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TREMATON CAPITAL INVESTMENTS LIMITED (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) (REGISTRATION NUMBER 97/08691/06
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 28 FEBRUARY 1999 GROUP INCOME STATEMENT
(AUDITED) SIX MONTHS SIX MONTHS TWELVE TO TO MONTHS TO 28 FEBRUARY 28 FEBRUARY 31 AUGUST 1999 1998 1998
R000 R000 R000 SHARE OF INCOME EARNED BY
PRIVATE EQUITY INVESTMENTS 2 834 1 844 2 117 FEES AND INVESTMENT INCOME
NET OF DIRECT EXPENSES 1 652 384 731
NET INTEREST EARNED 3 603 5 908 12 807 PROFIT BEFORE EXPENSES 8 089 8 136 14 935 MANAGEMENT EXPENSES (1 884) (1 165) (2 775) PROFIT BEFORE LOSS ON DISPOSAL
OF SUBSIDIARY 6 205 6 971 12 160 LOSS ON DISPOSAL OF SUBSIDIARY (1 242) - -
PROFIT BEFORE TAXATION 4 963 6 971 12 160 TAXATION 912 1 878 3 881
NET INCOME AFTER TAXATION 4 051 5 093 8 279 LOSS ATTRIBUTABLE TO
OUTSIDE SHAREHOLDERS 87 - -
RETAINED INCOME FOR THE PERIOD 4 138 5 093 8 279
HEADLINE EARNINGS PER SHARE (CENTS) 7,9 9,7 15,8 GROUP BALANCE SHEET
28 FEBRUARY 28 FEBRUARY 31 AUGUST 1999 1998 1998
R000 R000 R000 CAPITAL EMPLOYED
SHARE CAPITAL AND PREMIUM 104 023 104 023 104 023 RETAINED INCOME 10 842 5 093 6 704
ORDINARY SHAREHOLDERS' INTEREST 114 865 109 116 110 727 OUTSIDE SHAREHOLDERS' INTEREST (87) - -
CONVERTIBLE DEBENTURES 8 275 7 995 7 995
123 053 117 111 118 722 EMPLOYMENT OF CAPITAL
FIXED ASSETS 675 145 649
PRIVATE EQUITY INVESTMENTS 64 639 22 288 52 992 NON CURRENT ASSETS 8 249 7 995 8 252 CURRENT ASSETS
ACCOUNTS RECEIVABLE 1 273 954 2 050
SECURITIES HELD FOR TRADING 17 366S - -
PROCEEDS ON SALE OF SUBSIDIARY 7 217 - -
CASH RESOURCES AND SHORT TERM LOANS 29 094 88 021 61 454 54 950 88 975 63 504 CURRENT LIABILITIES
ACCOUNTS PAYABLE 806 414 1 219
TAXATION 4 593 1 878 3 881
SHAREHOLDERS FOR DIVIDENDS 61 - 1 575
5 460 2 292 6 675
NET CURRENT ASSETS 49 490 86 683 56 829 123 053 117 111 118 722 NO. OF SHARES IN ISSUE 52 500 52 500 52 500 NET ASSET VALUE (CENTS) 218,8 207,8 210,9 COMMENT
TREMATON EARNED R4,1M IN THE FIRST HALF OF YEAR OF 1999 COMPARED TO R5,1M IN THE SAME PERIOD OF 1998. EARNINGS PER SHARE WERE 7,9 CENTS (1998 : 9,7 CENTS). AS EXPECTED, FOLLOWING THE INCREASED INVESTMENT OF R34,8M IN PRIVATE EQUITY, EARNINGS FROM THIS SOURCE INCREASED WHILE INTEREST EARNED ON SURPLUS FUNDS REDUCED.
THESE RESULTS HAVE BEEN PREPARED ON THE BASIS THAT THE SALE OF TREGIA HOLDINGS, THE 74,9% HELD LINKED INVESTMENT SERVICE PROVIDER WAS MADE AT 28 FEBRUARY 1999. THE LOSS OF R1,2M ON SALE REDUCED EARNINGS PER SHARE BY 2,4 CENTS.
