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TMT - Trematon Capital Investments Limited - Audited annual financial results
31 August 2011
TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/008691/06)
JSE share code: TMT
ISIN: ZAE000013991
("Trematon" or the "Company")
AUDITED ANNUAL FINANCIAL RESULTS 31 AUGUST 2011
STATEMENT OF FINANCIAL POSITION
Audited Audited
31 August 31 August
2011 2010
R`000 R`000
ASSETS
Non-current assets 154 109 178 871
Property, plant and equipment 9 523 8 117
Investment property 4 449 1 786
Investments 14 612 13 316
Investments in joint ventures 13 417 -
Investments in associate entities 111 470 154 832
Deferred tax asset 638 820
Current assets 93 710 101 280
Loans receivable 10 586 10 695
Investments 10 593 -
Inventory 28 144 29 946
Tax receivable 11 142
Trade and other receivables 3 546 4 841
Cash and cash equivalents 40 830 55 656
Total Assets 247 819 280 151
EQUITY AND LIABILITIES
Equity 199 170 233 506
Share capital and share premium 203 296 203 296
Treasury shares (1 277) -
Fair value reserve 5 299 3 197
Accumulated loss (18 857) (71 725)
Total equity attributable to equity holders of the
parent 188 461 134 768
Non-controlling interest 10 709 98 738
Non-current liabilities
Deferred tax liability 4 771 4 429
Current liabilities 43 878 42 216
Creditors 7 084 7 266
Loans payable 16 175 24 825
Tax payable 9 2 784
Trade and other payables 20 610 1 490
Provisions - 5 851
Total equity and liabilities 247 819 280 151
Net asset value per share (cents) 108 cents 77 cents
(based on shares in issue at end of year)
STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
31 August 31 August
2011 2010
Notes R`000 R`000
Revenue 19 922 18 303
Trading profit/(loss) 252 (24 558)
Investment income 13 721 14 417
Finance costs (3 122) (6 779)
Impairment of loan (4 250) (3 848)
Reversal of provision 5 851 -
Impairment of investment in associate - (469)
Profit from equity accounted investments
(net of tax) 3 186 21 915
Profit before taxation 15 638 678
Taxation (365) (3 461)
Profit/(loss) for the year 15 273 (2 783)
Other comprehensive income
Fair value gain on available-for-sale investments 2 102 268
Other comprehensive income for the year 2 102 268
Total comprehensive income for the year 17 375 (2 515)
Profit/(loss) attributable to:
Equity holders of the parent 14 756 (7 132)
Non-controlling interests 517 4 349
15 273 (2 783)
Total comprehensive income attributable to:
Equity holders of the parent 16 858 (6 864)
Non-controlling interests 517 4 349
17 375 (2 515)
Number of shares issued (thousands) 173 821 174 873
Weighted average number of shares
(thousands) 173 940 174 873
Earnings/(Loss) per share (cents) 8.5 (4.1)
Diluted earnings/(loss) per share (cents) 8.5 (4.1)
Headline earnings per share (cents) 2 3.1 4.3
Diluted headline earnings per share (cents) 2 3.1 4.3
STATEMENT OF CHANGES IN EQUITY
Share Share Total share
capital premium capital
R`000 R`000 R`000
Balance at 1 September 2009 1 749 201 547 203 296
Total comprehensive income for the year - - -
Loss for the year - - -
Fair value gain on available-for-sale
investments - - -
Change in shareholding in subsidiary - - -
Balance at 31 August 2010 1 749 201 547 203 296
Balance at 1 September 2010 1 749 201 547 203 296
Total comprehensive income for the year - - -
Profit for the year - - -
Fair value gain on available-for-sale
investments - - -
Net share repurchases - - -
Dividends paid - - -
Change in shareholding in subsidiary - - -
Balance at 31 August 2011 1 749 201 547 203 296
Treasury Fair value Accumulated
shares reserve loss
R`000 R`000 R`000
Balance at 1 September 2009 - 2 929 (64 976)
Total comprehensive income for the year - 268 (7 132)
Loss for the year - - (7 132)
Fair value gain on available-for-sale
investments - 268 -
Change in shareholding in subsidiary - - 383
Balance at 31 August 2010 - 3 197 (71 725)
Balance at 1 September 2010 - 3 197 (71 725)
Total comprehensive income for year - 2 102 14 756
Profit for the year - - 14 756
Fair value gain on available-for-sale
investments - 2 102 -
Net share repurchases (1 277) - -
Dividends paid - - (2 583)
Change in shareholding in subsidiary - - 40 695
Balance at 31 August 2011 (1 277) 5 299 (18 857)
Total Non-controlling Total
Interest equity
R`000 R`000 R`000
Balance at 1 September 2009 141 249 95 476 236 725
Total comprehensive income for
the year (6 864) 4 349 (2 515)
Loss for the year (7 132) 4 349 (2 783)
