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SFN SFNP
SFN
SFN/SFNP - Sasfin - Unaudited Interim Results for the six month period ended 31
December 2006
Sasfin Holdings Limited
(Incorporated in the Republic of South Africa)
("Sasfin" or "the Group" or "the Company")
(Ordinary share code: SFN
ISIN: ZAE000006565)
(Preference share code: SFNP
ISIN: ZAE000060273)
Unaudited interim results
for the six month period ended 31 December 2006
* Profit for the period R79,6 million up 29%
* Headline earnings per ordinary share 244 cents up 18%
* Return on ordinary shareholders` average equity 33,4%
* Return on total average assets 5,9%
* Efficiency ratio constant at 56,3%
Consolidated balance sheet
31 Dec 31 Dec 30 June
2006 2005 2006
% Unaudited Unaudited Audited
change R`000 R`000 R`000
Assets
Cash and cash 399 042 392 356 681 635
equivalents
Short-term negotiable 28 768 25 947 24 922
securities
Loans and advances to 15 1 398 708 1 216 401 1 189 078
customers
Other receivables 350 365 211 961 394 783
Taxation 113 1 466 171
Investment securities 89 152 698 80 709 61 157
Investments in 53 014 4 953 49 413
associated and joint
venture companies
Property and equipment 47 984 45 209 49 376
Intangible assets and 10 592 - 9 080
goodwill
Deferred tax asset 3 359 407 463
Total assets 24 2 444 643 1 979 409 2 460 078
Liabilities
Deposits from banks 32 626 20 299 78 512
Deposits from customers 13 678 624 600 403 626 851
Other payables 285 873 158 601 320 900
Debt securities issued 673 432 669 799 670 830
Provisions 7 081 6 810 10 670
Taxation 13 688 16 030 39 670
Deferred tax liability 45 273 50 483 44 017
Total liabilities 1 736 597 1 522 425 1 791 450
Equity
Ordinary share capital 23 765 22 132 23 525
and share premium
Reserves 32 416 437 316 287 377 186
Preference share 199 278 99 646 199 278
capital and share
premium
Total equity 639 480 438 065 599 989
attributable to equity
holders of the parent
Minority interest 68 566 18 919 68 639
Total equity 55 708 046 456 984 668 628
Total liabilities and 24 2 444 643 1 979 409 2 460 078
equity
Commitments and 123 171 78 928 265 183
contingencies
Consolidated income statement
31 Dec 31 Dec 30 June
2006 2005 2006
% Unaudited Unaudited Audited
change R`000 R`000 R`000
Interest income 123 291 102 695 205 143
Interest expense 60 020 46 492 92 552
Net interest income 13 63 271 56 203 112 591
Impairment losses on (29) 5 152 7 220 7 571
loans and advances
Net income from lending 19 58 119 48 983 105 020
activities
Other income 28 182 202 142 455 366 297
Operating income 240 321 191 438 471 317
Operating expenses 23 138 271 112 124 245 444
Profit from operations 102 050 79 314 225 873
Share of associated and 4 217 2 536 4 277
joint venture
companies` income
Profit before income 30 106 267 81 850 230 150
tax
Income tax expense 26 653 19 908 55 472
Profit for the period 29 79 614 61 942 174 678
Profit attributable to:
Minority interest 7 113 2 482 10 244
Preference shareholders 7 482 4 015 7 985
Equity holders of the 17 65 019 55 445 156 449
parent
Profit for the period 29 79 614 61 942 174 678
Basic earnings per 18 244 207 404
ordinary share (cents)
Basic diluted earnings 19 237 200 391
per ordinary share
(cents)
Consolidated statement of changes in equity
Ordinary Distri- Share- Available- Regulatory
share butable based for-sale general
capital
and premium reserve payment reserve credit-risk
reserve reserve
R`000 R`000 R`000 R`000 R`000
Balance at 30 19 814 253 097 742 1 749 4 400
June 2005
Available-for- - - - 23 877 -
sale
portfolio
fair value
adjustment
Profit for - 59 460 - - -
the period
Total income - 59 460 - 23 877 -
and expense
for the
period
Issue of 2 318 - - - -
shares
Change in - - - - -
shareholding
of
subsidiaries
Equity- - - 196 - -
settled share-
based
payments
Transfer to - (300) - - 300
regulatory
general
credit-risk
reserve
Preference - (4 015) - - -
share
dividends
Ordinary - (23 219) - - -
share
dividends
Balance at 31 22 132 285 023 938 25 626 4 700
December 2005
Balance at 30 19 814 253 097 742 1 749 4 400
