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SBV
SBV
SBV / SVN - Sabvest - Reviewed Condensed Results For The Year Ended 31 December
2008 And Cash Dividend Declaration
SABVEST LIMITED
(Incorporated in the Republic of South Africa)
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
("Sabvest" or "the group" or "the company")
REVIEWED CONDENSED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008 AND CASH DIVIDEND
DECLARATION
Condensed Balance Sheet
at 31 December 2008
31 Dec 31 Dec
2008 2007
Reviewed Audited
R`000 R`000
Non-current assets 365 160 304 076
Property, plant and equipment 1 380 1 501
Deferred tax asset 1 897 2 545
Share trust receivables 4 134 3 574
Investment holdings 357 749 296 456
Associates* 279 139 219 099
Long-term investments 78 610 77 357
Current assets 18 614 38 350
Finance advances and receivables 18 518 28 700
Cash balances 96 9 650
Total assets 383 774 342 426
Ordinary shareholders` equity 350 636 324 786
Non-current liability 3 486 4 645
Deferred tax liability 3 486 4 645
Current liabilities 29 652 12 995
Interest-bearing debt 24 100 7 101
Accounts payable 5 552 5 894
Total equity and liabilities 383 774 342 426
Net asset value per share - cents 759 702
Net asset value per share with
investments in associates at
directors` valuation
(intrinsic value) - cents** 1 016 1 050
Number of shares in issue less
held in treasury - 000`s 46 180 46 276
*Includes goodwill of R3,4 million (31 December 2007: R3,4 million).
**Calculated after deducting CGT payable should investments be sold at
directors` valuation.
Condensed Income Statement
for the year ended 31 December 2008
12 months 12 months
31 Dec 31 Dec
2008 2007
Reviewed Audited
R`000 R`000
Gross income from operations
and investments 59 216 67 818
Dividends received 38 149 18 729
Interest received 3 938 6 423
Income on financial instruments
and shares - 311
Fees and sundry income 2 781 2 213
Fair value adjustment to
investments (16 939) 7 406
Equity accounted retained income
of associates 31 287 32 736
Share of net income of
associates 67 056 49 996
Less: Dividends received (35 769) (17 260)
Impairments (45) -
Interest paid 2 335 1 643
Net income from operations and
investments 56 926 66 175
Less: Expenditure 15 869 14 503
Operating costs 15 473 14 095
Depreciation 396 408
Exceptional items 33 509 3 449
Net income before taxation 7 548 48 223
Taxation - deferred (512) 1 574
Net income for the year attributable to
equity shareholders 8 060 46 649
Earnings per share - cents 17,4 100,8
Dividends per share* - cents 14,0 14,0
Weighted average number of shares
in issue - 000`s 46 260 46 276
Headline earnings per share - cents 89,9 108,3
Reconciliation of headline earnings
Net income for the year 8 060 46 649
Exceptional losses - associates - 2 062
Losses/costs arising from former
finance operations 33 509 1 387
Loss on sale of fixed assets 1 12
Headline earnings for the year 41 570 50 110
* Dividends comprise 3 cents interim (2007: 3 cents) and 11 cents final
(December 2007: 11 cents) - proposed after year-end
Condensed Cash Flow Statement
for the year ended 31 December 2008
12 months 12 months
31 Dec 31 Dec
2008 2007
Reviewed Audited
R`000 R`000
Cash generated by operating
activities 21 367 9 415
Cash generated by/(utilised in)
investing activities (40 740) (34 370)
Cash effects of financing activities (701) -
Cash utilised for the payment
of dividends (6 479) (6 016)
Change in cash and cash equivalents (26 553) (30 971)
Interest-bearing debt, less cash
balances at beginning of year 2 549 33 520
Interest-bearing debt, less cash
balances at end of year (24 004) 2 549
Condensed Statement of changes in equity
for the year ended 31 December 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 (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 year - - - 8 060 8 060
Translation of
foreign
subsidiary/
associates - - (16) - (16)
Share-based
payment charge - - 163 - 163
Attributable income
of associates - - 31 287 (31 287) -
Movement in
translation and
other reserves
of associates - - 24 729 - 24 729
Shares held in
share trust (5) (696) - - (701)
Unclaimed dividends
- written back - - - 94 94
Dividends paid - - - (6 479) (6 479)
Balance as at
31 December 2008 862 50 033 253 060 46 681 350 636
Contingent liabilities
The group`s contingent liabilities at 31 December 2008 are as follows:
1. Put options given by the company to holders of SA Bias redeemable
preference shares which have due dates in 2009: R4 million (2007: R9
million). These were reduced to nil in January 2009.
