| Wed 10 Sep 2003, 10:26 | | Audited Group results for the year ended 30 June 2 |
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Sasfin - Audited Group results for the year ended 30 June 2003
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
("Sasfin" or "the Group" or "the Company")
Share code: SFN
ISIN: ZAE000006565
Audited Group results for the year ended 30 June 2003
Nature of business
Sasfin is a bank-controlling company which is listed under the "Financials:
Speciality and other Finance" sector of the JSE Securities Exchange South Africa
("the JSE"). The focus of the Group is to provide a wide range of complementary
banking, financial and related services to its growing base of corporate,
commercial and private clients.
Comments
The past year was a particularly challenging one for the banking industry, beset
by deteriorating economic fundamentals at home and abroad and the second tier
bank crisis. The shake-out in the banking industry, with most of the small- to
medium-sized banks having exited this previously over-crowded sector, and the
larger banks having rationalised their businesses, has resulted in a healthier
and more resilient banking sector.
Sasfin responded to these challenges by reducing staff, improving productivity
and controls, and by refocusing on its core competency - entrepreneurial
corporate and commercial financing and relationship banking for high net worth
individuals.
Financial performance
The attributable earnings of R20,4 million were affected by the following
significant issues:
- As the Group maintained assets in foreign currencies, a significant part of
the translation profit earned in the previous year from the depreciation of the
Rand, was reversed due to the subsequent recovery of the Rand. In light of this
volatility, it was decided to convert these assets to Rand. This has improved
Sasfin"s interest income, in that assets, which previously earned interest in
low-yielding foreign currencies, now earn interest in higher-yielding Rand. The
full benefits of this conversion will be evident in the financial year ending
June 2004.
- The impact of the implementation of AC133 which resulted in earnings of R4,9
million - as detailed below.
The core income of the Group, which excludes the impact of foreign exchange
profits and losses and AC133, has steadily improved. For the year under review,
core income was R29,3 million (2002: Zero).
The statutory risk-weighted capital adequacy ratio of Sasfin Bank Limited is
35,6% (2002: 19,8%), which is well above the prescribed minimum of 10%.
Recent developments
The following developments should further impact positively on profitability:
- Sasfin is finalising the overhaul of its securitisation structure, bringing it
in line with international best practice.
- Sasfin"s Corporate Finance Division has been granted Designated Advisor status
by the JSE for companies to be listed on the Alternative Exchange that is being
set up by the JSE.
- The recent launch of The Sasfin International Fund, in association with LCF-
Rothschild Asset Management, Paris, which has been approved by the Luxembourg
and South African authorities.
- An experienced team of Financial Planners has joined Sasfin Investment and
Asset Managers (Pty) Limited - the Group"s Financial Advisory Division, to
replace the team that left the Group earlier in the year.
- Sasfin has acquired a 25,1% share in Fingro Management and Financial Services
(Pty) Limited, a newly formed financial services products distribution company,
which will create a wider distribution base into which Sasfin can sell its
products and services.
Prospects
South Africa"s apparent entry into a phase of declining interest rates should
benefit Group profits as most of Sasfin"s medium-term receivables, unlike its
borrowings, are not linked to downward interest rate movements. Furthermore,
declining interest rates should provide a much needed boost to the economy,
resulting in greater demand for the Group"s services, particularly financing,
stockbroking and corporate finance.
All three of the lending units of the Group"s banking division are budgeting for
enhanced profitability as a result of increased margins, combined with the
positive impact of reductions in overheads and improvements in efficiencies that
have been implemented.
The Group"s Investment and Asset Management division is budgeting for a small
increase in profitability, but awaits a major stock market recovery before a
significant turnaround can be achieved.
The Freight Services division is budgeting for another steady increase in
performance.
Basis of accounting
The results were prepared in accordance with South African Statements of
Generally Accepted Accounting Practices and accounting policies have been
consistently applied, except for the adoption of AC133: Financial Instruments :
Recognition and Measurement.
