| Thu 2 Mar 2006, 12:00 | | Sasfin - Interim Results |
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SFN SFNP
SFN
Sasfin - Interim Results
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
(Ordinary share code: SFN & ISIN: ZAE000006565)
(Preference share code: SFNP & ISIN: ZAE000060273)
("Sasfin" or "the Group" or "the Company")
UNAUDITED INTERIM RESULTS for the six month period ended 31 December 2005
Total assets up 22%
Heps up 50%
Efficiency ratio improves by11%
Consolidated balance sheet
31 Dec 31 Dec 30 June
2005 2004 2005
% Restated Restated
change R"000 R"000 R"000
ASSETS
Short-term interbank funds 18 381 699 322 400 296 553
Short-term negotiable securities 36 604 19 348 19 377
Accounts receivable 36 213 427 157 342 262 703
Advances 16 1 216 401 1 050 169 1 089 708
Investments 116 80 709 37 403 53 157
Investments in associated
and joint venture companies 4 953 - 4 301
Deferred taxation 407 614 3 053
Property, plant and equipment 45 209 40 308 43 243
Total assets 22 1 979 409 1 627 584 1 772 095
EQUITY AND LIABILITIES
Equity
Ordinary share capital
and premium 22 132 19 021 19 814
Reserves 311 587 220 216 255 588
Regulatory general credit-risk
reserve 4 700 - 4 400
Ordinary shareholders" equity 41 338 419 239 237 279 802
Minority interest 18 919 14 728 16 997
Preference share capital
and premium 99 646 99 646 99 646
Total equity 29 456 984 353 611 396 445
Liabilities
Interbank funding 20 299 32 042 35 801
Deposits 50 600 403 401 531 402 020
Accounts payable 174 631 130 848 213 316
Provisions 6 810 6 459 10 372
Notes 669 799 667 624 668 223
Deferred taxation 50 483 35 469 45 918
Total liabilities 1 522 425 1 273 973 1 375 650
Total equity and liabilities 1 979 409 1 627 584 1 772 095
Commitments and contingencies 78 928 42 010 55 429
Consolidated income statement
31 Dec 31 Dec 30 June
2005 2004 2005
% Restated Restated
change R"000 R"000 R"000
Interest income 102 695 99 421 196 115
Interest expense 46 492 44 167 84 960
Net interest income 56 203 55 254 111 155
Other income 38 142 455 103 002 211 602
Total income 26 198 658 158 256 322 757
Impairment of advances 7 220 6 702 7 154
Operating income 26 191 438 151 554 315 603
Operating expenses 12 112 124 100 184 197 231
Profit from operations 54 79 314 51 370 118 372
Share of associated and joint
venture companies" income 2 536 - 1 321
Profit before taxation 59 81 850 51 370 119 693
Taxation 19 908 13 836 28 682
Profit after taxation 65 61 942 37 534 91 011
Profit attributable to:
Minority shareholders 2 482 1 821 4 890
Preference shareholders 4 015 - 1 017
Profit attributable
to ordinary
shareholders 55 55 445 35 713 85 104
Consolidated statement of changes in equity
31 Dec 31 Dec 30 June
2005 2004 2005
Restated Restated
R"000 R"000 R"000
Ordinary share capital and premium 22 132 19 021 19 814
Opening balance 19 814 16 976 16 976
Issue of shares 2 318 2 045 2 838
Reserves 311 587 220 216 255 588
GAAP reported balance 255 051 206 908 206 908
IFRS transition (205) 184 184
Share-based payment reserve 938 536 742
Profit attributable to ordinary and
preference shareholders 59 460 35 713 86 121
Available-for-sale portfolio fair value
adjustment 23 877 281 1 121
Transfer (to)/from regulatory general
credit-risk reserve (300) 1 000 (3 400)
Preference share dividend (4 015) - (1 017)
Ordinary share dividend (23 219) (24 406) (35 071)
Regulatory general credit-risk reserve 4 700 - 4 400
Opening balance 4 400 1 000 1 000
Transfer from/(to) distributable reserves 300 (1 000) 3 400
Ordinary shareholders" equity 338 419 239 237 279 802
Minority interest 18 919 14 728 16 997
GAAP reported balance 16 639 12 378 12 378
IFRS transition 358 341 342
Ordinary share dividends (600) - (1 360)
Available-for-sale portfolio fair value
adjustment 40 188 747
Profit attributable to minority
shareholders 2 482 1 821 4 890
Preference share capital and premium 99 646 99 646 99 646
Opening balance 100 000 - -
Issue of shares - 100 000 100 000
Set off of costs relating to issue
of shares (354) (354) (354)
Total equity 456 984 353 611 396 445
Consolidated cash flow information
31 Dec 31 Dec 30 June
2005 2004 2005
Restated Restated
R"000 R"000 R"000
Net cash (outflow)/inflow from:
Operating activities 115 251 59 415 53 271
Investing activities (40) (17 807) (43 398)
Financing activities 2 664 101 257 103 415
Net increase in cash and cash
equivalents 117 875 142 865 113 288
Cash and cash equivalents
at beginning of the period 280 129 166 841 166 841
Cash and cash equivalents
at end of the period 398 004 309 706 280 129