June 2005
Available-for- - - - 68 -
sale
portfolio
fair value
adjustment
Profit for - 164 435 - - -
the period
Total income - 164 435 - 68 -
and expense
for the
period
Issue of 3 711 - - - -
shares
Change in - - - - -
shareholding
of
subsidiaries
Equity- - - 367 - -
settled share-
based
payments
Transfer to - (600) - - 600
regulatory
general
credit-risk
reserve
Preference - (7 985) - - -
share
dividends
Ordinary - (39 686) - - -
share
dividends
Balance at 30 23 525 369 260 1 109 1 817 5 000
June 2006
Available-for- - - - 421 -
sale
portfolio
fair value
adjustment
Profit for - 72 501 - - -
the period
Total income - 72 501 - 421 -
and expense
for the
period
Issue of 240 - - - -
shares
Equity- - - 134 - -
settled share-
based
payments
Transfer to - (1 100) - - 1 100
regulatory
general
credit-risk
reserve
Preference - (7 482) - - -
share
dividends
Ordinary - (26 323) - - -
share
dividends
Balance at 31 23 765 406 856 1 243 2 238 6 100
December 2006
Consolidated statement of changes in equity
Total Preference Minority Total
ordinary share interest share-
share- capital and holders`
holders` premium equity
equity
R`000 R`000 R`000 R`000
Balance at 30 279 802 99 646 16 997 396 445
June 2005
Available-for- 23 877 - 40 23 917
sale portfolio
fair value
adjustment
Profit for the 59 460 - 2 482 61 942
period
Total income 83 337 - 2 522 85 859
and expense
for the period
Issue of 2 318 - - 2 318
shares
Change in - - - -
shareholding
of
subsidiaries
Equity-settled 196 - - 196
share-based
payments
Transfer to - - - -
regulatory
general credit-
risk reserve
Preference (4 015) - - (4 015)
share
dividends
Ordinary share (23 219) - (600) (23 819)
dividends
Balance at 31 338 419 99 646 18 919 456 984
December 2005
Balance at 30 279 802 99 646 16 997 396 445
June 2005
Available-for- 68 - 30 98
sale portfolio
fair value
adjustment
Profit for the 164 435 - 10 244 174 679
period
Total income 164 503 - 10 274 174 777
and expense
for the period
Issue of 3 711 99 632 - 103 343
shares
Change in - - 41 968 41 968
shareholding
of
subsidiaries
Equity-settled 367 - - 367
share-based
payments
Transfer to - - - -
regulatory
general credit-
risk reserve
Preference (7 985) - - (7 985)
share
dividends
Ordinary share (39 686) - (600) (40 286)
dividends
Balance at 30 400 711 199 278 68 639 668 628
June 2006
Available-for- 421 - 247 668
sale portfolio
fair value
adjustment
Profit for the 72 501 - 7 113 79 614
period
Total income 72 922 - 7 360 80 282
and expense
for the period
Issue of 240 - - 240
shares
Equity-settled 134 - - 134
share-based
payments
Transfer to - - - -
regulatory
general credit-
risk reserve
Preference (7 482) - - (7 482)
share
dividends
Ordinary share (26 323) - (7 433) (33 756)
dividends
Balance at 31 440 202 199 278 68 566 708 046
December 2006
Consolidated cash flow information
31 Dec 31 Dec 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash flows from operating (153 048) 115 251 222 462
activities
Cash flows from investing (82 582) (40) (21 894)
activities
Net cash flows from financing 2 769 2 664 147 348
activities
Net increase in cash and cash (232 861) 117 875 347 916
equivalents
Cash and cash equivalents at 628 045 280 129 280 129
beginning of the year
Cash and cash equivalents at 395 184 398 004 628 045
end of the year
Headline earnings reconciliation
31 Dec 31 Dec 30 June
2006 2005 2006
Unaudited Unaudited Audited
R`000 R`000 R`000
Headline earnings are
determined as follows:
Profit attributable to equity 65 019 55 445 156 449
holders of the parent
Capital gains (59) (1 378) (50 399)
Headline earnings 64 960 54 067 106 050
Segmental analysis
31 Dec 31 Dec 30 June
2006 2005 2006
% Unaudited Unaudited Audited
change R`000 R`000 R`000
Business Banking (11) 24 916* 27 915 54 697
Capital 110 28 063 13 368 22 449
Personal Wealth (23) 8 044** 10 469 23 172
Specialised Services 70 3 937 2 315 5 732
Headline earnings 64 960 54 067 106 050
* After deduction of a first-time premium of R6 million for a large
exposure credit insurance policy.