AC133 impacts on the recognition and measurement of financial instruments,
including measurement and impairment of advances. The treatment of this
statement in these results is as per current interpretation of recommended
practice, as interpretation and presentation issues continue to be debated by
the accounting profession and business. The impact on the financial results can
be summarised as follows:
Impact on reserves
Current
income Distributable
statement reserves Total
R"000 R"000 R"000
Advances
Transitional adjustments at 1 July 2002
- remeasurement of
advances (8 525) (8 525)
- additional specific
impairments at (3 318) (3 318)
Release of general
provision at 1 July 2002 14 419 14 419
Remeasurement of advances
at 30 June 2003 820 820
Additional specific
impairments at 30 June 2003 (1 705) (1 705)
Utilisation of general
provision during the year (3 178) (3 178)
10 356 (11 843) (1 487)
Taxation (3 107) 3 553 446
7 249 (8 290) (1 041)
Investments and other financial assets
Revaluation of available-for-sale portfolio
- transitional adjustment
at 1 July 2002 3 431 3 431
- current year fair value
adjustment (1 399) (1 399)
Revaluation of held-for-
trading portfolio
- transitional adjustment
at 1 July 2002 6 905 6 905
- current year fair value
adjustment (2 358) (2 358)
(2 358) 8 937 6 579
Taxation - - -
(2 358) 8 937 6 579
TOTAL IMPACT 4 891 647 5 538
Audit opinion
The Group financial statements have been audited by Fisher Hoffman PKF (Jhb) Inc
and KPMG Inc. Their unqualified audit report is available for inspection at the
Company"s registered office.
Cash dividend and scrip dividend alternative
The directors have resolved to pay a cash dividend of 33 cents per share to
ordinary shareholders recorded in the books of the Company at the close of
business on Friday, 10 October 2003 ("the record date").
Shareholders may elect to receive a scrip dividend in lieu of a cash dividend in
respect of all or part of their shareholding. As the Company has elected to pay
the Secondary Tax on Companies ("STC"), the base cost for capital gains tax
purposes will be the weighted average trading price of an ordinary share of the
Company on the JSE for the three business days ending Thursday, 25 September
2003 ("the issue price").
The rounded number of shares to which a shareholder will be entitled in terms of
the scrip dividend alternative will be determined by multiplying the number of
ordinary shares held by the shareholder by 33 cents and then dividing by the
issue price. This issue price will be announced on SENS on Friday, 26 September
2003 and in the press on Monday, 29 September 2003.
The last day to trade the Company"s shares on the JSE to ensure a purchaser
appears as an owner on the record date will be Friday, 3 October 2003.
Uncertificated securities in terms of the scrip dividend entitlement can be
traded from Monday, 6 October 2003. A form of election dealing with the scrip
dividend alternative and election will be posted to shareholders who have not
yet dematerialised their shares ("certificated shareholders") on Thursday, 18
September 2003. Certificated shareholders who wish to receive the scrip
dividend alternative should complete the form of election and deliver/post it to
the transfer secretaries so that it is received by them by no later than 12h00
on Friday, 10 October 2003. Dematerialised shareholders must advise their
Central Securities Depository Participant ("CSDP") or broker regarding their
election in terms of the agreement in existence between the dematerialised
shareholder and the CSDP or broker.
Application will be made to the JSE for the maximum number of shares to be
listed with effect from the commencement of business on Monday, 6 October 2003
when the price of the Company"s securities will be quoted "ex" the dividend. It
is expected that dividend cheques or share certificates (where required) in
respect of new ordinary shares will be posted to certificated shareholders on or
about Monday, 13 October 2003. Dematerialised shareholders will have their safe
custody accounts held at their CSDP or broker credited or updated on Monday, 13
October 2003.
Summary of the salient dates:
Circular and form of election
posted to shareholders Thursday, 18 September 2003
Three business days price
determination ends Thursday, 25 September 2003
Issue price announced on SENS Friday, 26 September 2003
Issue price announced in the press Monday, 29 September 2003
Last day to trade to qualify Friday, 3 October 2003
Shares trade ex-entitlement and
trade in entitlement shares commences Monday, 6 October 2003
Maximum number of shares listed Monday, 6 October 2003
Scrip dividend alternative closes for
election at 12h00 Friday, 10 October 2003
Record date Friday, 10 October 2003
Share certificates or dividend cheques
posted and CSDP accounts
credited/updated Monday, 13 October 2003
Results announcement published on SENS Monday, 13 October 2003
Results announcement published in
the press Tuesday, 14 October 2003
Actual number of shares listed on or
about Tuesday, 14 October 2003
Share certificates may not be dematerialised or rematerialised between, Monday,
6 October 2003 and Friday, 10 October 2003, both days inclusive.
For and on behalf of the Board.
