Transactions with directors relate to fees and moneys lent to the group by
individuals and companies controlled by the directors.
Changes in investment holdings
During the year Sabvest:
- Increased its investment in Massmart Holdings Limited to 500 000 shares;
- Increased its interest in Sunspray Food Ingredients (Pty) Limited to 47,1%;
- Increased its interest in Set Point Technology Holdings Limited to 65 522
377 shares;
- Acquired a 45% interest in Ridge Empowerment Capital (Pty) Limited (a
subsidiary of Mineworkers Investment Company (Pty) Limited), and which has
subsequently invested in a new distressed debt fund.
Dividend policy
Dividends are determined 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 dividends for
the year have been increased to 14 cents per share (2006: 12 cents per share).
3 cents of this was declared as an interim dividend and 11 cents subsequent to
the year-end.
Accounting policies
The condensed financial statements have been prepared in accordance with the
group`s accounting policies which comply with IFRS. The condensed financial
information has been prepared in accordance with IAS34 - Interim Financial
Reporting.
The group has changed its basis of calculation of intrinsic value per share by
deducting a notional allowance for deferred CGT from the gain in fair value of
associates. The prior year`s intrinsic values have been amended accordingly.
Review by the auditors
Deloitte & Touche has issued an unqualified review opinion. A copy of the review
report is available for inspection at the registered office of the company.
Correction of error
Current and prior year accounts have been amended to provide for the accrual of
dividends from associates irrevocably declared prior to the year-ends but paid
after the year-ends and which were previously accounted for in retained income
of associates.
Disputes and legal actions
As explained in the 2002 to 2006 annual reports, the various legal actions
arising from the disposal of a subsidiary in 1993 continue to be vigorously
defended. The group and its legal advisors remain of the view that the group`s
prospects of success in these actions are sound.
Nevertheless the group is proactively attempting to bring the various actions to
a speedy conclusion as their continued existence precludes various corporate
opportunities available to the group. It is possible that this process may
result in costs to the group (which cannot be quantified at this stage with any
certainty).
Prospects
The group`s associates and the businesses operated by the group`s investee
companies are performing well. Notwithstanding the continued weakness in stock
markets in the first months of 2008, Sabvest expects increases in HEPS and in
intrinsic value per share in the year ahead.
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman CEO CFO
Sandton
28 February 2008
CASH DIVIDEND DECLARATION
Notice is hereby given that a final cash dividend of 11 cents (2006: 10 cents)
per ordinary share and "N" ordinary share for the twelve months ended 31
December 2007 has been declared payable to shareholders in accordance with the
undermentioned timetable:
Last date to trade "CUM"-dividend Wednesday, 19 March 2008
Trading "EX"-dividend commences Thursday, 20 March 2008
Record date Friday, 28 March 2008
Dividend payment date Monday, 31 March 2008
No dematerialisation or rematerialisation of share certificates will be allowed
for the period from 20 March 2008 to 28 March 2008, 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 * Telephone: (011) 268 2400 * Fax: (011) 268 2422 * e-mail:
ho@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
www.sabvest.com
Date: 28/02/2008 11:23:01 Produced by the JSE SENS Department.
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