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TREMATON CAPITAL INVESTMENTS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 97/08691/06)
AUDITED GROUP RESULTS FOR THE FINANCIAL YEAR ENDED 31 AUGUST 1999
GROUP INCOME STATEMENT
31 AUGUST 31 AUGUST
1999 1998
R'000 R'000
ATTRIBUTABLE INCOME FROM ASSOCIATED
COMPANIES 2 347 2 117
FEES AND INVESTMENT INCOME 1 330 731
NET INTEREST EARNED 5 434 12 087
PROFIT BEFORE EXPENSES 9 111 14 935
MANAGEMENT EXPENSES (4 092) (2 775)
PROFIT BEFORE EXCEPTIONAL ITEMS 5 019 12 160
EXCEPTIONAL ITEMS (49 148) -
LOSS ON DISPOSAL OF INVESTMENTS 13 414 -
RESTRUCTURING COSTS 1 900 -
INVESTMENTS WRITTEN DOWN 33 834 -
(LOSS)/PROFIT BEFORE TAX (44 129) 12 160
TAXATION (368) (3 881)
NET (LOSS)/INCOME ATTRIBUTABLE
TO SHAREHOLDERS (44 497) 8 279
RECONCILIATION OF HEADLINE EARNINGS
NET (LOSS)/INCOME ATTRIBUTABLE
TO SHAREHOLDERS (44 497) 8 279
ADJUSTED FOR
EXCEPTIONAL ITEMS 49 148 -
RESTRUCTURING COSTS (1 900) -
HEADLINE EARNINGS ATTRIBUTABLE
TO SHAREHOLDERS 2 751 8 279
HEADLINE EARNINGS PER SHARE (CENTS) 3,7 15,8
(LOSS)/EARNINGS PER SHARE (CENTS) (59,8) 15,8
WEIGHTED AVERAGE NUMBER OF SHARES
IN ISSUE (000) 74 375 52 500
SHARES IN ISSUE (000) 105 000 52 500
GROUP BALANCE SHEET
31 AUGUST 31 AUGUST
1999 1998
R'000 R'000
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 126 155 110 727
CONVERTIBLE DEBENTURES 8 065 7 995
DEFERRED TAXATION 12 -
134 232 118 722
EMPLOYMENT OF CAPITAL
NON CURRENT ASSETS 8 026 7 981
INVESTMENTS 60 533 52 992
LISTED INVESTMENTS 33 465 -
UNLISTED INVESTMENTS 27 068 52 992
FIXED ASSETS 593 649
CURRENT ASSETS
ACCOUNTS RECEIVABLE 540 2 050
SECURITIES HELD FOR TRADING 4 034 -
PROCEEDS ON SALE OF INVESTMENT 12 000 -
CASH RESOURCES AND SHORT TERM LOANS 51 324 61 454
67 898 63 504
CURRENT LIABILITIES
ACCOUNTS PAYABLE 2 818 2 523
TAXATION - 3 881
2 818 6 404
NET CURRENT ASSETS 65 080 57 100
134 232 118 722
NUMBER OF SHARES IN ISSUE (000) 105 000 52 500
NET ASSET VALUE (CENTS) 120,1 218,8
GROUP CASH FLOW STATEMENT
31 AUGUST 31 AUGUST
1999 1998
R'000 R'000
NET CASH (OUTFLOW)/INFLOW GENERATED
FROM OPERATING ACTIVITIES (15 409) 9 027
NET CASH FLOW FROM FINANCING
ACTIVITIES 59 995 112 018
ISSUE OF SHARES AT A PREMIUM NET OF
LISTING EXPENSES 59 925 104 023
ISSUE OF CONVERTIBLE DEBENTURES 70 7 995
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (54 716) (59 591)
ACQUISITION OF COMPUTERS AND
OFFICE EQUIPMENT (119) (721)
LOANS (45) (7 995)
INVESTMENTS (54 552) (50 875)
(NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENT (10 130) 61 454
CASH AND CASH EQUIVALENT AT
BEGINNING OF YEAR 61 454 -
CASH AND CASH EQUIVALENT AT
END OF YEAR 51 324 61 454
REVIEW OF RESULTS
GROUP PROFIT AFTER TAX BEFORE EXCEPTIONAL ITEMS FOR THE YEAR AMOUNTED TO R4,65
MILLION COMPARED WITH R8,28 MILLION IN 1998. THIS REDUCTION IS ATTRIBUTABLE TO
LOWER INTEREST EARNED FOLLOWING A GREATER PORTION OF CASH RESERVES BEING
INVESTED IN PRIVATE EQUITY INVESTMENTS DURING THE YEAR, WITHOUT AN EQUIVALENT
INCREASE IN ATTRIBUTABLE INCOME BEING EARNED BY THE PRIVATE EQUITY INVESTMENTS.
MANAGEMENT EXPENSES ALSO ROSE AS THE GROUP EXPANDED ITS OPERATIONS.