Fair value gain on available-for-sale
investments 268 - 268
Change in shareholding in subsidiary 383 (1 087) (704)
Balance at 31 August 2010 134 768 98 738 233 506
Balance at 1 September 2010 134 768 98 738 233 506
Total comprehensive income for year 16 858 517 17 375
Profit for the year 14 756 517 15 273
Fair value gain on available-for-sale
investments 2 102 - 2 102
Net share repurchases (1 277) - (1 277)
Dividends paid (2 583) - (2 583)
Change in shareholding in subsidiary 40 695 (88 546) (47 851)
Balance at 31 August 2011 188 461 10 709 199 170
CASH FLOW STATEMENT
Audited Audited
Year ended Year ended
31 August 31 August
2011 2010
R`000 R`000
Cash flows from operating activities
Cash utilised in operations (4 077) (4 694)
Finance income 10 215 14 026
Dividends received 3 505 390
Dividends received from associate 7 140 4 446
Finance costs (3 122) (6 779)
Dividends paid (2 583) -
Taxation paid (2 827) (126)
Net cash inflow from operating activities 8 251 7 263
Cash flows from investing activities
Acquisition of property, plant and equipment (1 856) (809)
Acquisition of and addition to investment property (2 664) (340)
Preceeds on disposal of property, plant and equipment 52 77
Decrease in loans receivable 11 240 15 570
Proceeds on sale of associate 33 993 -
Loan advanced to jointly controlled entities (12 469) -
Acquisition of held-for-trading and
available-for-sale investments (26 258) -
Proceeds on disposal of investments 12 479 68 500
Net cash inflow from investing activities 14 517 82 998
Cash flows from financing activities
Change in shareholding of subsidiary (28 761) -
Decrease in borrowings (8 650) (79 544)
Decrease in creditors (182) (46)
Net cash outflow from financing activities (37 593) (79 590)
Net (decrease)/increase in cash and cash equivalents (14 825) 10 671
Cash and cash equivalents at the beginning of the year 55 655 44 984
Total cash and cash equivalents at the end of the year 40 830 55 655
1. Presentation of annual financial statements
Trematon Capital Investments Limited (the `company`) is a company domiciled in
South Africa. The consolidated financial statements of the company as at and
for the year ended 31 August 2011 comprise the company and its subsidiaries
(together referred to as the "group") and the group`s interest associates and
jointly controlled entities.
The financial statements were authorised for issue by the directors on 7
November 2011.
The annual financial statements have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of IFRS
and the AC 500 standards as issued by the Accounting Practices Board and
contain the information required by IAS 34: Interim Finance Reporting. The
same IFRS compliant accounting policies and methods of computation have been
followed in the preparation of these annual financial results as compared with
the most recent annual financial statements.
The consolidated annual financial statements and the company annual financial
statements are stated in Rands, which is the company`s functional and
presentation currency.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or the period of
the revision and future periods if the revision affects both current and
future periods.
Mazars has provided an unqualified audit opinion, which is available for
inspection at the company`s registered office.
Audited Audited
Year ended Year ended
31 August 31 August
2011 2010
2. Treasury shares
Number of shares held at year end 1 050 129 -
Between 12 November 2010 and 20 January 2011, 2 651
129 treasury shares were
purchased for prices ranging between 89 and 127
cents.
On 13 and 30 March 2011, 800 000 treasury shares
were disposed of at a selling price
of 150 and 149 cents respectively.
Audited Audited
Year ended Year ended
31 August 31 August
2011 2010
R`000 R`000
3. Headline earnings per share
Headline earnings per share is calculated as follows:
Profit/(Loss) attributable to equity holders of the
parent 14 756 (7 132)
Realised (profit)/loss on sale of associate (9 764) 11 426
Impairment of investment - 469
Tax effect on realised (profit)/loss on sale of
associate, net of non-controlling interest 420 2 778
Headline earnings 5 412 7 541
Headline earnings per share (cents) 3.1 4.3
Diluted headline earnings per share (cents) 3.1 4.3
The calculation of headline earnings per share is
based on the weighted average number of 173 940 185
shares in issue during the year (2010: 174 872 545).