** Impacted by a higher tax charge as compared with the previous period.
Financial highlights
31 Dec 31 Dec 30 June
2006 2005 2006
% Unaudited Unaudited Audited
change R`000 R`000 R`000
Share statistics
Headline earnings per 18 244 207 404
ordinary share (cents)
Basic earnings per 15 244 212 596
ordinary share (cents)
Diluted headline 19 237 200 391
earnings per ordinary
share (cents)
Basic diluted earnings 16 237 205 577
per ordinary share
(cents)
Number of ordinary 26 622 26 288 26 586
shares in issue at end
of the period (`000)
Weighted average 26 602 26 103 26 271
number of shares in
issue (`000)
Diluted weighted 27 402 27 002 27 104
average shares in
issue (`000)
Dividends per ordinary 18 73 62 161
share relating to
profit for the period
(cents)
73 62 62
Of which final 99
Dividends per 442,09 396,99 789,76
preference share
relating to profit for
the period (cents)
Of which dividend 396,99 396,99
number 3
Of which dividend 392,77
number 4
Of which dividend 442,09
number 5
Net asset value per 29 1 654 1 287 1 507
ordinary share (cents)
Financial performance
Return on ordinary (11) 33,4 37,4 31,2
shareholders` average
equity (%)
Return on total 5,9 5,9 4,8
average assets (%)
Operating performance
Non-interest income to 3 74,2 71,7 76,5
total income (%)
Efficiency ratio (%) 56,3 56,4 57,9
Capital adequacy
Group capital to risk 44,1 30,9 36,6
weighted assets (%)
Sasfin Bank Limited 34,7 19,3 28,3
capital to risk
weighted assets (%)
Commentary
NATURE OF BUSINESS
Sasfin is a bank-controlling company listed in the "Financials: Investment
Services" sector of the JSE Limited ("the JSE"). Sasfin`s subsidiaries
provide a wide range of complementary banking, financial and related
services.
BUSINESS REVIEW
Group performance
* Profit for the period increased by 29% to R79,6 million (2005: R61,9 million).
* Profit attributable to equity holders of the Group increased by 17% to R65
million (2005: R55,4 million) reflecting the impact of the issue, with
effect from 1 January 2006, of an effective 10% in Sasfin Bank Limited
("the Bank") and Sasfin Financial Services (Pty) Limited, with effect from
1 July 2006, to the Group`s Black Economic Empowerment partners.
* Headline earnings per ordinary share for the period under review increased by
18% to 244 cents (2005: 207 cents).
* The efficiency ratio remains constant at 56,3%.
* Group total assets increased by 24% to R2,4 billion (2005: R1,9 billion) which
is reflective of the increased level of activity in all divisions.
* Investment securities increased by 89%, which reflects primarily the Group`s
increased investment in private equity, augmented by the "mark to market"
gains on the private equity portfolio.
* Annualised return on ordinary shareholders` average equity of 33,4% (2005:
37,4%).
* The statutory risk-weighted capital adequacy of the Group is 44,1% (2005:
30,9%) and of the Bank, now a 90%-owned subsidiary of the Company, 34,7%
(2005: 19,3%).
