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TMT
TMT
Trematon - Interim results for the six months ended 28 February 2006
Trematon Capital Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1977/008691/06)
Share code: TMT & ISIN: ZAE000013991
("Trematon" or "the company")
Interim results for the six months ended 28 February 2006
Income statement
Unaudited Audited
Six months ended Year ended
28 February 31 August
2006 2005* 2005*
Notes R"000 R"000 R"000
Revenue 2 13 336 982 3 878
Other operating income 69 - -
Foreign exchange
(loss)/profit (3 981) 962 649
Employment costs (785) - (518)
Other operating
expenses (644) (844) (1 528)
Fair value
adjustments on trading
investments 6 902 6 845 6 845
Operating profit
before financing
costs 14 897 7 945 9 326
Financial income 2 062 451 906
Finance costs (284) (832) (1 237)
Profit before tax 16 675 7 564 8 995
Taxation 3 (4 807) - (2 222)
Profit for the period 11 868 7 564 6 773
Number of shares
issued (thousands) 171 623 105 168 171 623
Weighted average
number of shares
(thousands) 171 623 105 168 132 857
Earnings per
share (cents) 6.92 7.19 5.10
Headline earnings
per share (cents) 4 2.48 7.19 5.10
* Restated comparative figures (see note 5)
Cash flow statement
Unaudited Audited
Six months ended Year ended
28 February 31 August
2006 2005 2005
R"000 R"000 R"000
Cash inflow from
operating activities 767 689 734
Cash inflow from
investing activities 28 252 7 376 (29 628)
Cash (outflow)/inflow
from financing
activities (1 372) (8 065) 29 014
Net increase/(decrease)
in cash and
cash equivalents 27 647 0 120
Cash and cash equivalents
at beginning
of period 184 64 64
Cash and cash equivalents
at end of
period 27 831 64 184
Balance sheet
Unaudited Audited
28 February 31 August
2006 2005* 2005*
R"000 R"000 R"000
ASSETS
Non-current assets 62 647 63 874 103 313
Deferred tax asset 90 - -
Equity securities
available-for-sale 62 557 63 874 103 313
Current assets 51 480 12 523 13 102
Equity securities
held-for-trading 22 991 - -
Short-term loans 604 12 383 12 837
Other receivables 54 - 5
Receiver of Revenue - 76 76
Cash and cash equivalents 27 831 64 184
Total assets 114 127 76 397 116 415
EQUITY AND LIABILITIES
Capital and reserves 105 485 62 571 98 166
Issued capital 1 716 1 052 1 716
Share premium 198 330 163 211 198 330
Foreign exchange
translation reserve 155 - -
Fair value reserve 9 612 13 714 14 317
Accumulated loss (104 328) (115 406) (116 197)
Total equity 105 485 62 571 98 166
Non-current liabilities 5 233 - 3938
Deferred tax liability 5 233 - 3938
Current liabilities 3 409 13 826 14 311
Other payables 1 935 1 104 674
Short-term loans - 12 690 13 605
Shareholders for dividends 32 32 32
Receiver of Revenue 1 442 - -
Total equity and liabilities 114 127 76 397 116 415
Net asset value
per share (cents) 61.46 59.50 57.20
* Restated comparative figures (see note 5)
Statement of changes in equity
Foreign
currency
Issued Share translation
capital premium reserve
Notes R"000 R"000 R"000
Balance as at 1 September 2004 1 052 163 211 -
Fair value adjustment
in terms of IAS 39 5 - - -
Restated opening balance 1 052 163 211 -
Change in fair value of equity
securities available-for-sale 5 - - -
Profit for the period - - -
Balance as at 28 February 2005 1 052 163 211 -
Change in fair value of equity
securities available-for-sale 5 - - -
Shares issued 665 35 885 -
Share issue expenses - (766) -
Profit for the period - - -
Balance as at 31 August 2005 1 716 198 330 -
Fair value adjustment now
realised and recycled through
income statement - - -
Change in fair value of equity
securities available-for-sale - - -
Foreign exchange
translation difference - - 155
Profit for the period - - -
Balance as at 28 February 2006 1 716 198 330 155
Fair value Accumu-
reserve lated loss Total
R"000 R"000 R"000
Balance as at 1 September 2004 - (118 183) 46 080
Fair value adjustment
in terms of IAS 39 4 787 (4 787) -
Restated opening balance 4 787 (122 970) 46 080
Change in fair value of equity
securities available-for-sale 8 927 - 8 927
Profit for the period - 7 564 7 564
Balance as at 28 February 2005 13 714 (115 406) 62 571
Change in fair value of equity
securities available-for-sale 603 - 603
Shares issued - - 36 550
Share issue expenses - - (766)
Profit for the period - (791) (791)
Balance as at 31 August 2005 14 317 (116 197) 98 166
Fair value adjustment now
realised and recycled through
income statement (10 123) 10 123 -
Change in fair value of equity
securities available-for-sale 5 418 - 5 418
Foreign exchange
translation difference - - 155
Profit for the period - 1 745 1 745
Balance as at 28 February 2006 9 612 (104 328) 105 485
Notes
1. Basis of accounting
The condensed interim results have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), IAS 34 - Interim Financial
Reporting, the Listings Requirements of the JSE Limited and Schedule 4 of the
South African Companies Act.
