| Thu 10 May 2012, 10:52 | | TMT - Trematon Capital Investments Limited - Unaudited Interim Results for the |
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TMT - Trematon Capital Investments Limited - Unaudited Interim Results for the
six months ended 29 February 2012
TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/008691/06)
Share code: TMT ISIN: ZAE000013991
("Trematon" or "the company")
Unaudited Interim Results for the six months ended 29 February 2012
DIRECTORS` REVIEW
Commentary on financial results
Net asset value at the end of the period was 109 cents which is a nominal
improvement since year-end.
Earnings per share increased by 10.3% when compared to the previous interim
period and headline earnings showed a marginal improvement.
The group remains in a healthy financial position with negligible gearing at the
centre and further capacity to enter into investment transactions.
The financial position will be further enhanced when the proceeds from the sale
of Trematon`s interest in Boulevard Park Trust ("BPT") are realised in the
current financial period. This disposal was announced on SENS on 26 March 2012.
The emphasis of the investment portfolio has shifted away from mature
investments to new investment opportunities. This is reflected in an increase in
investments in joint ventures. These investments have a negligible impact on NAV
in the short term but are expected to contribute materially in the future.
Investments in associates has declined because BPT was reallocated to "non-
current assets held for sale".
Group revenue includes interest income, dividends and the sale of properties at
Club Mykonos. Dividend receipts increased materially whereas land sales are down
on the prior period.
Trading losses were incurred during the period. All head office and operating
expenses are accounted for in this line item. The biggest component of trading
losses was the mark-to-market of shares held in Grand Parade Investments Limited
("GPI"). GPI paid a special dividend of 60 cents per share during the period,
this resulted in a price decline although there were no actual losses realised
because the price decline was offset by dividends received.
Profit from equity accounted investments reflect equity accounted profits from
Mykonos Casino and Arbitrage Property Fund (Proprietary) Limited ("Arbitrage")
and small losses from other start up operations.
Cash utilised in new ventures during the period amounted to R40 million. These
include additional jetties and a boat storage facility at Club Mykonos as well
as new property ventures as set out below and trading opportunities.
Commentary on individual investments
Club Mykonos Langebaan Limited ("CML")
CML has continued to improve steadily. Improved efficiencies have resulted in a
small operating profit from resort operations for the period. The CML group made
a profit of R4.5 million for the period, the biggest component of which is
generated by equity account profits from the Mykonos Casino.
The 56 new jetties have been installed and are fully let. Phase 1 of the boat
storage facility is nearly complete and is on budget. The boatyard is not
expected to contribute to profits in this financial year but is expected to
yield good returns once phase 2 becomes operational in 2013/2014.
Sales of property were very subdued during the period and there has been no
discernible recovery in the property market on the West Coast.
Mykonos Casino`s contribution to equity accounted profits declined slightly when
compared to the previous interim period.
Trematon and CML have jointly announced a scheme of arrangement which is
intended to enable the purchase of the interests of the remaining minorities in
CML. The details of the scheme were announced on SENS on 20 March 2012. The
results of the scheme meeting were announced on SENS on 9 May 2012.
Other investments
Other group investments currently include direct and indirect stakes in Mazor
Group Limited and Grand Parade Investments Limited. The group trades actively in
a variety of listed and unlisted investments.
Direct Property Investments
Boulevard Park Trust ("BPT")
The 37.5% beneficial interest in BPT has been sold for an aggregate
consideration of R39.3 million of which R16.6 million will be allocated to the
repayment of Trematon`s loan accounts and R22.7 million will be accounted for as
a capital gain in the current financial year. Details of the proposal were
announced on SENS on 26 March 2012.
Arbitrage Property Fund (Pty) Limited
The agreements totalling R174 million which were referred to at year-end have
all been implemented and the fund has several potential transactions under
review. The fund, which is focused on commercial and industrial real estate,
generated a small profit for the period.
The focus of the fund is on selective opportunities where we believe we have an
opportunity to add value in a relatively short time-frame.
Trematon provides proportionate and mezzanine finance to the fund at market
related rates.
The Resi Investment Trust ("Resi")
Resi is a joint venture with RBK Properties (Proprietary) Limited. The business
is focused in the Western Cape and aims to purchase well located and well priced
large scale residential schemes which are complete or partially complete. To
date Resi has invested just over R50 million. The business made a small loss in
its start up phase and is operating well within the parameters imposed by the
group.
