The group reported a net profit of R121.1 million (June 2006 - restated - R40.6 million) from a buoyant property market, for the year ended 30 June 2007.

Earnings per share increased by 203.8% from 540.4 cents (restated) to 1 642.0 cents.
Headline earnings per share increased by 4.3% from 281.7 cents to 293.6 cents and the
net asset value per share increased by 67.0% from 2 400 cents (restated) to 4 007 cents.

Income statement overview
Rental revenue increased substantially by 103.5% to R34.4 million (June 2006 - R16.9 million) and is reflective of theinvestment of R140.0 million in investment property during the past year. R17.8 million, being the balance of revenue, pertains to the sale of sectional title industrial warehousing.

Profit from operations of R25.4 million (June 2006 - R15.8 million) was derived from property sales and rentals net of costs amounting to R26.4 million (June 2006 - R10.7 million), treasury investment and other income of R4.4 million (June 2006 - R9.2 million) and net administrative costs of R5.4 million (June 2006 - R4.1 million).

Interest paid on long-term borrowings increased from R6.5 million to R16.8 million as a result of significant property acquisitions made during the year.

Investment impairments and goodwill written off of R17.6 million have been presented in the consolidated income statement. An amount of R16.3 million, relating primarily to the provision of a deferred tax liability in respect of the acquisition of 50% of a diversified property investment portfolio, Rotaflex Investments (Pty) Ltd, has been impaired. The remaining balance of R1.3 million related to an impairment on the disposal of The PSG Global Hedge Portfolio treasury investment.

Unrealised revaluation surpluses from property investments of R129.4 million were accounted for in the group's consolidated income statement. The subsidiary and associate investment property portfolio was valued by Currie Valuations (Pty) Ltd, a reputable independent property valuer. Yields used in the valuation of commercial property ranged from 7.0% to 11.0% and were determined using such qualitative factors as property location, strength of tenant, length of lease and type of property
asset.

Taxation of R38.9 million (June 2006 - R8.2 million) of which R37.7 million has been provided for deferred capital gains taxation at the company tax rate of 29.0% in respect of investment property revaluation surpluses.

Profits attributable to associate companies were R34.9 million (June 2006 - restated - R10.5 million). The profits comprised R11.2 million (June 2006 - R7.5 million) from property trading activities, R23.7 million (June 2006 - restated - R1.2 million) from investment property revaluation surpluses and R nil (June 2006 - R1.8 million) in respect of an investment impairment reversal. Revaluation surpluses for residential investment property were determined using a market rate per square metre based on comparable sales and ranged from R7 500/sqm to R11 000/sqm net of selling costs and value added taxation.

Prospects
Sable Homes is developing large land holdings in Hazeldean, Pretoria East, comprising retail and homeworld centres, office parks, upmarket residential sectional title and retirement home estates. Hazeldean Square, a 16 500sqm retail centre will be completed during September 2007 and will be complemented by a lifestyle homeworld centre opening in 2008. The node is fast developing into a well-established suburb with a diversified spread of property developments being catered for.

Sable has continued to invest in industrial land so as to take advantage of the buoyant demand from both small and large industrial users. Material refurbishments and expansionary investments to two of Sable's retail shopping centres are currently underway and expected to be completed by mid 2008.

Sable's management team is cautious of recent interest rate increases and as such is prepared to shift its acquisition and development focus to a more niche orientated property product range such as storage units, affordable residential apartments, bulk land sales and sectional title office suites.

Appreciation
2007 has seen Sable's gross assets escalate from R311.2 million to R639.4 million and reserves increase from R180.1 million to R295.6 million. The board of directors, management and staff are to be congratulated for this exceptional growth and I look forward to the continued achievement of the group’s strategic goals in the forthcoming year.


PH Nash
Chairman
27 September 2007