| Mon 6 Sep 2004, 11:13 | | Group Results for the year ended 30 June 2004 |
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Sasfin - Audited Group Results for the year ended 30 June 2004 and withdrawal
of cautionary announcement
SASFIN HOLDINGS LIMITED
(Incorporated in the Repubic of South Africa)
(Share code: SFN ISIN: ZAE000006565)
(`Sasfin` or `the Group` or `the Company`)
Audited Group Results for the year ended 30 June 2004 and withdrawal of
cautionary announcement
* Headline earnings R60 million up 195%
* Headline earnings per share up 185%
* Net asset value per share up 29%
* Average return on assets 4.6%
* Average return on equity 30.6%
Consolidated balance sheet
30 June 2004 30 June 2003
Audited Audited
R`000 R`000
ASSETS
Short-term interbank funds 188 535 185 848
Short-term negotiable securities 14 320 10 343
Accounts receivable 159 507 141 730
Advances 959 745 852 811
Investments 19 497 20 042
Deferred taxation 520 5 202
Property, plant and equipment 40 547 40 071
Total assets 1 382 671 1 256 047
LIABILITIES AND EQUITY
Liabilities
Interbank funding 36 014 73 913
Deposits 268 568 248 304
Accounts payable 135 806 115 294
Provisions 7 277 4 255
Commercial paper 666 679 605 696
Deferred taxation 31 065 28 723
Total liabilities 1 145 409 1 076 185
Minority interest 12 378 11 453
Equity
Share capital 258 248
Share premium 16 718 16 484
Distributable reserves 206 908 148 862
Non-distributable reserves 1 000 2 815
Total equity 224 884 168 409
Total liabilities and equity 1 382 671 1 256 047
Commitments and contingencies 35 716 28 782
Number of shares in issue at end of year
(`000) 25 759 24 837
Net asset value per share (cents) 873,0 678,1
KEY RATIOS
Operating expenses to total income (%) 68.2 87.6
Return on average equity (%) 30.6 12.6
Return on total average assets (%) 4.6 1.7
Consolidated income statement
30 June 2004 30 June 2003
Audited Audited
R`000 R`000
Interest income 192 103 192 425
Interest expense 96 318 127 666
Net interest income 95 785 64 759
Other income 174 358 156 722
Foreign exchange income/(losses) 350 (19 755)
Total income 270 493 201 726
Credit losses/(reversals) 760 (6 485)
Income after credit losses 269 733 208 211
Operating expenses 184 383 176 811
Income before taxation 85 350 31 400
Taxation 23 261 9 141
Income after taxation 62 089 22 259
Minority interest 1 852 1 876
Earnings attributable to ordinary shareholders 60 237 20 383
Weighted average number of shares in issue
(`000) 25 472 24 569
Headline earnings per share (cents) 236,5 83,0
Earnings per share (cents) 236,5 83,0
Diluted earnings per share (cents) 232,5 83,0
Dividend per share (cents) 94 33
Consolidated statement of changes in equity
30 June 2004 30 June 2003
Audited Audited
R`000 R`000
Share capital 258 248
Opening balance 248 237
Issue of shares 11 11
Consolidation of the Sasfin Share Incentive
Trust* (1) -
Share premium 16 718 16 484
Opening balance 16 484 16 495
Issue of shares 1 915 (11)
Consolidation of the Sasfin Share Incentive
Trust* (1 681) -
Distributable reserves 206 908 148 862
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 60 237 20 383
Available-for-sale portfolio fair value
adjustment (1 404) (1 399)
Transfer from/(to) non-distributable reserves 1 815 (2 815)
Consolidation of the Sasfin Share Incentive
Trust* 696 -
Dividend (3 298) (8 417)
Non-distributable reserves** 1 000 2 815
Opening balance 2 815 -
Transfer (to)/from distributable reserves (1 815) 2 815
Total equity 224 884 168 409
Opening balance 2 815 -
Transfer (to)/from distributable reserves (1 815) 2 815
Total equity 224 884 168 409
* As required by the JSE Securities Exchange South Africa, the Group`s share
incentive scheme - the Sasfin Share Incentive Trust - has been
prospectively consolidated.
** Regulatory reserve created to meet the minimum general provisioning
requirements in terms of the Regulations to the Banks Act.
Segmental earnings analysis
30 June 2004 30 June 2003
Audited Audited
R`000 R`000
Banking 55 707 18 803
Investment Advisory and Asset Management 2 831 (529)
Freight 2 778 2 743
Other (1 079) (634)
Total 60 237 20 383
Consolidated cash flow statement
30 June 2004 30 June 2003
Audited Audited
R`000 R`000
Net cash (outflow)/inflow from:
Operating activities (4 729) (71 145)
Investing activities (11 706) (8 728)
Financing activities 60 998 83 964
Net increase in cash and cash equivalents 44 563 4 091
Cash and cash equivalents at beginning of year 122 278 118 187
Cash and cash equivalents at end of year 166 841 122 278
Commentary
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, whose
subsidiaries provide a wide range of complementary banking, financial and
related services to its target market of entrepreneurial corporate, commercial
and private clients.
REVIEW
It is pleasing to report that earnings for the year under review have increased
by 195% to R60,2 million, representing returns on equity of 30.6% (2003: 12.6%)
and on assets of 4.6% (2003: 1.7%).