Trematon provides proportionate and mezzanine finance to the fund at market
related rates.
Stalagmite Property Investments (Proprietary) Limited
There has been no change in the status of this investment. Trematon owns a 50%
share in the company which is ungeared and owns land adjacent to the route of
the proposed N2 Winelands Project.
Prospects
The group`s investment focus has shifted somewhat into new ventures from more
mature investments.
The realisations detailed above have also increased the resources available for
new investment. The group is actively seeking new investment opportunities
although the flow of truly attractive deals is sporadic and depends on market
conditions. There is not a great deal of annuity income in the group so profits
will continue to depend on the timing of investment realisations.
STATEMENT OF FINANCIAL POSITION
Unaudited Audited
29/28 February 31 August
2012 2011 2011
Notes R`000 R`000 R`000
ASSETS
Non-current assets 150 358 171 431 154 110
Property, plant and equipment 12 194 7 939 9 523
Investment properties 11 266 1 786 4 449
Investments 12 324 15 080 14 612
Investments in joint ventures 31 486 1 042 13 417
Investments in associate entities 81 373 144 494 111 470
Deferred tax asset 1 715 1 090 639
Current assets 58 789 98 534 93 710
Loans receivable 10 291 18 725 10 586
Trade and other receivables 5 208 4 120 3 546
Investments 11 054 6 470 10 593
Inventory 28 824 29 150 28 144
Tax receivable 11 12 11
Cash and cash equivalents 3 401 40 057 40 830
Non-current assets held for sale 2 29 443 - -
Total assets 238 590 269 965 247 820
EQUITY AND LIABILITIES
Equity 199 828 195 542 199 171
Share capital and share premium 203 296 203 296 203 296
Treasury shares (1 276) (3 220) (1 276)
Fair value reserve 3 331 5 702 5 299
Share-based payments reserve 3 121 - -
Accumulated loss (16 695) (28 999) (18 857)
Total equity attributable to
equity holders of the parent 188 777 176 779 188 462
Non-controlling interest 11 051 18 763 10 709
Non-current liabilities 4 450 4 837 4 771
Deferred tax liability 4 450 4 837 4 771
Current liabilities 34 312 69 586 43 878
Loans payable 5 400 26 055 16 175
Creditors 6 898 7 139 7 084
Tax payable 9 9 9
Trade and other payables 20 679 21 483 20 610
Bank overdraft 1 326 14 900 -
Total equity and liabilities 238 590 269 965 247 820
Net asset value per share (cents) 109 103 108
STATEMENT OF CASH FLOW
Unaudited Audited
Six months ended Year ended
29/28 February 31 August
2012 2011 2011
R`000 R`000 R`000
Cash flows from operating activities
Cash utilised in operations (5 142) (23 050) (4 077)
Finance income 2 537 5 686 10 215
Dividends received 6 016 3 505 3 505
Dividends received from associate 4 446 2 694 7 140
Finance costs (732) (1 490) (3 122)
Dividend paid (3 476) (2 583) (2 583)
Tax paid - (2 744) (2 827)
Net cash from operating activities 3 649 (17 982) 8 251
Cash flows from investing activities
Acquisition of property, plant and equipment (2 975) (9) (1 856)
Acquisition of investment property (6 817) - (2 664)
Proceeds on disposal of property, plant and
equipment - - 52
Decrease/(increase) in loans receivable 1 568 (13 020) 11 240
Loans repaid by associates - 16 894 -
Proceeds on sale of associate - - 33 993
Loan advanced to jointly controlled entities(18 904) - (12 469)
Acquisition of held-for-trading and
available-for-sale investments (15 560) (17 273) (26 258)
Proceeds from disposal of investments 11 245 8 396 12 479
Net cash from investing activities (31 443) (5 012) 14 517
Cash flows from financing activities
Change in shareholding of subsidiary - - (28 762)
Decrease in creditors (186) (127) (182)
(Decrease)/increase in borrowings (10 775) 1 230 (8 650)
Shares repurchased - (3 220) -
Net cash from financing activities (10 961) (2 117) (37 594)
Net decrease in cash and cash equivalents (38 755) (25 111) (14 826)
Cash and cash equivalents at the beginning
of the period/year 40 830 55 656 55 656
Total cash and cash equivalents at the end
of the period/year 2 075 30 545 40 830
STATEMENT OF CHANGES IN EQUITY
Total
Share Share share Treasury
capital premium capital shares
R`000 R`000 R`000 R`000
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 purchases - - - (1 276)
Dividends paid - - - -