Financial highlights
31 Dec 31 Dec 30 June
% 2005 2004 2005
change Restated Restated
SHARE STATISTICS
Earnings per ordinary share
(cents)
- Headline 50 207,1 138,2 326,4
- Basic 54 212,4 138,2 328,3
Diluted headline earnings
per ordinary share (cents)
- Headline 50 200,2 133,3 314,5
- Basic 54 205,3 133,3 316,3
Number of ordinary shares
in issue at end of
the period (R"000) 26 288 25 971 26 035
Weighted average number
of shares in issue (R"000) 26 103 25 843 25 923
Diluted weighted average
shares in issue (R"000) 27 002 26 788 26 904
Dividends per ordinary share
relating to profit
for the period
(cents) 51 62,0 41,0 130,0
Of which interim 62,0 41,0 41,0
Of which final 89,0
Dividends per preference share
relating to profit
for the period
(cents) 396,99 503,23
Of which dividend number 1 101,72
Of which dividend number 2 401,51
Of which dividend number 3 396,99
FINANCIAL PERFORMANCE
Net asset value
per ordinary share (cents) 40 1 287,4 921,2 1 074,7
Annualised return on ordinary
shareholders" average
equity (%) 14 37.4 32.9 33.5
Annualised return on total
average assets (%) 25 6.0 4.8 5.4
Efficiency ratio (%) (11) 56.4 63.3 61.1
HEADLINE EARNINGS RECONCILIATION R"000 R"000 R"000
Profit attributable to ordinary
shareholders 55 445 35 713 85 104
Net profit on disposal
of property,
plant and equipment (33) - (488)
Net profit on disposal
of investments (1 345) - -
Headline earnings 51 54 067 35 713 84 616
Headline earnings segmental analysis
31 Dec 31 Dec 30 June
2005 2004 2005
% Restated Restated
change R"000 R"000 R"000
Business Banking1 46 27 915 19 065 46 807
Sasfin Capital2 51 13 368 8 824 15 637
Sasfin Personal Wealth3 64 10 469 6 377 17 141
Specialised Services4 60 2 315 1 447 5 031
Total 51 54 067 35 713 84 616
Notes:
1. Business Banking comprises Rental Finance and Business Finance (Trade,
Debtor and Capital Equipment Finance).
2. Sasfin Capital comprises Private Equity, Corporate Finance, JSE Sponsor,
Investment Banking and Treasury, which includes interest charged to operating
divisions on Group capital.
3. Sasfin Personal Wealth comprises Stockbroking and Portfolio Management,
Funds Management, Asset Management and Financial Planning.
4. Specialised Services comprises International Forwarding and Clearing,
Healthcare Consulting, Regulation 28 Consulting and Short-term Insurance.
commentary
NATURE OF BUSINESS
Sasfin is a bank-controlling company listed under the "Financials: Investment
Services" sector of the JSE Limited. Sasfin"s subsidiaries provide a wide
range of complementary banking, financial and related services.
BUSINESS REVIEW
Headline earnings per share for the period under review increased by 50%
(2004: 17%) as compared with the restated headline earnings for the
corresponding period in the previous financial year.
All divisions of the Group are trading well and made meaningful
contributions to Group headline earnings.
The efficiency ratio improved to 56.4% from 63.3% in the comparable period.
Total Group assets increased to almost R2 billion (2004: R1,6 billion) which
is reflective of the increased level of activity in all divisions.
Annualised return on ordinary shareholders" average equity increased to
37.4% (2004: 32.9%).
The statutory risk-weighted capital adequacy of Sasfin Bank Limited ("the
Bank"), currently a wholly-owned subsidiary of the Company (but which will
reduce to a 90%-owned subsidiary in terms of the BEE transaction set out
below), is 19% (2005: 18.3%). After the implementation of the BEE
transaction, the Bank"s statutory risk-weighted capital adequacy will
increase to 26%.
THE FINANCIAL SECTOR CHARTER
The Group subscribes to the Financial Sector Charter and has made good
progress towards meeting Charter targets.
On 12 December 2005, Sasfin announced that, subject to South African Reserve
Bank approval, with effect from 1 January 2006, InnoVent Investment Holdings
(Pty) Limited, ("InnoVent") would, for a consideration of R66,7 million,
subscribe for an issue of 10% of the Bank"s equity. InnoVent is a
black-owned and operated financial services holding company associated with
Sasfin, which, through its wholly-owned subsidiaries, focuses on both
user-sourced, larger- value structured residual rental finance solutions and
in supplier-sourced standard rental finance solutions. Sasfin has financed
the transaction out of its own resources by subscribing for cumulative
redeemable preference shares in two special purpose vehicles wholly-owned by
InnoVent. Approval of the South African Reserve Bank has now been obtained.
