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SBV
SBV
SBV/SVN - Sabvest Limited - Condensed audited results for the year ended 31
December 2010 and cash dividend declaration
SABVEST LIMITED
Incorporated in the Republic of South Africa
Registration number 1987/003753/06
"Sabvest" or "the group" or "the company"
ISIN: ZAE000006417 - ordinary shares
ISIN: ZAE 000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
CONDENSED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
AND CASH DIVIDEND DECLARATION
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
at 31 December 2010
31 Dec 31 Dec
2010 2009
Audited Audited
R`000 R`000
Non-current assets 453 800 365 442
Property, plant and equipment 745 1 070
Deferred tax asset 555 1 249
Share trust receivables 3 761 6 126
Investment holdings 448 739 356 997
Associates 329 373 292 994
Long-term investments 119 366 64 003
Current assets 41 686 31 205
Finance advances and receivables 16 532 24 672
Other financial instruments 5 899 -
Short-term investments 16 021 -
Cash balances 3 234 6 533
Total assets 495 486 396 647
Ordinary shareholders` equity 427 098 379 071
Non-current liability 55 491 5 212
Interest-bearing debt 48 124 -
Deferred tax liability 7 367 5 212
Current liabilities 12 897 12 364
Interest-bearing debt 5 133 7 350
Accounts payable 7 764 5 014
Total equity and liabilities 495 486 396 647
Shareholders` equity with investments
At intrinsic value - R`000 569 679 502 696
Net asset value per share - cents 922 825
Net asset value per share with
investments at directors` valuation
(intrinsic value) - cents +12% 1 230 1 094
Number of shares in issue less held
in share trust/treasury - 000`s 46 320 45 968
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
for the year ended 31 December 2010
12 months 12 months
31 Dec 31 Dec
2010 2009
Audited Audited
R`000 R`000
Cash generated by operating activities 552 17 632
Cash generated by investing activities (45 054) 11 333
Cash effects of financing activities 50 359 701
Cash utilised for the payment of dividends (6 939) (6 479)
Change in cash and cash equivalents (1 082) 23 187
Cash balances, less interest-bearing debt,
at beginning of year (817) (24 004)
Interest-bearing debt, less cash balances,
at end of year (1 899) (817)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2010
12 months 12 months
31 Dec 31 Dec
2010 2009
Audited Audited
R`000 R`000
Gross income from operations
and investments 100 031 78 938
Dividends received 17 208 34 939
Interest received 2 884 1 567
(Loss)/income on financial
instruments and shares (1 166) 9 976
Fees and sundry income 5 125 2 809
Fair value adjustments to
investments 21 585 8 274
Equity accounted retained
income of associates 54 395 21 373
Share of net income of
associates 68 752 53 936
Less: Dividends received (14 357) (32 563)
Impairments (144) (181)
Interest paid 3 892 3 467
Net income before expenses and
exceptional items 96 283 75 652
Less: Expenditure 23 103 18 538
Operating costs 22 783 18 208
Depreciation 320 330
Exceptional items - gains 325 9 344
Net income before taxation 73 505 66 458
Taxation - deferred 2 849 2 374
Net income for the year attributable
to equity shareholders 70 656 64 084
Translation of foreign
subsidiary/associates (1 515) (1 536)
Total comprehensive income for
the year attributable to equity
shareholders 69 141 62 548
Earnings per share - cents 154,0 139,1
Dividends per share (proposed after
year-end) - cents +21% 17,0 14,0
Weighted average number of shares
in issue - 000`s 45 869 46 078
Headline earnings per share - cents +29% 153,0 118,8
Reconciliation of headline earnings
Net income for the year 70 656 64 084
Exceptional gains - group (236) (14 153)
Exceptional losses - associates - 4 628
(Gains)/losses arising from former
finance operations (89) 181
Profit on sale of property, plant
and equipment (167) -
Headline earnings for the year 70 164 54 740
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2010
Non-
distri- Accu-
Share Share butable mulated
capital premium reserve profit Total
R`000 R`000 R`000 R`000 R`000
Balance as at
1 January 2009 862 50 033 253 060 46 681 350 636
Total comprehensive
income for the year - - (1 536) 64 084 62 548
Accumulated loss in
share trust - - (1 452) - (1 452)
Share-based payment
charge - - 480 - 480
Attributable income
of associates - - 16 745 (16 745) -
Movement in translation
and other reserves
of associates - - (25 508) - (25 508)
Shares held in share
trust - written back 5 696 - - 701
Shares held in
share trust - (1 855) - - (1 855)
Dividends paid - - - (6 479) (6 479)
Balance as at
31 December 2009 867 48 874 241 789 87 541 379 071
Total comprehensive
income for the year - - (1 515) 70 656 69 141
Loss in share trust
- written back - - 808 - 808
Share-based payment
charge - written back - - (643) - (643)
Attributable income of
associates - - 54 395 (54 395) -
Movement in translation
and other reserves
of associates - - (16 081) - (16 081)
Shares held in treasury (3) (362) - - (365)
Shares held in share
trust - written back - 1 855 - - 1 855
Shares held in
share trust - (2 349) - - (2 349)
Shares of "N" ordinary
Shares - 2 600 - - 2 600
Dividends paid - - - (6 939) (6 939)
Balance as at
31 December 2010 864 50 618 278 753 96 863 427 098
Contingent liabilities
1. The group has rights and obligations in terms of shareholder
and purchase and sale agreements relating to its present and
former investments.
