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Sasfin Holdings Limited - Financial Report
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
("Sasfin" or "the Group" or "the Company")
Company registration number: 2000/006082/06
Share code: SFN ISIN: ZAE000006565
INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2003, TRADING
STATEMENT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Headline earnings Headline earnings per
R30 million share up 169%
CONSOLIDATED BALANCE SHEET
30 June 2003
Audited
R"000
ASSETS
Short-term interbank funds 185 848
Short-term negotiable securities 10 343
Accounts receivable 141 730
Advances 852 811
Investments 20 042
Deferred taxation 5 202
Property, plant and equipment 40 071
Total assets 1 256 047
LIABILITIES AND EQUITY
Liabilities
Interbank funding 73 913
Deposits 248 304
Accounts payable 119 549
Commercial paper 605 696
Deferred taxation 28 723
Total liabilities 1 076 185
Minority interest 11 453
Equity
Share capital 248
Share premium 16 484
Distributable reserves 148 862
Non-distributable reserves 2 815
Total equity 168 409
Total liabilities and equity 1 256 047
Commitments and contingencies 28 782
Number of shares in issue at
end of period ("000) 24 837
Net asset value per share (cents) 678,1
KEY RATIOS
Operating expenses to total income (%) 87,6
Return on average equity (%) 12,6
Return on total average assets (%) 1,7
31 Dec 2003 31 Dec 2002
Unaudited Unaudited
R"000 R"000
ASSETS
Short-term interbank funds 171 227 187 028
Short-term negotiable securities 13 359 12 803
Accounts receivable 140 677 173 686
Advances 938 587 857 796
Investments 19 878 23 999
Deferred taxation 433 5 810
Property, plant and equipment 38 968 44 617
Total assets 1 323 129 1 305 739
LIABILITIES AND EQUITY
Liabilities
Interbank funding 60 506 91 905
Deposits 251 880 290 132
Accounts payable 112 981 146 729
Commercial paper 663 757 573 710
Deferred taxation 27 077 30 492
Total liabilities 1 116 201 1 132 968
Minority interest 12 520 11 861
Equity
Share capital 257 248
Share premium 16 475 16 484
Distributable reserves 175 676 142 778
Non-distributable reserves 2 000 1 400
Total equity 194 408 160 910
Total liabilities and equity 1 323 129 1 305 739
Commitments and contingencies 28 698 41 316
Number of shares in issue at
end of period ("000) 25 721 24 837
Net asset value per share (cents) 755,8 647,9
KEY RATIOS
Operating expenses to total income (%) 68,5 90,5
Return on average equity (%) 33,8 13,7
Return on total average assets (%) 4,6 1,8
CONSOLIDATED INCOME STATEMENT
Year ended
30 June 2003
Audited
R"000
Interest income 192 425
Interest expense 127 666
Net interest income 64 759
Other income 156 722
Foreign exchange income/(losses) (19 755)
Total income 201 726
Credit losses (6 485)
Income after credit losses 208 211
Operating expenses 176 811
Income before taxation 31 400
Taxation 9 141
Income after taxation 22 259
Minority interest 1 876
Earnings attributable to ordinary shareholders 20 383
Weighted average number of
shares in issue ("000) 24 569
Headline earnings per share (cents) 83,0
Earnings per share (cents) 83,0
Dividend per share (cents) 33
Six months ended
31 Dec 2003 31 Dec 2002
Unaudited Unaudited
R"000 R"000
Interest income 99 165 94 278
Interest expense 54 950 61 528
Net interest income 44 215 32 750
Other income 83 275 78 001
Foreign exchange income/(losses) 418 (9 729)
Total income 127 908 101 022
Credit losses 2 258 (11 130)
Income after credit losses 125 650 112 152
Operating expenses 87 572 91 388
Income before taxation 38 078 20 764
Taxation 7 066 8 851
Income after taxation 31 012 11 913
Minority interest 1 021 1 175
Earnings attributable to ordinary shareholders 29 991 10 738
Weighted average number of
shares in issue ("000) 25 217 24 286
Headline earnings per share (cents) 118,9 44,2
Earnings per share (cents) 118,9 44,2
Dividend per share (cents) - -
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended
30 June 2003
Audited
R"000
Share capital 248
Opening balance 237
Issue of shares 11
Share premium 16 484
Opening balance 16 495
Issue of shares (11)
Distributable reserves 148 862
Opening balance 139 064
AC133 transitional adjustment at 1 July 2002 2 046
Restated balance 141 110
Earnings attributable to ordinary shareholders 20 383
Available-for-sale portfolio fair value adjustment (1 399)
Transfer from/(to) non-distributable reserves (2 815)
Dividend (8 417)
Non-distributable reserves * 2 815
Opening balance 1 400
Transfer (to)/from distributable reserves 1 415
Total equity 168 409
Six months ended
31 Dec 2003 31 Dec 2002
Unaudited Unaudited
R"000 R"000
Share capital 257 248
Opening balance 248 237
Issue of shares 9 11
Share premium 16 475 16 484
Opening balance 16 484 16 495
Issue of shares (9) (11)
Distributable reserves 175 676 142 778
Opening balance 148 862 139 064
AC133 transitional adjustment at 1 July 2002 2 046
Restated balance 148 862 141 110
Earnings attributable to ordinary shareholders 29 991 10 738
Available-for-sale portfolio fair value adjustment (637) 747
Transfer from/(to) non-distributable reserves 815 (1 400)
Dividend (3 355) (8 417)
Non-distributable reserves * 2 000 1 400
Opening balance 2 815
Transfer (to)/from distributable reserves (815) 1 400
Total equity 194 408 160 910
*Regulatory reserve created to meet the minimum general provisioning
requirements in terms of the Regulations to the Banks Act.
