Sabvest Capital’s H1 2023: Mixed Bag of Gains & Losses

Sabvest Capital Limited (Sabcap), a prominent South African investment holding company listed on the JSE Limited, has issued a trading statement revealing its expected financial results for the six months ended 30 June 2023. The statement comes in compliance with the JSE Listings Requirements, which mandate companies to disclose potential deviations of at least 20% in financial performance from the previous corresponding period.

According to the trading statement, Sabcap projects a positive trajectory for its net asset value per share (NAVPS) while simultaneously expecting a substantial decline in headline earnings per share (HEPS) and earnings per share (EPS). The company also proposes a dividends per share (DPS) payout for the period under review.

Anticipated Financial Performance

MetricExpected % ChangeExpected H1 2023 (cents)H1 2022 (cents)
Net Asset Value per Share (NAVPS)+6.4 to +10.5%11,050 to 11,48010,388
Headline Earnings per Share (HEPS)-71.5 to -79.0%210 to 2851,001.3
Earnings per Share (EPS)-71.5 to -79.0%210 to 2851,001.1
Dividends per Share (DPS)Proposed: -30%3030

Promising Net Asset Value per Share (NAVPS) Growth

Sabcap’s projected net asset value per share (NAVPS) demonstrates a positive outlook. The company expects the NAVPS for the first half of 2023 to be in the range of 11,050 to 11,480 cents. Compared to the NAVPS of 10,388 cents reported in the corresponding period in 2022, this represents an estimated growth of 6.4% to 10.5%.

This upward trend in NAVPS signals potential positive developments in the company’s investment portfolio during H1 2023. Shareholders and investors may view this as an encouraging sign of Sabcap’s ability to generate returns on its investments.

Significant Decline in Headline Earnings and Earnings per Share

Despite the positive NAVPS growth, Sabcap’s trading statement reveals a significant projected decrease in both headline earnings per share (HEPS) and earnings per share (EPS). The company anticipates a decline of 71.5% to 79.0% for both metrics during the first half of 2023.

The expected HEPS and EPS for H1 2023 are estimated to be in the range of 210 to 285 cents. In comparison, the company reported HEPS and EPS of 1,001.3 and 1,001.1 cents, respectively, for the same period in 2022. Such a sharp decline may raise concerns among shareholders and investors regarding the company’s profitability and operational performance during the specified period.

Proposed Dividends per Share

Sabcap has proposed a dividends per share (DPS) payout of 30 cents for the six months ended 30 June 2023. The proposed DPS remains unchanged from the corresponding period in 2022. Despite the challenges in headline earnings, the company aims to maintain its commitment to shareholders through consistent dividend distributions.

Cautionary Note and Audited Financial Results Release

The estimated financial information presented in the trading statement is yet to be reviewed or reported on by Sabcap’s external auditors. Investors and stakeholders are urged to exercise caution when trading Sabcap’s securities until the release of the audited financial results.

The unaudited financial results for the six months ended 30 June 2023 are expected to be released on the Stock Exchange News Service (SENS) platform by mid to late August 2023. The audited financial results will provide a comprehensive and verified view of Sabcap’s financial performance during the specified period.

Conclusion

Sabvest Capital Limited’s trading statement paints a mixed picture of the company’s anticipated financial performance for the first half of 2023. While the positive growth in net asset value per share (NAVPS) is promising, the substantial decline in headline earnings per share (HEPS) and earnings per share (EPS) raises questions about the company’s operational efficiency. Shareholders and investors will await the release of the audited financial results to gain a more comprehensive understanding of Sabcap’s performance during the specified period.