2. Commitments for the lease of premises are as follows:
Year 1 R1,167 million
Years 2 R0,507 million
INVESTMENT PROFILE
at 31 December 2010
Economic Carrying Directors`
Number interest value value
of shares % R`000 R`000
Investments in
associates
Unlisted
Flowmax Holdings
Limited (BVI/UK) 40,0
SA Bias Industries
(Pty) Limited 57,3*
Set Point Group
(Pty) Limited 49,8
Sunspray Food
Ingredients (Pty)
Limited 47,1
329 373 522 945
* Voting interest 48,8%
Long-term investments
Unlisted
Korbitec Holdings
(Pty) Limited 8,5
Korbicom (Pty)
Limited 17,0
Primedia Holdings
1 Limited - JJPIK Loans -
Transaction Capital
(Pty) Limited 1 000 000 -
20 048 20 048
Listed
Brait SA 600 000 - 14 520
Datatec Limited 1 000 000 - 33 300
Metrofile Holdings
Limited 20 400 000 5,0 43 248
Net1 UEPS
Technologies Inc 100 000 - 8 250
99 318 99 318
Total long-term
investments
and associates 448 739 642 311
Short-term investments
Listed
Foreign 13 486
RSA 2 535
16 021 16 021
Total investment
holdings 464 760 658 332
PERFORMANCE INDICATORS
Annualised
Compound Compound
Growth Growth
1 year 5 years
(%) (%)
Headline earnings per share 28,8 15,6
Dividends per share 21,4 23,2
Intrinsic net asset value per share 12,4 20,7
COMMENTARY
PROFILE
Sabvest is an investment group which has been listed since 1988. Its
ordinary and "N" ordinary shares are quoted in the Financials - Equity
Instruments sector of the JSE Limited.
Sabvest has significant or joint controlling interests in four unlisted
industrial groups which are accounted for as associates, and a long-term
portfolio of eight other investments which are accounted for on a fair value
basis. Four of these are JSE listed.
In addition, Sabvest maintains finance advances and share and debt
instrument portfolios and undertakes other fee and profit earning
activities.
FINANCIAL RESULTS
Sabvest`s results for the twelve months were very satisfactory with a good
performance from its associated companies and higher than expected fair
value adjustments to its investment portfolios.
Headline earnings per share increased by 29% to 153 cents per share and the
dividends for the year have been increased by 21% to 17 cents per share.
Intrinsic value per share increased by 12% to 1 230 cents per share. The
extent of the increase was affected by the strong Rand at the financial year-
end due to the conversion at these rates of the overseas assets held by the
group through SA Bias Industries and Flowmax UK.
Shareholders` funds with investments at intrinsic value (net of notional
CGT) increased to R570m.
A four year loan of R35m has been raised to facilitate the group`s South
African investment programme. An offshore ring-fenced thirteen months notice
facility of $2m has been arranged to enable the group to re-open its
overseas short-term portfolio which is currently focused on the IT sector.
It is Sabvest`s intention to maintain a moderate level of gearing to enhance
investment returns. At the reporting date net interest-bearing debt amounted
to 9% of shareholders` equity at intrinsic value.