Appropriate appointments to the Board will be announced in due course.
OTHER STRATEGIC DEVELOPMENTS
In July 2005, Sasfin increased its Investor Participation in Sasfin - MDM
Private Equity Fund I from 13.6% to 52.4% for an incremental investment
consideration of R34,8 million. In addition, Sasfin Private Equity Fund II,
a R100 million generalist private equity fund, has been launched and its
first investment was concluded in January 2006. The Board has resolved to
issue a further R100 million of preference shares, details of which will be
announced in due course.
Sasfin Investment and Asset Managers (Proprietary) Limited ("SIAM") has
concluded a transaction with PIB Financial Services (Proprietary) Limited,
an established financial planning organisation, in terms of which these
businesses will be sold to and merged with the businesses of SIAM with
effect from 1 January 2006. Management owns 32.5% of the equity in the
enlarged SIAM, with the balance owned by the Bank.
BASEL II
The Group is on schedule with plans for the implementation of Basel II.
PROSPECTS
The Group"s products and services are in strong demand in the current
buoyant economic environment. However, growth in earnings for the remainder
of the year is unlikely to be maintained at the same rate.
Sasfin would not, however, be immune to the effects of a cyclical economic
downturn.
A strong infrastructure of human resources and support systems has been
developed to service the growing client base.
The Group"s operations are supported by a high level of capital adequacy.
The Group strives to be "The Preferred Banking Group for the Entrepreneur".
BASIS OF PREPARATION AND PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The Group implemented International Financial Reporting Standards ("IFRS")
during the period under review, the effective date of transition being 1 July
2005. The conversion to IFRS has not resulted in any material adjustments and
no additional disclosure as stated in IFRS 1 and IAS 34 on first-time adoption
is required.
The abridged interim consolidated financial statements are prepared in
accordance with IAS 34 - "Interim Financial Reporting" and the accounting
policies applied conform to IFRS.
The shares owned by the Group in JSE Limited (previously JSE rights) have been
designated by the Board as "available-for-sale" financial instruments and, in
accordance with revised IAS 39, changes in fair value are taken directly to
equity. The fair value of this shareholding, as determined by reference to the
Over-the-Counter market, amounted to R29,4 million, which gives rise to a
"mark to market" adjustment of R27,9 million. This amount, net of a provision
for deferred Capital Gains Tax, is not included in profits but is included in
equity.
PREFERENCE SHARE DIVIDEND
Notice is hereby given that preference dividend number 3 amounting to 396,99
cents per preference share ("preference dividend") has been declared for the
period 1 July 2005 to 31 December 2005 on one million preference shares issued
at R100,00 each. The preference dividend is payable to holders of preference
shares recorded in the register of the Company at the close of business on
Friday, 31 March 2006.
The salient dates relating to the preference dividend are as follows:
2006
Last day to trade cum the preference dividend Friday, 24 March
Preference shares commence trading ex the
preference dividend Monday, 27 March
Preference dividend record date Friday, 31 March
Payment of preference dividend Monday, 3 April
Preference shares may not be dematerialised or rematerialised between Monday,
27 March 2006 and Friday, 31 March 2006, both days inclusive.
INTERIM ORDINARY SHARE DIVIDEND
The Group has a stated policy of annually declaring ordinary share dividends
equal to 40% of headline earnings. Without changing this policy, the Board of
Sasfin has resolved to pay an interim dividend as set out below.
Notice is hereby given that an interim ordinary share dividend of 62 cents
(2004: 41 cents) per share ("interim dividend") has been declared and is
payable to shareholders recorded in the register of the Company at the close
of business on Thursday, 13 April 2006.
The salient dates relating to the interim dividend are as follows:
2006
Last day to trade cum the interim dividend Thursday, 6 April
Shares commence trading ex the interim dividend Friday, 7 April
Record date Thursday, 13 April
Payment of interim dividend Tuesday, 18 April
Ordinary shares may not be dematerialised or rematerialised between Friday,
7 April 2006 and Thursday, 13 April 2006, both days inclusive.
For and on behalf of the Board
M B GLATT R D E B SASSOON
Chairman Chief Executive Officer
2 March 2006
This announcement and additional information (including the reconciliation of
previous SA GAAP to IFRS) 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)
M Segal
*British
Non-executive directors: C N Axten, E T B Blight, D Paizes, M L Smith
Acting company secretary: S Jackson
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 Capital
(a division of Sasfin Bank Limited)
Date: 02/03/2006 12:01:25 PM Produced by the JSE SENS Department