* Business Banking performed well, with rental finance maintaining earnings in a
highly competitive market. All business units within Sasfin Capital
achieved strong growth. Personal Wealth operating income was maintained at
the same level as the previous year supported by buoyant conditions on the
JSE. Specialised Services, in particular international freight forwarding,
performed well.
STRATEGIC DEVELOPMENTS
* Progress has been made with the restructuring of the Group`s securitisation
vehicle, which is expected to be completed during 2007. The Group will
benefit from a reduced cost of funding as well as being able to securitise
various asset classes.
* The Bank`s application to become an authorised dealer in foreign exchange was
granted, subject to approval by the South African Reserve Bank of the
operating and reporting systems. An international treasury is being
established to execute foreign exchange and related transactions from which
Sasfin will benefit.
* Private Equity has to date been funding transactions out of the proceeds of
the Group`s preference share issues and now plans to raise a third-party
fund targeted at high net-worth individual and small institutional
investors.
* During the period, the Group commenced investing in property equity and
providing property mezzanine finance. It is envisaged that these activities
will make a significant contribution to Group profits.
* The Financial Services Board granted an asset management licence to Faranani
Asset Managers (Pty) Limited, a Group subsidiary. This entity has exciting
prospects.
* As announced on 13 November 2006, it was decided not to proceed with a
potential acquisition in Mauritius. The Group is exploring various
opportunities to expand its international reach.
* The Group is on schedule with plans for the implementation of Basel II.
PROSPECTS
* The Group strives to become recognised as "The Preferred Banking Group for the
Entrepreneur".
* The Group`s growing range of products and services are in strong demand in the
current buoyant economic environment.
BASIS OF PREPARATION AND PRESENTATION OF UNAUDITED INTERIM FINANCIAL STATEMENTS
The unaudited interim consolidated financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting and the accounting
policies applied conform to International Financial Reporting Standards.
The same accounting policies and methods of computation are followed in the
interim financial statements as compared to the 2006 annual financial
statements.
PREFERENCE SHARE DIVIDEND
Notice is hereby given that preference dividend number 5 amounting to 442,09
cents per preference share ("preference dividend") has been declared
payable to preference shareholders for the period 1 July 2006 to 31
December 2006. The preference dividend is payable to holders of preference
shares recorded in the register of the Company at the close of business on
Thursday, 5 April 2007.
The salient dates relating to the preference dividend are as follows:
Last day to trade cum the preference Thursday, 29 March 2007
dividend
Preference shares commence trading ex the Friday, 30 March 2007
preference dividend
Preference dividend record date Thursday, 5 April 2007
Payment of preference dividend Tuesday, 10 April 2007
Preference shares may not be dematerialised or rematerialised between Friday, 30
March 2007 and Thursday, 5 April 2007, 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 ordinary dividend as set out
below.
Notice is hereby given that an interim ordinary share dividend of 73 cents
(2005: 62 cents) per ordinary share ("interim ordinary dividend") has been
declared and is payable to ordinary shareholders recorded in the register
of the Company at the close of business on Friday, 20 April 2007.
The salient dates relating to the interim ordinary dividend are as follows:
Last day to trade cum the interim Friday, 13 April 2007
ordinary dividend
Shares commence trading ex the interim Monday, 16 April 2007
ordinary dividend
Record date Friday, 20 April 2007
Payment of interim ordinary dividend Monday, 23 April 2007
Ordinary shares may not be dematerialised or rematerialised between Monday, 16
April 2007 and Friday, 20 April 2007, both days inclusive.
For and on behalf of the Board
MB GLATT RDEB SASSOON
Chairman Chief Executive Officer
5 March 2007
This announcement and additional information is available on our
website:www.sasfin.com
Chairman: MB Glatt (Non-executive)
Executive directors: RDEB Sassoon* (Chief Executive
Officer), AW Greenstein (Managing
Director), M Segal * British
Non-executive directors: CN Axten, ETB Blight, ML Smith
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 no: 1987/002097/06
Lead sponsor: KPMG Services (Pty) Limited
Joint sponsor: Sasfin Capital (a division of Sasfin
Bank Limited)
Date: 05/03/2007 09:00:01 Produced by the JSE SENS Department.
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