2. Put options given by the company to holders of SA Bias junior loans which
have due dates from 2009 to 2010: R5,2 million (2007: R7,2 million).
3. The group has rights and obligations in terms of shareholder or purchase
and sale agreements relating to its present or former investments.
4. A group company has entered into lease agreements for premises that it
occupies. The amounts due over the next year amounts to R289 000.
5. A guarantee of R5 million has been given on behalf of one of the group`s
investee companies against which a counter indemnity of R3 million has been
received. The guarantee is expected to be released in full over the six
months to 30 June 2009.
Investment profile
at 31 December 2008
Voting Economic
Listed/ Number of interest interest
Unlisted shares % %
Investments in
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
SA Bias Industries
(Pty) Limited U 48,5 57,3
Sunspray Food
Ingredients
(Pty) Limited U 47,1 47,1
Set Point Technology
Holdings Limited L 68 000 000 19,8 19,8
Long-term investments
Datatec Limited L 700 000
Massmart Holdings Limited L 500 000
Metrofile Holdings Limited L 21 400 000
Primedia Holdings 1
Limited U
Carrying Director`s
value value
R`000 R`000
R`000 R`000
Investments in
associates
Flowmax Holdings
Limited (BVI/UK) 36 244
Korbitec Holdings
(Pty) Limited 7 200
Ridge Empowerment
Capital (Pty) Limited -
SA Bias Industries
(Pty) Limited 182 807
Sunspray Food
Ingredients
(Pty) Limited 15 558
241 809 380 327
Set Point Technology
Holdings Limited 37 330 54 400
279 139 434 727
Long-term investments
Datatec Limited 11 480 11 480
Massmart Holdings Limited 42 280 42 280
Metrofile Holdings Limited 19 046 19 046
Primedia Holdings 1
Limited 5 804 5 804
78 610 78 610
Total investments 357 749 513 337
Performance indicators
Annualised Annualised
Compound Compound Compound
Growth Growth Growth
1 year 3 years 5 years
(%) (%) (%)
Headline earnings per share -17,0 +6,6 +12,6
Dividends per share - +32,4 +28,8
Intrinsic net asset value
per share -3,2 +28,3 +23,9
Commentary
Profile
Sabvest is an investment and finance 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 minority or joint controlling interests in six groups,
which are accounted for as associates, and a long-term portfolio of four other
investments which are accounted for on a fair value basis.
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 year were below its expectations.
Headline earnings per share decreased by 17% to 89,9 cents per share. This was a
result of negative fair value adjustments to the carrying values of the group`s
listed investments due to the general fall in prices on the JSE, and an
impairment to the group`s private equity investment necessitated by lower
forward projections in the current economic climate. Most of the group`s
associates improved their profitability, in particular SA Bias Industries (Pty)
Limited and Set Point Technology Holdings Limited.
Earnings per share decreased by 83% to 17,4 cents per share. This was partially
a result of the negative fair value adjustments and private equity impairment,
but more particularly due to the R28,3 million paid for the settlement of legal
actions, as explained in the SENS announcement of 22 August 2008.