4. Segmental information R`000
Gaming Property Investments Unallocated
2011
Revenue 390 6 201 3 115
Intersegment revenue - 6 660 -
Net income before tax 7 805 4 718 3 115
Total assets 99 636 140 555 7 628
2010
Revenue 390 3 887 -
Intersegment revenue - 3 427 -
Net income before tax 8 544 (7 865) -
Total assets 93 952 186 199 -
Eliminations Total
2011
Revenue - 9 706
Intersegment revenue (6 660) -
Net income before tax - 15 638
Total assets - 247 819
2010
Revenue - 4 277
Intersegment revenue (3 427) -
Net income before tax - 679
Total assets - 280 151
Chairman and Chief Executive`s Joint Report
Commentary on financial results
Income
The group made a profit for the year of R14.8m (2010 - loss of R7.1 million)
which translates into earnings per share of 8.5 cents (2010 - loss of 4.1
cents). A major reason for the increased profits in the current year is that a
profit of R9.8 million was realised on the sale of the interest in the
Faircare Trust(discussed below) whereas in the previous financial year a net
loss of R11.4 million was realized on the sale of Ingenuity.
The group made a small net trading profit for the year after accounting for
all group operating expenses.
Investment income remained at roughly the same level although the dividend
component increased relative to interest earned.
Investment highlights
The main changes in investments since the previous year-end were:
- an increase in the investment in Club Mykonos Langebaan Limited ("CML") from
34.2% for 92.2%
- the sale of the 50% interest in the Faircare Trust retirement village
business;
- a new investment in Arbitrage Property Fund (50% shareholding) which is a
property loan stock structure with a focus on commercial and industrial real
estate.
Net asset value
The group`s net asset value increased to 108 cents per share(2010 - 77 cents
per share). The major components of the increase were the profits referred to
above and the net gain for equity holders of the parent arising from the
increased shareholding in CML (R40.7 million) which is accounted for in the
statement of changes in equity.
Commentary on individual investments
Disposals
The group`s interest in The Faircare Trust retirement village business was
sold during the period. Our partner in the operation had a strong desire for
full control and management felt that the cash received could be equally well
deployed in other areas. The group realised a total profit of R9.8m on the
sale which was brought to income in the current period.
Club Mykonos Langebaan Limited
At year-end the company owned 92.2% of CML (2010 - 34.2%) which owns most of
the undeveloped land at the Club Mykonos Resort in Langebaan and certain
rental properties including a marina. CML in turn owns 29.6% (2010 - 29.6%) of
the Mykonos Casino which is managed by the Tsogo Sun Group (previously Gold
Reef Resorts). The increased shareholding reflects the results of the scheme
of arrangement entered into last year, part of which is reflected as an
increase in trade payables, as well as ongoing purchases in the open market.
The resort is managed by its homeowners` association on which CML is well
represented. The resort has shown constant improvement in terms of service
delivery, aesthetics and infrastructure over the past three years and this has
been reflected in an improvement in the resort`s RCI grading to Gold Crown
status during 2011.
The market for leisure and residential accommodation in the Western Cape is
still subdued and no new residential developments are envisaged in the first
half of the new financial year. Sales at phase 3 of Aegean Heights continue at
a slow pace as there is still demand in the premium beachfront segment. The
overall levy burden at the resort is still too high because of historic
factors and a concerted effort will be made to contain costs in the next
budget in preparation for future developments.
Two new commercial developments at the resort are well underway. 56 new
jetties are being installed at the marina and construction has commenced on a
360 unit boat storage facility. Early indications are that there is good
demand for these facilities. The jetties should be complete by the end of the
calendar year and the first boat garages will be available for rental shortly.
The casino continues to trade well in a challenging environment. The profit
contribution for the current year was slightly down on last year. A new slots
prive area was added during 2011 and, subsequent to the year-end, 20 new
machines were installed and the tables area was redesigned to improve
efficiencies. There has been a large amount of speculation in the press about
the potential relocation of a remote casino into the Cape Town metropole. It
is premature to speculate on the possible outcome of this process until more
specific information is available.
Further information on Club Mykonos can be found at www.clubmykonos.co.za
Cloudberry Investments 18 (Pty) Limited
Cloudberry is a black controlled investment vehicle which owns shares in Mazor
Group Ltd (www.mazor.co.za) and Grand Parade Investments Limited
(www.grandparade.co.za).
In the current year an impairment of R4.2m was raised against the group`s
investment in Cloudberry which is related to the Mazor shareholding which
declined in value over the period.