MB GLATT RDEB SASSOON
Chairman Chief Executive Officer
10 September 2003
Consolidated balance sheet
2003 2002
Audited Audited
R"000 R"000
ASSETS
Short-term interbank funds 185 848 196 224
Short-term negotiable securities 10 343 11 354
Accounts receivable 141 730 121 271
Advances 852 811 778 052
Investments 20 042 15 820
Deferred taxation 5 202 6 341
Property, plant and equipment 40 071 45 713
Total assets 1 256 047 1 174 775
LIABILITIES AND EQUITY
Liabilities
Interbank funding 73 913 89 391
Deposits 248 304 268 823
Accounts payable 119 549 101 807
Debentures 605 696 522 703
Deferred taxation 28 723 27 649
Total liabilities 1 076 185 1 010 373
Minority interest 11 453 8 606
Equity
Share capital 248 237
Share premium 16 484 16 495
Distributable reserves 148 862 139 064
Non-distributable reserves 2 815 -
Total equity 168 409 155 796
Total liabilities and equity 1 256 047 1 174 775
Commitments and contingencies 28 782 26 455
Number of shares in issue at
end of the year (`000) 24 837 23 723
Net asset value per share (cents) 678 657
KEY RATIOS
Return on average equity (%) 12,6 24,2
Return on average total assets (%) 1,7 3,3
Consolidated income statement
2003 2002
Audited Audited
R"000 R"000
Interest income 192 425 139 270
Interest expense 127 666 85 024
Net interest income 64 759 54 246
Other income 156 722 156 116
Foreign exchange (losses)/income (19 755) 34 983
Total income 201 726 245 345
Provisions for credit losses (6 485) 11 083
Income after provisions 208 211 234 262
Operating expenses 176 811 187 724
Income before taxation 31 400 46 538
Taxation 9 141 11 003
Income after taxation 22 259 35 535
Minority interest 1 876 1 086
Earnings attributable to ordinary
shareholders 20 383 34 449
Weighted average number of shares
in issue ("000) 24 569 23 323
Headline earnings per share (cents) 83,0 147,7
Earnings per share (cents) 83,0 147,7
Dividend per share (cents) 33 63
STATEMENT OF CHANGES IN EQUITY
2003 2002
Audited Audited
R"000 R"000
Share capital 248 237
Opening balance 237 228
Shares issued 11 9
Share premium 16 484 16 495
Opening balance 16 495 15 013
Shares issued (11) 1 482
Distributable reserves 148 862 139 064
Opening balance 139 064 114 228
AC133 transitional adjustment at
1 July 2002 2 046 -
Restated balance 141 110 114 228
Earnings attributable to ordinary
shareholders 20 383 34 449
Available-for-sale portfolio fair
value adjustment (1 399) -
Transfer to non-distributable reserve* (2 815) -
Dividend (8 417) (9 613)
Non-distributable reserve 2 815 -
Transfer from distributable reserves* 2 815 -
Total 168 409 155 796
Regulatory reserve created to meet the minimum general provisioning requirements
in terms of the Regulations to the Banks Act.
CONSOLIDATED CASH FLOW INFORMATION
2003 2002
Audited Audited
R"000 R"000
Net cash (outflow)/inflow from:
Operating activities (71 145) (163 339)
Investing activities (8 728) (18 689)
Financing activities 83 964 169 196
Net increase/(decrease) in cash and
cash equivalents 4 091 (12 832)
Cash and cash equivalents at
beginning of the year 118 187 131 019
Cash and cash equivalents at end of
the year 122 278 118 187
SEGMENTAL EARNINGS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS ANALYSIS
2003 2002
Audited Audited
R"000 R"000
Banking 18 803 27 674
Freight 2 743 1 630
Investment Advisory and Asset Management (529) 5 948
Other (634) (803)
Total 20 383 34 449
This and additional information is available on our website: www.sasfin.com
President: S E Sassoon * Chairman: M B Glatt (Non-executive)
Executive directors: R D E B Sassoon * (Chief Executive Officer), A W Greenstein
(Managing Director)Non-executive directors: C N Axten, E T B Blight, D Paizes,
M L Smith
Company secretary: S K Erasmus *British
Registered office: Sasfin Place, 13-15 Scott Street, Waverley, 2090,
Johannesburg
Tel: +27 11 809-7500 Fax: +27 11 887-6167/2489
Lead sponsor: KPMG Inc Joint Sponsor: Sasfin Corporate Finance, a division of
Sasfin Bank Limited
Websites: www.sasfin.com www.sfpsecurities.com
Transfer secretaries: Computershare Limited
70 Marshall Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
Company registration number: 1987/002097/06
Date: 10/09/2003 10:09:37 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