The date of the Group"s transition to IFRS is 1 September 2004, and this is the
first interim financial information prepared under IFRS. The financial
statements for the year ending 31 August 2006 will be the first full-year
financial statements prepared under IFRS.
The interim information has been prepared in accordance with the IFRS and IFRIC
interpretations as adopted for use in South Africa at the time of the
preparation of the information. As these standards and interpretations are
subject to ongoing review, they may be amended between the date of this report
and the finalisation of the annual financial statements for the year to August
2006.
The audited results for the year to August 2005, and the unaudited results for
the six months to February 2005 have been restated to comply with IFRS.
Unaudited Audited
Six months ended Year ended
28 February 31 August
2006 2005 2005
R"000 R"000 R"000
2. Revenue
Profit on disposal of
held-for-trading
securities 4 442 982 1 552
Profit on disposal of
available-for-sale
securities 8 894 - -
Fees - - 2 326
13 336 982 3 878
3. Taxation
Current tax expense
- Normal tax (1 516) - (220)
- Prior year under provision - - (290)
- Capital gains tax (1 290) - (112)
Deferred tax expense
- Temporary difference (2 001) - (1 600)
(4 807) - (2 222)
4. Headline earnings per share
Headline earnings per share is
calculated as follows:
Net profit attributable to ordinary
shareholders 11 868 7 564 6 773
Profit on disposal of a
vailable-for-sale
securites net of tax (7 605) - -
Headline earnings 4 263 7 564 6 773
Headline earnings per share (cents) 2.48 7.19 5.10
5. Explanation of transition to IFRS
Previously, all fair value adjustments
on investments were recognised in
the income statement. Investments
held for capital purposes are now
classified as available-for-sale
and the related fair value
adjustment, net of tax, is
recognised in equity.
Balance sheet
Accumulated loss previously stated (101 692) (101 880)
Transferred to fair value reserve (13 714) (14 317)
Accumulated loss (115 406) (116 197)
Income statement
Profit for the period
previously stated 16 491 16 303
Transferred to fair value reserve (8 927) (9 530)
Profit for the period 7 564 6 773
Financial Review
During the six months from 31 August 2005 to 28 February 2006, Trematon"s per
share net asset value ("nav") increased from 57.2 cents to 61.5 cents.
Trematon"s largest asset is Intec Telecom plc ("Intec"), which declined in value
over the period due to a fall in its share price and an appreciation in the
value of the rand relative to the British pound. The decline in the value of
Intec was more than offset by realised and unrealised gains in the value of
local listed investments. No Intec shares were traded during the period.
During the period the loan due from Mican Ltd was repaid. Trematon currently has
no borrowings and has net cash on hand of R28 million. A further R85 million is
invested in marketable assets, which are unencumbered and can be freely traded.
The board is also considering an additional R30 million borrowing facility.
Operating profit for the period of R14.9 million mainly comprises realized
profits on trading and investment activities. Total operating expenses excluding
taxation amounted to R1.4 million.
Trematon"s dependence on Intec as the sole determinant of performance has been
reduced from 100% as at 28 February 2005 to approximately 50% at present.
However, Intec remains a material part of the nav.
Shareholders wishing to obtain information on Intec are referred to Intec"s
comprehensive website at www.intecbilling.com. Shareholders should note that
Intec does not pay dividends and is listed in a volatile market sector. On 28
April, Intec published a trading statement which indicated that it expects its
half year results to be "within the range of market expectations".
Trematon announced the results of its offer to the minority shareholders of
Shops for Africa Ltd (in liquidation) on 2 May 2006. At the time of writing,
Trematon owned 40.9 million shares (56.8%) of Shops for Africa Ltd, which were
purchased at an average price of 10.6 cents per share.
Trematon also holds shares in a number of unlisted investments and is
investigating opportunities in this area. This component of nav is not yet very
significant but it may become larger during 2006 if suitable opportunities
arise.
Dividend policy
It is Trematon"s policy to reinvest its cash reserves and a dividend is unlikely
to be declared during this financial year.
Prospects
Management is focused on increasing the per share net asset value of the company
over the long term. Trematon"s main assets are listed and not highly
diversified, therefore the net asset value may be volatile in the short term.
By order of the board
Arnold Shapiro
Chief Executive Officer
Cape Town
4 May 2006
Domicile and registered office Postal address
1st Floor The Spearhead PO Box 7677
42 Hans Strijdom Avenue Roggebaai
Foreshore, Cape Town 8012
8001
Directors: M Kaplan* (Chairman), AJ Shapiro (CEO), A Groll, AM Louw*,
R Stumpf*
*Non-executive
Company secretary: SA Litten
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd,
70 Marshall Street, Johannesburg, 2001
Principal bankers: Investec Private Bank
Sponsor: Bridge Capital Services (Pty) Ltd
Auditors: KPMG Inc.
Date: 04/05/2006 02:05:14 PM Produced by the JSE SENS Department
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