THE RESULTS HAVE NOT BEEN AUDITED BUT HAVE BEEN REVIEWED BY THE AUDITORS, KPMG. PRIVATE EQUITY INVESTMENTS
THE PRIVATE EQUITY INVESTMENTS MADE SINCE THE END OF THE COMPARABLE PERIOD HAVE INCREASED INVESTED FUNDS TO R64,6M FROM R22,3M. EQUITY ACCOUNTED EARNINGS FROM THESE INVESTMENTS INCREASED BY 53,7% TO R2,8M FROM R1,8M.
THE INCOME WAS LOWER THAN ANTICIPATED PRIMARILY BECAUSE OF 40% HELD NATAL WHOLESALE JEWELLERS AND 27,5% HELD JOYTECH NOT ACHIEVING BUDGETED PROFITS. PROFITABILITY OF BOTH THE RETAIL JEWELLERY AND THE FAMILY ENTERTAINMENT CENTRE CHAINS WERE ADVERSELY AFFECTED BY THE HIGHER INTEREST RATES WHICH PREVAILED DURING THE PERIOD, PARTICULARLY DURING AND SUBSEQUENT TO THE CHRISTMAS PERIOD, AND THE RESULTANT NEGATIVE IMPACT ON CONSUMER SPENDING.
AT 28 FEBRUARY, TREMATON'S PRINCIPAL PRIVATE EQUITY INVESTMENTS WERE:
COMPANY % SHAREHOLDING NATURE OF BUSINESS NATAL WHOLESALE
JEWELLERS 40% JEWELLERY RETAILER
SUPERCART 35% DESIGN, MARKETING AND DISTRIBUTION OF PLASTIC SUPERMARKET TROLLEYS JOYTECH 27,5% FAMILY ENTERTAINMENT CENTRES UNISCHOOL 50% ENTRY LEVEL IT TRAINING TREMATON FINANCIAL SERVICES TREGIA HOLDINGS
TREMATON HAS, SUBSEQUENT TO THE REPORTING DATE CONCLUDED AN AGREEMENT TO DISPOSE OF ITS 74,9% SHAREHOLDING IN THE LINKED INVESTMENT SERVICE PROVIDER FOR R7,2M AS IT DID NOT ACHIEVE THE OBJECTIVES SET FOR IT. A LOSS OF R1,2M WAS INCURRED ON THE DISPOSAL WHICH IS INCLUDED IN THE RESULTS. THE LOSS ON DISPOSAL HAS REDUCED HEADLINE EARNINGS PER SHARE BY 2,4 CENTS FOR THE PERIOD. FUND MANAGEMENT
TREMATON HAS INVESTED A PORTION OF ITS SURPLUS FUNDS IN A SECURITIES TRADING PORTFOLIO. EARNINGS ACHIEVED IN THE PERIOD AMOUNT TO R1 652 000 NET OF DIRECT EXPENSES AND WERE EARNED MAINLY FROM LIMITED RISK INVESTMENT IN EQUITIES. PROSPECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
TREMATON HAS APPROXIMATELY R50 MILLION AVAILABLE FOR NEW INVESTMENTS AND IS EVALUATING OPPORTUNITIES IN INFORMATION TECHNOLOGY AND FINANCIAL SERVICES. SHAREHOLDERS ARE REFERRED TO THE CAUTIONARY ANNOUNCEMENTS WHICH APPEARED IN THE PRESS ON 1 APRIL, 23 APRIL AND 18 MAY 1999. THE NEGOTIATIONS REFERRED TO HAVE TAKEN LONGER TO COMPLETE THAN ORIGINALLY EXPECTED BUT SHOULD BE CONCLUDED SHORTLY. ACCORDINGLY, SHAREHOLDERS ARE ADVISED TO CONTINUE TO EXERCISE CAUTION IN DEALING IN THE COMPANY'S SECURITIES UNTIL AN ANNOUNCEMENT IS MADE. DIVIDEND
IN KEEPING WITH EXISTING POLICY NO INTERIM DIVIDEND HAS BEEN DECLARED. BY ORDER OF THE BOARD SM HOLMES SECRETARY 28 MAY 1999 REGISTERED OFFICE: 25 MARRIOTT ROAD BEREA DURBAN, 4001 TELEPHONE NO: (031) 309 8440 FAX NO: (031) 309 8432 POSTAL ADDRESS: P.O. BOX 712 DURBAN 4000