The group recorded an increase in reserves through the statement of changes in
equity of R26,6 million equal to 57 cents per share. This arose from currency
translation gains on the group`s Sterling investment in Flowmax Holdings Limited
(UK) and from the predominantly US Dollar operations of SA Bias Industries (Pty)
Limited in China, Hong Kong and Sri Lanka.
Intrinsic value per share (net asset value per share adjusted for directors`
valuation of associates less deferred CGT) decreased by 3% to 1 016 cents per
share. Shareholders` funds with investments at intrinsic value were R469 million
at the reporting date.
Dividends have been maintained at 14 cents per share notwithstanding the fall in
headline earnings per share and earnings per share. In this regard, the fair
value adjustments are non-cash charges. In addition, one of the group`s
associates has agreed to pay special dividends in 2008 and 2009 which are
sufficient to fully fund the costs of the legal settlement. Sabvest`s share of
these special dividends was R18,75 million in 2008 and will be R15 million in
2009. These special dividends do not affect normal dividend receipts from
associates in terms of agreed dividend cover.
Changes in investment holdings
During the year Sabvest:
- Increased its investment in Datatec Limited to 700 000 shares;
- Increased its investment in Set Point Technology Holdings Limited to 68
million shares;
- Increased its investment in Metrofile Holdings Limited to 21,4 million
shares;
- Increased its economic interest in SA Bias Industries (Pty) Limited to
57,3%;
- Acquired a small interest in ordinary shares, preference shares and JJ PIK
debt instruments in Primedia Holdings 1 Limited which had a carrying value
of R5,8 million at the year-end.
One of the group`s associates, Ridge Empowerment Capital (Pty) Limited, acquired
100% of West Central Capital (Pty) Limited which is the management company of
West Central Fund 1 which is invested in distressed debt portfolios.
Dividend policy
Dividends are determined relative to Sabvest`s own expected recurring cash flows
and relative to 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 maintained at 14 cents per share. 3 cents was declared as an
interim dividend and 11 cents as a final dividend subsequent to the year-end.
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 condensed financial statements have been prepared in accordance with the
group`s accounting policies which are consistent with those of the previous
financial statements and comply with IFRS and in accordance with IAS34 - Interim
Financial Reporting.
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.
Disputes and legal actions
As explained in previous annual reports, the group has been engaged in numerous
legal actions arising from and subsequent to the disposal of its trade finance
subsidiary in 1993 and its banking interests in 1996. The group was successful
in the first of the actions which came to Court in March 2008. This improved the
climate for a comprehensive settlement. This was effected in August 2008 and was
explained in detail to shareholders in the SENS announcement released on 22
August 2008.
The group is no longer party to any legal disputes arising from its former trade
finance and banking investments.
Prospects
The businesses operated by the group`s associates and by the group`s investee
companies all continue to have sound medium-term growth prospects and are all
well managed. However, the current economic downturn will affect the short-term
profitability of some of the businesses and in addition the group`s results will
be impacted by movements in fair values linked directly to share price
movements.
Notwithstanding these circumstances and as the 2008 results contained a number
of one-off items, the group is cautiously confident that both headline earnings
per share and earnings per share in the year ahead will not be less than
headline earnings per share in the current year. These projections have not been
reviewed or reported on by the company`s auditors.
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman CEO CFO
Sandton
26 February 2009
Cash Dividend Declaration
Notice is hereby given that a final cash dividend of 11 cents (2007: 11 cents)
per ordinary share and "N" ordinary share for the twelve months ended 31
December 2008 has been declared payable to shareholders in accordance with the
undermentioned timetable:
Last date to trade "CUM"-dividend Friday, 20 March 2009
Trading "EX"-dividend commences Monday, 23 March 2009
Record date Friday, 27 March 2009
Dividend payment date Monday, 30 March 2009
No dematerialisation or rematerialisation of share certificates will be allowed
for the period from Monday, 23 March 2009 to Friday, 27 March 2009, 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 (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: 26/02/2009 13:06:17 Produced by the JSE SENS Department.
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