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SBV SVN
SBV
SBV/SVB - Sabvest Limited - Unaudited interim results for the six months
ended 30 June 2008
Sabvest Limited
"Sabvest" - Registration number 1987/003753/06
ISIN: ZAE000006417 - ordinary shares
ISIN: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
www.sabvest.com
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
BALANCE SHEET at 30 June 2008
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2008 2007 2007
R`000 R`000 R`000
Non-current assets 326 491 274 981 304 076
Property, plant and equipment 1 318 1 595 1 501
Deferred tax asset 2 036 3 182 2 545
Share trust receivables 3 854 3 332 3 574
Investment holdings 319 283 266 872 296 456
Associates* 255 392 183 878 219 099
Long-term investments 63 891 82 994 77 357
Current assets 32 311 51 743 38 350
Finance advances and receivables 17 039 9 441 28 700
Cash balances 15 272 42 302 9 650
Total assets 358 802 326 724 342 426
Ordinary shareholders` equity 343 388 305 056 324 786
Non-current liability 2 685 5 397 4 645
Deferred tax liability 2 685 5 397 4 645
Current liabilities 12 729 16 271 12 995
Interest-bearing debt 5 975 11 052 7 101
Accounts payable 6 754 5 219 5 894
Total equity and liabilities 358 802 326 724 342 426
Net asset value per
share - cents 742 659 702
Net tangible asset value per
share - cents 735 652 694
Net asset value per share with
listed investments in associates
at market value - cents 816 716 782
Net asset value per share with
investments in associates at
directors` valuation (intrinsic
value) - cents 1 078 904 1 050
Number of shares in issue less
held in treasury - 000`s 46 276 46 275 46 276
* Includes goodwill of R3,4 million (30 June 2007: R3,4 million)
* Calculated after deducting CGT payable should investments be
sold at directors` valuation.
INCOME STATEMENT
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2008 2007 2007
R`000 R`000 R`000
Gross income from operations and
investments 18 038 41 629 67 818
Dividends received 10 327 4 912 18 729
Interest received 1 734 3 716 6 423
Income on financial
instruments and shares - 340 311
Fees and sundry income 870 834 2 213
Fair value adjustment to
investments (13 664) 20 108 7 406
Equity accounted retained
income of associates 18 771 11 719 32 736
Share of net income of
associates 27 983 16 040 49 996
Less: Dividends received (9 212) (4 321) (17 260)
Impairments 174 1 106 -
Interest paid 626 739 1 643
Net income before expenses and
exceptional items 17 238 39 784 66 175
Less:Expenditure 7 827 7 292 14 503
Operating costs 7 636 7 090 14 095
Depreciation 191 202 408
Exceptional items - losses 2 079 2 572 3 449
Net income before taxation 7 332 29 920 48 223
Taxation - deferred (1 451) 1 656 1 574
Net income for the period
attributable to equity
shareholders 8 783 28 264 46 649
Earnings per share - cents 19,0 61,1 100,8
Dividends per share - cents
(proposed after interim/
year-end) 3,0 3,0 14,0
Weighted average number of
shares in issue - 000`s 46 276 46 275 46 276
Headline earnings per
share - cents*1 23,5 66,6 108,3
Reconciliation of headline
earnings
Net income for the period 8 783 28 264 46 649
Exceptional losses - associates - 2 000 2 062
Losses/costs arising from former
finance operations 2 079 572 1 387
Profit on sale of property,
plant and equipment - - 12
Headline earnings for the period 10 862 30 836 50 110
*1 There are no diluting instruments
SUMMARISED CASH FLOW STATEMENT
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 Dec
2008 2007 2007
R`000 R`000 R`000
Cash generated by/(utilised in)
operating activities 3 451 (418) 9 415
Cash generated by/(utilised in)
investing activities 8 387 2 776 (34 370)
Cash utilised for the payment
of dividends (5 090) (4 628) (6 016)
Change in cash and cash
equivalents 6 748 (2 270) (30 971)
Cash balances, less
interest-bearing debt, at
beginning of period 2 549 33 520 33 520
Cash balances, less interest-
bearing debt, at end of period 9 297 31 250 2 549
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2008
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 2007 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
Net income for the
period - - - 8 783 8 783
Translation of
foreign subsidiary/
associates - - 1 622 - 1 622
Attributable income
of associates - - 18 771 (18 771) -
Movement in translation
and other reserves
of associates - - 13 287 - 13 287
Dividends paid - - - (5 090) (5 090)
Balance as at
30 June 2008 867 50 729 230 577 61 215 343 388
Contingent liabilities
The group`s contingent liabilities at 30 June 2008 are as follows:
1. Guarantees or undertakings on behalf of investees or clients Rnil (31
December 2007: R2,2 million).
