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SBV SVN
SBV
Sabvest - Unaudited interim results for the six months ended 30 June 2006
SABVEST LIMITED
Registration number 1987/003753/06
ISIN number: ZAE000006417 - ordinary shares
ISIN number: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
("Sabvest")
Unaudited interim results for the six months ended 30 June 2006
BALANCE SHEET AT 30 JUNE 2006
Unaudited Unaudited Audited
30 June 2006 30 June 2005 31 Dec 2005
R"000 R"000 R"000
Non-current assets 186 440 165 349 171 868
Property, plant and equipment 2 152 1 884 1 835
Deferred tax asset 5 105 4 724 4 758
Share Trust debtors 2 880 2 493 2 674
Medium-term receivables - 12 551 11 397
Investment holdings 176 303 143 697 151 204
Associates* 163 303 140 397 140 330
Long-term 13 000 3 300 10 874
Current assets 32 406 13 074 17 061
Finance advances and
receivables 26 473 10 642 14 841
Short-term investments - 2 409 2 186
Cash balances 5 933 23 34
Total assets 218 846 178 423 188 929
Ordinary shareholders"
equity 209 220 165 067 180 933
Non-current liability 49 49 49
Deferred tax liability 49 49 49
Current liabilities 9 577 13 307 7 947
Interest-bearing debt 6 239 10 338 5 279
Accounts payable 3 338 2 969 2 668
Total equity and liabilities 218 846 178 423 188 929
Net asset value per
share - cents 452 357 391
Net tangible asset value per
share - cents 445 349 384
Net asset value per share
with listed investments in
associates at market
value - cents 518 386 444
Net asset value per share with
investments in associates at
directors" valuation
intrinsic value) - cents 633 482 579
Number of shares in issue less
held in treasury - 000"s 46 275 46 259 46 259
*Includes goodwill of R3,4 million (30 June 2005: R3,4 million)
INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006
Unaudited Unaudited
6 months 6 months
ended ended Audited
30 June 2006 30 June 2005 31 Dec 2005
R"000 R"000 R"000
Gross income from
operations and investments 24 842 16 571 41 814
Dividends received 3 885 3 757 5 485
Interest received 3 185 3 837 7 656
Income on financial
instruments and shares 2 710 1 087 2 879
Fees and sundry income 1 323 1 281 2 314
Fair value adjustment to
investments 1 776 995 3 268
Equity accounted retained
income 11 963 5 614 20 212
Interest paid 474 787 1 330
Net income from operations
and investments 24 368 15 784 40 484
Less: Expenditure 5 027 5 333 11 348
Operating costs 5 307 4 690 9 431
Exceptional items (512) 418 1 469
Depreciation 232 225 448
Net income before taxation 19 341 10 451 29 136
Taxation - deferred (347) (3 856) (3 890)
Net income for the period 19 688 14 307 33 026
Earnings per share - cents 42,6 30,9 71,4
Dividends per share - cents
(Proposed after
interim/year-end) 2,0 - 6,0
Weighted average number of
shares in issue - 000"s 46 268 46 259 46 259
Headline earnings per share
- cents*1 41,2 31,3 74,1
Reconciliation of headline
earnings
Net income for the period 19 688 14 307 33 026
Exceptional gains - group (117) - (427)
Exceptional (gains)/losses
- associates (440) 415 310
Losses/costs arising from former
finance operations 45 3 1 586
Profit on sale of property,
plant and equipment (91) (265) (233)
Headline earnings for
the period 19 085 14 460 34 262
*1 There are no diluting instruments
SUMMARISED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006
Unaudited Unaudited
6 months 6 months
ended ended Audited
30 June 2006 30 June 2005 31 Dec 2005
R"000 R"000 R"000
Cash generated by
operating activities 4 971 2 507 3 536
Cash generated by/(utilised
in)investing activities 2 679 (3 617) 424
Cash effects of financing
activities 66 - -
Cash utilised for the payment
of dividends (2 777) (1 388) (1 388)
Change in cash and cash
equivalents 4 939 (2 498) 2 572
Interest-bearing debt, less
cash balances, at beginning
of period (5 245) (7 817) (7 817)
Interest-bearing debt, less
cash balances, at end
of period (306) (10 315) (5 245)
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2006
Non-
distri- Distri-