Change in shareholding in subsidiary - - - -
Balance at 31 August 2011 1 749 201 547 203 296 (1 276)
Balance at 1 September 2011 1 749 201 547 203 296 (1 276)
Total comprehensive income
for the year - - - -
Profit for the period - - - -
Fair value gain on
available-for-sale investments - - - -
Share-based payment - - - -
Dividends paid - - - -
Balance at 29 February 2012 1 749 201 547 203 296 (1 276)
Share-
based Accumu-
Fair value payment lated
reserve reserve loss Total
R`000 R`000 R`000 R`000
Balance at 1 September 2010 3 197 - (71 725) 134 768
Total comprehensive income
for the year 2 102 - 14 756 16 858
Profit for the year - - 14 756 14 756
Fair value gain on
available-for-sale investments 2 102 - - 2 102
Net share purchases - - - (1 276)
Dividends paid - - (2 583) (2 583)
Change in shareholding in subsidiary - - 40 695 40 695
Balance at 31 August 2011 5 299 - (18 857) 188 462
Balance at 1 September 2011 5 299 - (18 857) 188 462
Total comprehensive income
for the year (1 968) - 5 638 3 670
Profit for the period - - 5 638 5 638
Fair value gain on
available-for-sale investments (1 968) - - (1 968)
Share-based payment - 121 - 121
Dividends paid - - (3 476) (3 476)
Balance at 29 February 2012 3 331 121 (16 695) 188 777
Minority Total
interest equity
R`000 R`000
Balance at 1 September 2010 98 738 233 506
Total comprehensive income for the year 517 17 375
Profit for the year 517 15 273
Fair value gain on available-for-sale investments - 2 102
Net share purchases - (1 276)
Dividends paid - (2 583)
Change in shareholding in subsidiary (88 546) (47 851)
Balance at 31 August 2011 10 709 199 171
Balance at 1 September 2011 10 709 199 171
Total comprehensive income for the year 342 4 012
Profit for the period 342 5 980
Fair value gain on available-for-sale investments - (1 968)
Share-based payment - 121
Dividends paid - (3 476)
Balance at 29 February 2012 11 051 199 828
STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited
Six months ended Year ended
29/28 February 31 August
2012 2011 2011
Notes R`000 R`000 R`000
Revenue 12 358 14 812 19 922
Trading (loss)/profit (6 692) (6 466) 252
Investment income 8 553 9 191 13 721
Finance costs (732) (1 490) (3 122)
Reversal of provision - - 5 850
Reversal of impairment/(impairment of loan) 1 274 861 (4 250)
Profit from equity accounted
investment (net of tax) 2 622 3 269 3 187
Share-based payment expense 3 (121) - -
Profit before taxation 4 904 5 365 15 638
Taxation 1 076 170 (364)
Profit for the period/year 5 980 5 535 15 274
Other comprehensive income
Fair value (loss)/gain on
available-for-sale investments (1 968) 2 505 2 102
Profit attributable to:
Equity holders of the parent 5 638 4 997 14 756
Non-controlling interest 342 538 518
Profit for the period/year 5 980 5 535 15 274
Total comprehensive income attributable to:
Equity holders of the parent 3 670 7 502 16 858
Non-controlling interest 342 538 518
4 012 8 040 17 376
Earnings per share
Number of shares issued (thousands) 173 821 172 221 173 821
Weighted average number of shares (thousands) 173 821 174 326 173 940
Earnings per share (cents) 3.2 2.9 8.5
Diluted earnings per share (cents) 3.2 2.9 8.5
Headline earnings per share (cents) 4 2.5 2.4 3.1
Diluted headline earnings per share
(cents) 2.5 2.4 3.1
NOTES
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 for the
period ending 29 February 2012 comprise the company and its subsidiaries
(together referred to as the "group") and the group`s interest in jointly
controlled entities.
The interim financial statements contain the information required by IAS 34:
Interim Financial Reporting and 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 or its
successor, the Listings Requirements of the JSE Limited and the South African
Companies Act. The accounting policies are in accordance with IFRS and the same
accounting policies and method of computation are followed in these interim
financial statements as compared with the most recent annual financial
statements.
The interim financial statements have been prepared on the going concern basis
using a combination of the historical cost and fair value basis of accounting.
All significant accounting policies have been consistently applied to all
periods presented and throughout the group.