The reversal of provision in the current year of R5.9 million relates to
Cloudberry`s investment in Grand Parade Investments Ltd which had a positive
mark-to-market and increased the net asset value of Cloudberry.
The prospects of Mazor are directly linked to the construction cycle. The
business is financially sound but will only show recovery when the cycle
improves.
Other investments
Other listed investments included Dorbyl Ltd and convertible debentures in
Sallies Limited.
The group maintains long-term investments in certain listed and unlisted
shares and also trades actively to take advantage of short-term opportunities.
Direct property investments
All of the group`s direct property investments are undertaken with partners
who have a high level of expertise in the relevant sector. This has been a
successful model in the past and the group will continue to grow its property
investments in this manner.
Boulevard Park Trust
Boulevard Park Trust, of which Trematon has an associate interest of 37.5%
owns 49% of the Boulevard Office Park situated on the periphery of the Cape
Town CBD. Boulevard Park was developed by Faircape and comprises 38 000 m2 of
prime office space and 1980 parking bays, the bulk of which is let to blue-
chip tenants on long leases.
There was no change in the percentage investment in Boulevard Park. A large
proportion of the loans due from this development have been repaid and R15.9m
remained owing at year end (2010 - R33.0 million).
Stalagmite Property Investments (Pty) Limited
The remaining land in the Broadway Office Park in the Strand is valued at
cost. At list prices the land has a value of R25m of which Trematon has a 50%
joint venture share. The project is debt free. The land is located adjacent to
the route of the proposed N2 highway and we await certainty on the road`s
future following well published court cases around the nature and timing of
the N2 Winelands Project.
Arbitrage Property Fund (Pty) Limited
Arbitrage is a joint venture with Ilan Kaplan and Brian Goldberg who were
formerly with the Redefine Group. The Fund is a property loan stock structure
with a focus on commercial and industrial real estate investments where
management believes there exists a high potential for both income and capital
growth. To date, agreements totalling R174 million have been concluded and
deal flow has been more than satisfactory.
Prospects
The group has made use of its cash and facilities to make some substantial new
investments during the period including direct property investments
(commercial, industrial and residential), development projects (new marina
jetties and boat storage facilities) and general investment and trading in
listed shares. All of these are expected to add to the group`s income and net
asset value over time.
Changes to the board
On 20 July 2011 the board appointed Jonathan Fisher as an independent non-
executive director. Jonathan has also been appointed to the audit committee.
Subsequent events
Subsequent to year-end, Trematon entered into a joint venture with RBK
Properties. The focus of this venture is on distressed or high value
residential developments which are in good nodes but are experiencing short
term distress due to the current difficult residential property climate.
Dividend
The board is pleased to propose a dividend of 2 cents per share subject to
approval by shareholders at the Annual General Meeting to be held on
Wednesday, 25 January 2012. A finalisation announcement confirming the
dividend will be made after the Annual General Meeting has been held.
Last date to trade: Friday, 3 February 2012
Ex-date: Monday, 6 February 2012
Record date: Friday, 10 February 2012
Payment date: Monday, 13 February 2012
Share certificates may not be dematerialised or rematerialised between Monday,
6 February 2012 and Friday, 10 February 2012, both days inclusive.
Posting of the annual report and notice of annual general meeting:
Shareholders are advised that the annual financial statements will be posted
on or about 30 November 2011. The annual general meeting will be held on
Wednesday, 25 January 2012 at The Hudson, 30 Hudson Street, Cape Town at 10am.
The date on which the shareholders must be recorded in the Trematon share
register for purposes of being entitled to attend and vote at the Annual
General Meeting is Friday, 13 January 2012, with the last day to trade being
Friday, 6 January 2012.
Domicile and registered office
30 Hudson Street, Cape Town
P O Box 7677, Roggebaai, 8012, South Africa
Transfer secretaries
Link Market Services South Africa (Pty) Limited
19 Ameshoff Street, Braamfontein
Directors
M Kaplan (Chairman)*, AJ Shapiro (Chief Executive Officer),
AL Winkler (Financial Director), JP Fisher*
A Groll, AM Louw*, R Stumpf*
* Non-executive
Secretary
S Litten
Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Preparer
AL Winkler (Financial Director) CA (SA)
Date published
15 November 2011
Auditor
Mazars
Contact details
Tel: (021) 421 5550
Fax: (021) 421 5551
Date: 15/11/2011 15:47:01 Produced by the JSE SENS Department.
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