Share Share butable butable
capital premium reserve reserve Total
R"000 R"000 R"000 R"000 R"000
Balance as at
1 January 2005 867 50 826 105 227 (5 886) 151 034
Net income for the
year - - - 33 026 33 026
Translation of
foreign subsidiary/
associates - - 211 - 211
Attributable income
of associates - - 19 902 (19 902) -
Movement in
translation and
other reserves of
associates - - 1 640 (3 590) (1 950)
Dividends paid - - - (1 388) (1 388)
Balance as at
31 December 2005 867 50 826 126 980 2 260 180 933
Net income for
the period - - - 19 688 19 688
Translation of
foreign subsidiary/
associates - - 1 782 - 1 782
Attributable income
of associates - - 10 303 (10 303) -
Movement in
translation and
other reserves of
associates - - 9 566 - 9 566
Shares held in
treasury - written
back 2 84 - - 86
Shares held in
treasury (2) (56) - - (58)
Dividends paid - - - (2 777) (2 777)
Balance as at
30 June 2006 867 50 854 148 631 8 868 209 220
Contingent liabilities
The group"s contingent liabilities at 30 June 2006 are as follows:
1. Guarantees or undertakings on behalf of investees or clients R9,3
million (31 December 2005: R2 million), which is expected to reduce to
Rnil over forty months.
2. Put options given by the company to holders of SA Bias redeemable
preference shares which have due dates from 2007 to 2009 R14 million
(31 December 2005: R18 million).
3. Put options given by the company to holders of SA Bias junior loans
which have due dates from 2007 to 2010 R9,2 million (31 December 2005:
R9,2 million).
4. A group company has entered into lease agreements for premises that it
occupies. The amount due over the next three years amounts to R1,5
million (31 December 2005: R1,8 million).
5. A group company has given call options and has been given put options
with regard to the group"s shareholding in Metrofile (Pty) Limited,
which are exercisable by either party under certain circumstances
until 2009.
6. The group has rights and obligations in terms of shareholder or
purchase and sale agreements relating to its present or former
investments.
COMMENTARY
PROFILE
Sabvest is an investment and finance group which was listed in 1988. Its
ordinary and "N" ordinary shares are quoted in the Financials - Equity
Investment Instruments sector of the JSE Limited.
Sabvest has significant minority or joint controlling interests in five
groups which are accounted for as associates.
These are:
Voting Economic
interest interest
Sabvest Industrial
Sun Spray Ingredients (Pty) Limited
(formerly Nutritional Foods
(Pty) Limited) 40,0% 40,0%
SA Bias Industries Limited 50,0% 53,0%
Set Point Technology Holdings Limited 14,0% 14,0%
Sabvest Distribution and Services
Flowmax Holdings Limited 40,0% 40,0%
Korbitec Holdings (Pty) Limited 16,0% 16,0%
Sabvest also has a long-term portfolio of smaller investments which are
accounted for on a fair value basis as follows:
Sabvest Portfolio
Datatec Limited 200 000 shares
Massmart Holdings Limited 100 000 shares
Metrofile (Pty) Limited 5,0%
In addition Sabvest maintains finance advances and debt instrument
portfolios and undertakes corporate finance and other fee and profit
earning activities. Most of the finance advances at the interim date
comprised Metrofile B 2005 - 2009 and Metrofile C 2009 loans (which were
pre-paid by Metrofile in August 2006).
FINANCIAL RESULTS
Headline earnings per share increased by 31% to 41,2 cents. This growth
arose from sound performances by all of the group"s associates and
continued high profitability from the group"s participation in debt
portfolios and instruments. The results of SA Bias Industries were
particularly strong due to excellent performances by its subsidiaries in
Asia.
Shareholders" funds with investments at intrinsic value were
R293 million and net asset value per share calculated on the same basis
increased by 31% to 633 cents per share.
Sabvest"s balance sheet is soundly structured with minimal net gearing and
investments fully funded by shareholders" equity.