The consolidated interim financial statements are stated in Rands, which is the
company`s functional and presentation currency.
The preparation of interim 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.
The interim financial statements has not been reviewed or audited by Mazars.
Unaudited Audited
Six months ended Year ended
29/28 February 31 August
2012 2011 2011
R`000 R`000 R`000
2 Non-current assets held for sale
Carrying value of non-current asset held for sale 29 443 - -
The company entered into an agreement to dispose
of its 37.5% interest in the Boulevard Park
Trust ("BPT") as announced on SENS on 26 March 2012.
The investment in BPT was accounted for as an
investment in associate in prior periods. In
terms of IFRS, the investment has been carried
at the lower of carrying value or fair value less
costs to sell and reclassified to non-current assets
held for sale.
3 Share-based payment reserve
Share-based payment expense in terms of the
Trematon Share Incentive Scheme 121 - -
In terms of the incentive scheme, which was
approved at the annual general meeting of the
company on 25 January 2012, participants
were issued convertible debentures that can be
converted into ordinary shares at the option of
the participant after a period of three years.
The debentures pay interest at a rate linked to
the prime rate of borrowing.
A corresponding loan was issued to participants
at a rate linked to the prime rate of borrowing.
This loan was approved simultaneously with the issue
of debentures at the annual general meeting
mentioned above.
In terms of IFRS 2: Share-based Payments, the
convertible debentures and corresponding loans
receivable have been eliminated in the preparation
of these results. The required share-based payment
expense has been recognised as an expense and an
adjustment to equity.
4 Investment in subsidiary
During the period Trematon entered into an
agreement whereby the company has granted a call
option in respect of 10% of its shareholding in Club
Mykonos Langebaan Limited at a price equivalent
to Trematon`s cost which currently equates to R3.45
per share.
5 Headline earnings per share reconciliation
Headline earnings per share is calculated as follows:
Profit attributable to equity holders of the
parent 5 638 4 997 14 756
Realised profit on sale of associate - - (9 764)
Reversal of impairment of loan (1 274) (861) -
Tax effects on fair value adjustment of
non-current assets held for sale - - 420
Headline earnings 4 364 4 136 5 412
Headline earnings per share (cents) 2.5 2.4 3.1
Diluted headline earnings per share (cents) 2.5 2.4 3.1
The calculation of headline earnings per share is based on the weighted average
number of 173 821 416 shares in issue during the period (2011: 174 325 620).
6 Segmental information
Property
Gaming investments Unallocated
R`000 R`000 R`000
Unaudited six months ended 29 February
2012
Revenue 6 015 3 631 174
Profit/(loss) for the period 9 960 5 832 (2 826)
Total assets 101 671 123 372 13 547
Total liabilities - 38 762 -
Unaudited six months ended 28 February
2011
Revenue 390 3 168 3 115
Profit/(loss) for the period 4 876 4 254 1 569
Total assets 98 330 157 887 13 748
Total liabilities - 74 423 -
Audited year ended 31 August 2011
Revenue 390 6 201 3 115
Profit/(loss) for the period 7 805 9 412 4 716
Total assets 99 636 140 555 7 628
Total liabilities - 48 649 -
Eliminations Total
R`000 R`000
Unaudited six months ended 29 February 2012
Revenue - 9 820
Profit/(loss) for the period (6 986) 5 980
Total assets - 238 590
Total liabilities - 38 762
Unaudited six months ended 28 February 2011
Revenue - 6 673
Profit/(loss) for the period (5 164) 5 535
Total assets - 269 965
Total liabilities - 74 423
Audited year ended 31 August 2011
Revenue - 9 706
Profit/(loss) for the period (6 660) 15 273
Total assets - 247 819
Total liabilities - 48 649
Domicile and registered office: 2nd Floor, The Hudson, 30 Hudson Street, Cape
Town, 8001. PO Box 7677, Roggebaai, 8012, South Africa
Contact details: Tel: 021 421 5550, Fax: 021 421 5551
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), J Fisher*+, A Groll, AM Louw*+, R Stumpf*
* Non-executive + Independent
Sponsor: Sasfin Capital, a division of Sasfin Bank Limited
Auditor: Mazars
Secretary: S Litten
Published date: 10 May 2012
Prepared by: The group interim financial results have been prepared under the
supervision of the financial director, Mr AL Winkler CA(SA).
Date: 10/05/2012 10:52:01 Produced by the JSE SENS Department.
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