With regard to the lower dividends received for the year, certain dividends
that were previously accounted for in the second half of each year and paid
in the first half of the following financial year will now be declared and
paid in the first half of the following financial year.
Operating costs for the year included R2,6m of one-off items arising from
special incentives and the winding up of the group`s share appreciation
rights scheme as explained to shareholders in the circular dated 7 December
2010. All three executive directors are now direct shareholders in the
company.
With regard to medium-term growth, over a five-year period, headline
earnings per share grew by 15,6% p.a., dividends per share by 23,2% p.a. and
intrinsic net asset value per share by 20,7% p.a. - all in excess of the
group`s growth targets.
INDUSTRIAL ASSOCIATES
Sabvest`s four unlisted industrial associates performed well with Sabvest`s
share of their after tax income increasing by 28% to R69m. On a look-through
basis and notwithstanding the effects of the strong Rand, the unaudited
combined revenue of the four groups for the twelve months was R1,3bn, EBITDA
R222m and PBT R182m.
CHANGES IN INVESTMENT HOLDINGS
During the period, Sabvest:
- Promoted a process which has led to the delisting of Set Point Group
Limited and which has resulted in Sabvest`s holding in Set Point increasing
from 31% to 49%. All of the guarantees and loan funding provided by Sabvest
for this process have been released or refinanced without recourse to
Sabvest.
- Acquired 1m shares in Transaction Capital (Pty) Limited - a specialised
financial group.
- Increased its investment in Korbitec Holdings (Pty) Limited, a subsidiary
of Naspers, to 8,5%.
- Acquired 0,6m shares in Brait SA, which is listed on the Luxembourg and
JSE exchanges.
- Acquired 0,1m shares in Net1 UEPS Technologies Inc, which is listed on
NASDAQ and the JSE.
- Reopened its offshore portfolio with investments on NASDAQ in Check Point
Software Technologies, Google and Qualcomm.
- Disposed of its equity interests in Nimble Group through the sale of its
investment in Ridge Empowerment Capital but retained the participations held
by it in the Nimble and West Central debt funds.
With regard to the group`s associates:
- Flowmax UK expanded the spread of its five industrial distribution
businesses in the UK through the acquisitions of Anglo Nordic Burners
Products Limited, Bell Flow Systems Limited and Fluidwell (UK) Limited.
- SA Bias Industries disposed of its Hanger Pro operating unit in RSA.
DIVIDEND POLICY
The group`s policy is to pay an interim and a final dividend. The extent of
the dividends is determined relative to net operating cash flows and from
receipts from finance advances and the realisation of investments that are
not earmarked for new projects.
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 its 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
year`s financial statements and comply with IFRS and the AC 500 standards as
issued by the Accounting Practices Board or its successor. This announcement
contains the information required by IAS 34 - Interim Financial Reporting.
AUDIT OPINION
Deloitte & Touche has issued an unmodified audit opinion. A copy of the
audit report is available for inspection at the registered office of the
company.
PROSPECTS
All of the group`s associates are projecting improved earnings in 2011. In
addition, most of the companies in the group`s investment portfolios are
also expected to record improved results although the extent to which this
will be reflected in share prices or valuations is obviously uncertain.
As a result we anticipate an improvement in Sabvest`s results in the year
ahead. This projection has not been reviewed or reported on by the group`s
auditors.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman CEO CFO
Sandton
2 March 2011
CASH DIVIDEND DECLARATION
Notice is hereby given that a final cash dividend of 13 cents (2009: 11
cents) per ordinary share and "N" ordinary share for the twelve months ended
31 December 2010 has been declared payable to shareholders in accordance
with the undermentioned timetable:
Last date to trade "CUM" dividend Thursday, 17 March 2011
Trading "EX" dividend commences Friday, 18 March 2011
Record date Friday, 25 March 2011
Dividend payment date Monday, 28 March 2011
No dematerialisation or rematerialisation of share certificates will be
allowed for the period from Friday, 18 March 2011 to Friday, 25 March 2011,
both days inclusive.
Sabvest Limited
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
Sponsor:
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
www.sabvest.com
Date: 02/03/2011 12:47:01 Produced by the JSE SENS Department.
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