Changes in Investment Holdings
In the first half of the year, Sabvest:
* acquired a further 50 000 ordinary shares in Datatec Limited and 25
000 ordinary shares in Massmart Holdings Limited for its long-term
portfolio;
* disposed of its interests in Midsouth Distributors (Pty) Limited and
HDS Tech Holdings (Pty) Limited;
* participated in funding for the purchase of a new consumer debt book
in association with I-Com Services (Pty) limited; and
* disposed of its short-term portfolio.
Certain of Sabvest"s associates concluded significant transactions as
follows:
* Flowmax Holdings acquired 75% of Hytek Limited in the United Kingdom;
* Set Point Technologies acquired Mineral Mining which is a supplier of
conveyer belts to the mining industry; and
* SA Bias Industries disposed of its interest in A & E Threads (Pty)
Limited and Bitrim Zips (Pty) Limited (subsequent to the interim
reporting date). It also commenced a share buy-back programme which
has had the effect of increasing Sabvest"s economic interest in SA
Bias.
Subsequent events
Subsequent to the interim reporting date, Sabvest has disposed of its
profit participations in distressed debt portfolios held through The
Pioneer Trust and has also received early repayment of corporate debt
instruments held by it at a discount to face value.
As a result of these events Sabvest has realised a one-off trading profit
of R27 million after tax which equates to earnings of 59 cents per share.
This unbudgeted profit will be accounted for in the second six-month period
and will increase the group"s headline earnings per share and earnings per
share for the full year accordingly.
Dividend policy
The extent of dividends is influenced by operating cash flows and receipts
from the non-core components of investments that are not earmarked for new
projects.
Dividend payments were previously considered once a year but the group has
now decided to introduce an interim dividend with immediate effect.
An interim dividend of 2 cents per share has now been declared.
Legal actions
There has been no change in the group"s assessment of the legal actions
arising from the disposal of a subsidiary in 1993, as explained in the 2002
- 2005 annual reports. The group does not anticipate any losses arising
from these.
Accounting policies
The unaudited interim financial statements have been prepared in terms of
International Financial Reporting Standards (IFRS) and comply with IAS34 -
Interim Financial Reporting. The accounting policies used are consistent
with those applied to the audited financial statements for the year ended
31 December 2005.
Prospects
All of the group"s associates and investments are performing well and in
addition the group has made a substantial one-off trading profit as
described in Subsequent events above. Accordingly Sabvest expects a marked
increase in earnings for the current year.
For and on behalf of the Board
Haroon Habib Christopher Seabrooke Raymond Pleaner
Chairman Chief Executive CFO
1 September 2006
Sandton
DIVIDEND DECLARATION
Notice is hereby given that a dividend of 2 cents (2005: 0 cents) per
ordinary share and "N" ordinary share for the six months ended 30 June 2006
has been declared payable to shareholders in accordance with the under
mentioned timetable:
Last date to trade "CUM" dividend Friday, 15 September 2006
Trading "EX" dividend commences Monday, 18 September 2006
Record date Friday, 22 September 2006
Dividend payment date Tuesday, 26 September 2006
No dematerialisation or rematerialisation of share certificates will be
allowed for the period from Monday, 18 September 2006 to Friday, 22
September 2006, both days inclusive.
Registered address:
4 Commerce Square, 39 Rivonia Road, Sandhurst, Sandton 2196
Communications:
Postal address: PO Box 78677, Sandton 2146, Republic of South Africa
Communications:
Telephone: (011) 268 2400 * Fax: (011) 268 2422 * e-mail:
ho@sabvest.com
Transfer secretaries:
Computershare Investor Services 2004 (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), NSH Hughes#, DNM Mokhobo#, GE Nel, R Pleaner*, BJT
Shongwe#
*Executive #Independent
ISIN: ZAE000006417 - ordinary shares
ISIN: ZAE000012043 - "N" ordinary shares
Share code: SBV - ordinary shares
Share code: SVN - "N" ordinary shares
Date: 01/09/2006 07:00:14 AM Produced by the JSE SENS Department
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