Factors that have resulted in the Group`s improved performances include:
* focusing on its core competency of relationship banking and investment
solutions for the high- net-worth individual and entrepreneurial corporate
and commercial finance markets.
* reducing costs and improving efficiency and productivity.
* maintaining sound Corporate Governance and conservative Risk Management
policies.
* curtailing foreign exchange losses by eliminating the foreign currency
exposures of its offshore subsidiary.
* increasing interest margins by:
- switching offshore interest earnings to higher-yielding Rand-based
investments and receivables, and
- benefiting from the reduction in domestic interest rates on borrowings.
* completing the re-engineering of its securitisation structure, which was
first floated in 1991, in line with international best practice. This not
only reduces cost of funds, but also allows for more flexibility, thereby
enhancing Sasfin`s competitive position.
The statutory risk-weighted capital adequacy of Sasfin Bank Limited is 25.8%
(2003: 35.6%).
CORPORATE ACTIVITIES
Sasfin concluded the following transactions during the year:
* in September 2003, Sasfin`s private client wealth management arm, Sasfin
Frankel Pollak Securities (Pty) Limited (`SFPS`), facilitated the creation
of Legends Financial Services (Pty) Limited (`Legends`), a black-owned and
controlled investment management business, in which African Legends Limited
is the major shareholder. Sasfin has an option to acquire a 10% interest in
Legends before 31 December 2004.
* in December 2003, Sasfin Bank Limited acquired a 33.6% shareholding in
InnoVent Rental and Asset Management Solutions (Pty) Limited (`InnoVent`),
a new black-owned company focusing on the rental of technology assets to
the medium to large corporate sector. InnoVent complements Sasfin`s
equipment finance unit, as it is well positioned to cater for the corporate
market`s growing need for residual-based rentals for the procurement of
technology.
* with effect from 31 January 2004, Sasfin sold its 25.1% interest in Fingro
Management and Financial Services (Pty) Limited to management as it was not
core to Sasfin`s activities.
* with effect from 31 May 2004, Sasfin disposed of its interest in
Commonwealth Trust (Pty) Limited to its previously-disadvantaged co-
shareholders, as it has become clear that insolvency practitioners should
preferably operate independently of banks.
The following transactions were concluded post year-end:
* with effect from 1 July 2004, Sasfin disposed of its Employee Benefits
Administration and Consulting business to a company in which Sasfin
Investment and Asset Managers (Pty) Limited (`SIAM`) will retain a 30%
share with 10% earmarked for Black Economic Empowerment.
The remaining 60% share will be owned by Pioneer Financial Planning Services
(Pty) Limited, with whom SIAM has a close working relationship.
* the formation, subject to South African Reserve Bank approval, of an
offshore financial services joint venture, to be known as SasCred Financial
Services Limited.
THE FINANCIAL SECTOR CHARTER
Sasfin has subscribed to the Financial Sector Charter in order to fast track the
development of the previously-disadvantaged people of South Africa. A task force
has been put in place with the objective of optimal compliance with the Charter.
Some success can be reported in achieving the employment, investment,
procurement and corporate social investment targets set and Sasfin is currently
still in the process of identifying suitable Black shareholders and directors.
BASIS OF ACCOUNTING
These results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and the accounting policies used in the
preparation of the prior year`s annual financial statements have been
consistently applied.
AUDIT OPINION
The Group annual 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.
DIVIDEND
Notice is hereby given that a cash dividend of 94 cents per share (2003: cash
dividend of 33 cents per share with a scrip dividend alternative) (`the
dividend`) has been declared, payable to shareholders recorded in the books of
the Company at the close of business on Friday, 12 November 2004. Shareholders
are advised that the last day to trade `cum` dividend will be Friday, 5 November
2004. Shares will trade `ex` dividend as from Monday, 8 November 2004, and the
record date will be Friday, 12 November 2004. Payment will be made on Monday, 15
November 2004. Shares may not be dematerialised or rematerialised during the
period Monday, 8 November 2004 to Friday, 12 November 2004, both days inclusive.
PROSPECTS
With a strong and growing entrepreneurial client base, Sasfin is now well
positioned to be the banker of choice for this target market.
While an increase in interest rates would impair profitability, the consensus
view is that interest rates will remain steady for the foreseeable future, with
any increase likely to be modest. Under this scenario and given the cost saving
measures that have been achieved, earnings growth is likely to return to normal
levels in the year ahead.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the Trading Statement and Cautionary Announcement
published on SENS on 25 February 2004 and in the press on 26 February 2004,
which is hereby withdrawn.
For and on behalf of the Board
M B Glatt R D E B Sassoon
Chairman Chief Executive Officer
6 September 2004
This announcement and additional information is available on our website:
www.sasfin.com
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: SK Erasmus * British
Registered office: Sasfin Place, 13-15 Scott Street,
Waverley, 2090, Johannesburg
Tel: +27 11 809-7500
Fax: +27 11 887-6167/2489
Websites: www.sasfin.com
www.sfpsecurities.com
Transfer secretaries: Computershare Investor Services
2004 (Pty) Limited
70 Marshall Street,
Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Company registration number: 1987/002097/06
Lead sponsor: KPMG Services (Pty) Limited
Joint sponsor: Sasfin Corporate Finance,
a division of Sasfin Bank Limited
Date: 06/09/2004 10:50:27 AM Produced by the JSE SENS Department