2. Put options given by the company to holders of SA Bias redeemable
preference shares which have due dates in 2009
R4 million (31 December 2007: R9 million).
3. Put options given by the company to holders of SA Bias junior loans which
have due dates from 2009 to 2010 R5,2 million (31 December 2007: R7,2
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 0 to 1 is R635 000.
Investment commitments
1. Authorised and committed: R14 million.
2. Authorised: R25 million.
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.
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 17,1 17,1
Ridge Empowerment
Capital (Pty) Limited U 45,0 45,0
S A Bias Industries
(Pty) Limited U 48,5 56,2
Set Point Technology
Holdings Limited L 66 661 055 19,4 19,4
Sunspray Food
Ingredients (Pty) Ltd U 47,1 47,1
Long-term investments
Datatec Limited L 500 000
Massmart Holdings
Limited L 500 000
Metrofile Holdings
Limited L 21 400 000
In addition, Sabvest maintains finance advances and debt instrument
portfolios and undertakes other fee and profit earning activities.
FINANCIAL RESULTS
Sabvest`s results for the period reflected a 65% drop in headline earnings
per share to 23,5 cents per share. This was a result of the negative IFRS
fair value adjustment charge applicable to the group`s three listed
investments that are accounted for on a fair value basis, and the very high
positive fair value adjustment in the comparable reporting period. This
volatility is an unfortunate feature of fair value accounting and does not
reflect the underlying good performance of the businesses of these three
groups in which Sabvest is invested.
The group`s associates performed well with Sabvest`s share of their net
income increasing by 74% to R28 million.
As the negative fair value adjustments are non-cash items, the group has
elected to maintain its dividend for the period notwithstanding the fall in
headline earnings per share.
The group`s balance sheet remains strong and liquid with no net debt at the
interim stage. Net asset value per share at intrinsic value increased by 19%
to 1 078 cents per share compared with the intrinsic value at the end of the
prior interim period.
Shareholders` funds with investments at intrinsic value were R498,9 million
(30 June 2007: R418,3 million).
CHANGES IN INVESTMENT HOLDINGS
Small increases in the group`s holdings in Set Point and Korbitec were made.
DIVIDEND POLICY
Dividends are determined relative to Sabvest`s own operating cash flows and
not calculated relative to headline earnings per share.
It is the group`s policy to consider dividends twice annually. The interim
dividend has been maintained at 3 cents per share.
ACCOUNTING POLICIES
The unaudited condensed 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 2007.
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.
DISPUTES AND LEGAL ACTIONS
As explained in the 2002 - 2007 annual reports, the various legal actions and
objection processes arising from the disposal of a trade finance subsidiary
in 1993 continue to be pursued and defended.
The group was successful in the first of the actions that came to court in
March 2008 and this has enhanced the climate for a settlement of these
protracted and complicated actions. Any settlement may result in a cost to
the group (which cannot be finally quantified at this stage).
An announcement will be made if a settlement is concluded.
PROSPECTS
The group`s associates and the businesses operated by the group`s investee
companies are performing in line with expectations in the current weak
economic climate. However, due to the volatility of stock market prices it is
not possible to predict with any degree of certainty the level of headline
earnings per share that will be achieved by the group in the current
financial year.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman Chief Executive CFO
28 July 2008
Sandton
CASH DIVIDEND DECLARATION
Notice is hereby given that a dividend of 3 cents (2007: 3 cents) per
ordinary share and "N" ordinary share for the six months ended 30 June 2008
has been declared, payable to shareholders in accordance with the
undermentioned timetable:
Last date to trade "CUM" dividend Friday, 15 August 2008
Trading "EX" dividend commences Monday, 18 August 2008
Record date Friday, 22 August 2008
Dividend payment date Monday, 25 August 2008
No dematerialisation or rematerialisation of share certificates will be
allowed for the period from Monday, 18 August 2008 to Friday, 22 August 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
Communications:
Telephone: (011) 268 2400 Fax: (011) 268 2422 e-mail: ho@sabvest.com
Transfer secretaries:
Computershare Investor Services (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: 28/07/2008 13:04:02 Produced by the JSE SENS Department.
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