CONSOLIDATED CASH FLOW INFORMATION
Year ended
30 June 2003
Audited
R"000
Net cash (outflow)/inflow from:
Operating activities (71 145)
Investing activities (8 728)
Financing activities 83 964
Net increase/(decrease) in cash
and cash equivalents 4 091
Cash and cash equivalents at beginning of period 118 187
Cash and cash equivalents at end of period 122 278
Six months ended
31 Dec 2003 31 Dec 2002
Unaudited Unaudited
R"000 R"000
Net cash (outflow)/inflow from:
Operating activities (52 131) (57 727)
Investing activities (4 128) (3 541)
Financing activities 58 061 51 007
Net increase/(decrease) in cash
and cash equivalents 1 802 (10 261)
Cash and cash equivalents at beginning of period 122 278 118 187
Cash and cash equivalents at end of period 124 080 107 926
SEGMENTAL EARNINGS ANALYSIS
Year ended
30 June 2003
Audited
R"000
Banking 18 803
Freight 2 743
Investment Advisory and Asset Management (529)
Other (634)
Total 20 383
Six months ended
31 Dec 2003 31 Dec 2002
Unaudited Unaudited
R"000 R"000
Banking 28 674 9 994
Freight 1 532 1 651
Investment Advisory and Asset Management 344 523
Other (559) (1 430)
Total 29 991 10 738
NATURE OF BUSINESS
Sasfin is a bank-controlling company listed under the "Financials: Speciality
and other Finance" sector of the JSE Securities Exchange South Africa. The
focus of the Group is to provide a wide range of complementary banking,
financial and related services to its target markets of entrepreneurial
corporate, commercial and private clients.
BUSINESS REVIEW
In our Annual Report for the year ended 30 June 2003, we stated "Sasfin has
managed to expand its business while substantially reducing its overheads,
widening its margins and tightening its controls, which is an ongoing process."
This process has indeed continued with heartening results.
Sasfin completed the re-engineering of its securitisation structure, which is
now in line with international best practice, resulting in more flexible and
cost effective funding for the equipment rentals unit. The reduction in
interest rates has benefited the Group significantly.
A small improvement in the Stockbroking and Corporate Finance divisions was
experienced as a result of improved market conditions.
The Group no longer maintains assets in foreign currencies as it was decided to
convert these assets to Rand during the previous financial year due to the
volatility of exchange rates. In the current period, 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 statutory risk-weighted capital adequacy ratio of Sasfin Bank Limited is
27,6% (2002: 28,4%), which is well above the prescribed minimum of 10%.
FINANCIAL SERVICES SECTOR CHARTER FOR BLACK ECONOMIC EMPOWERMENT
The Group has embraced the principles of this Charter and is aiming for an A
rating. Sasfin has already met the initial qualifying requirements for Human
Resources and is well on its way to achieving a high score in the other areas.
Sasfin has acquired a 33.6% interest in Innovent Rental and Asset Management
Solutions (Pty) Limited, a Black-controlled residual equipment rental company.
BASIS OF ACCOUNTING
The accounting policies applied in the preparation of the unaudited interim
financial statements are in accordance with South African Statements of
Generally Accepted Accounting Practice and are consistent with those applied in
the annual financial statements for the financial year ended 30 June 2003.
In the financial year ended 30 June 2003, Sasfin applied AC133: Financial
Instruments Recognition and Measurement. The interpretation of this complex
accounting standard evolved during the 2003 financial year, creating
difficulties for the business community as well as users of financial
statements. Due to changes in the interpretation of AC133 between publication
of Sasfin"s interim financial results for the six months to 31 December 2002
and the announcement of its results for the financial year ended 30 June 2003,
comparative figures for the six months ended 31 December 2002 have been
restated to be in line with the accounting policy applied in the annual
financial statements for the year ended 30 June 2003. The significant effects
of this restatement are summarised below:
Earnings attributable to ordinary shareholders previously disclosed as R0.7
million have been restated to R10.7 million due to a net adjustment after tax
of R10 million (R14.6 million before tax). The main contributor to this
adjustment is the reversal of general provisions at 1 July 2002 of R14.4
million before tax.
The adjustment to opening distributable reserves at 1 July 2002 was previously
disclosed as an increase of R7.8 million. This adjustment has been decreased by
R5.8 million, resulting mainly from the remeasurement of advances as at 1 July
2002, to R2 million.
DIVIDEND POLICY
It is the Group"s policy to declare an annual dividend at year-end.
PROSPECTS AND TRADING STATEMENT
The Group is projecting enhanced profitability as a result of improved market
conditions, increased margins and better efficiencies. It is expected that the
results for the next six months ending 30 June 2004 will show a substantial
improvement on the results for the comparative period ended 30 June 2003. The
word "substantial" in this context is defined as meaning a difference equal to
or greater than 30%.
The financial information on which this Trading Statement is based has been
reported on by Fisher Hoffman PKF (Jhb) Inc., in their capacity as reporting
accountants, whose report is available for inspection at Sasfin"s registered
office.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are referred to the Trading
Statement and Cautionary Announcement published on SENS on 26 November 2003
and in the press on 27 November 2003, which is hereby withdrawn.
For and on behalf of the Board
M B GLATT R D E B SASSOON
Chairman Chief Executive Officer
25 February 2004
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
Lead sponsor: KPMG Services (Pty) Limited
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
Date: 25/02/2004 11:10:22 AM Produced by the JSE SENS Department
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