PERFORMANCE OF THE PRIVATE EQUITY INVESTMENTS WAS GENERALLY DISAPPOINTING.
PROFITABILITY OF NWJ WHOLESALE JEWELLERS, AND JOYTECH WERE ADVERSELY AFFECTED
BY PREVAILING DEPRESSED RETAIL TRADING CONDITIONS. BOTH RETAIL CHAINS RECORDED
PROFITS SIGNIFICANTLY BELOW BUDGET. SUPERCART, THE PLASTIC SHOPPING TROLLEY
DISTRIBUTOR DID NOT MEET FORECASTS IN RESPECT OF ITS OFF-SHORE OPERATIONS
RESULTING IN CONTINUING LOSSES.
FOLLOWING THE CHANGE IN CONTROL REFERRED TO BELOW, THE GROUP HAS RESTRUCTURED
ITS ACTIVITIES AND DISPOSED OF OR WRITTEN DOWN CERTAIN OF ITS INVESTMENTS
RESULTING IN A CHARGE FOR EXCEPTIONAL ITEMS AGGREGATING R49,1 MILLION. LOSSES
OF R13,4 WERE INCURRED IN THE DISPOSALS OF THE HOLDINGS IN TREGIA, UNISCHOOL
AND JOYTECH, COSTS OF R1,9 MILLION WERE INCURRED IN THE RESTRUCTURING OF
OPERATIONS AND A PROVISION OF R33,8 MILLION WAS MADE TO REDUCE THE CARRYING
COSTS OF THE SHAREHOLDINGS IN SUPERCART AND PEREGRINE HOLDINGS LTD TO DIRECTORS
VALUATION AND MARKET VALUATION RESPECTIVELY. A LOSS ATTRIBUTABLE TO
SHAREHOLDERS OF R44,5 MILLION WAS THUS INCURRED FOR THE YEAR.
HEADLINE EARNINGS PER SHARE FOR THE PERIOD AMOUNTED TO 3,7 CENTS (1998:15,8
CENTS), WHICH AFTER TAKING ACCOUNT OF EXCEPTIONAL ITEMS TRANSLATED INTO AN
ATTRIBUTABLE LOSS OF 59,8 CENTS PER SHARE (1998: ATTRIBUTABLE PROFIT 15,8
CENTS).
NO DIVIDEND HAS BEEN DECLARED FOR THE YEAR.
CHANGE OF CONTROL AND REFOCUS OF ACTIVITIES
AS APPROVED BY SHAREHOLDERS IN GENERAL MEETING, WITH EFFECT FROM 1 APRIL 1999,
TREMATON ACQUIRED 3 401 408 SHARES IN PEREGRINE HOLDINGS LTD, FROM VALORTRADE
28 (PTY) LTD, A WHOLLY-OWNED SUBSIDIARY OF THE FYNBOS TRUST. THE PURCHASE
CONSIDERATION WAS SETTLED VIA THE ALLOTMENT AND ISSUE TO VALORTRADE OF 52 500
000 ORDINARY SHARES IN TREMATON RESULTING IN THE FYNBOS TRUST EFFECTIVELY
ACQUIRING A 50% CONTROLLING INTEREST IN TREMATON.
FOLLOWING THIS TRANSACTION TREMATON WILL FOCUS ON INVESTMENTS WITH HIGH GROWTH
PROSPECTS AND STRONG MANAGEMENT WITH PREFERENCE BEING GIVEN TO INVESTMENTS IN
TECHNOLOGY BUSINESSES.
PURSUANT TO THIS STRATEGY, TREMATON'S INVESTMENT PORTFOLIO AND OPERATIONS HAVE
BEEN RESTRUCTURED AND INVESTMENTS NOT MEETING PERFORMANCE CRITERIA HAVE BEEN OR
ARE BEING DISPOSED OF. TO DATE THE FOLLOWING HAS BEEN ACHIEVED:
- THE 74% SHAREHOLDING IN LINKED INVESTMENT SERVICE PROVIDER, TREGIA HOLDINGS
HAS BEEN SOLD;
- THE 80% OWNED IT JOINT VENTURE INVESTMENT FUND, TREMATON TECHNOLOGIES, HAS
BEEN CLOSED DOWN;
- THE 50% SHAREHOLDING IN ENTRY LEVEL IT TRAINING BUSINESS, UNISCHOOL HAS BEEN
SOLD;
- THE 27,5% SHAREHOLDING IN FAMILY ENTERTAINMENT CENTRE CHAIN, JOYTECH, HAS
BEEN SOLD;
- NEGOTIATIONS HAVE COMMENCED ON THE DISPOSAL OF THE 36% SHAREHOLDING IN
SUPERCART;
- THE APPLICATION FOR A BANKING LICENCE HAS BEEN WITHDRAWN;
- THE BOARD HAS BEEN ENLARGED; AND
- TREMATON'S MANAGEMENT HAS BEEN REDUCED, SAVING OPERATING COSTS.
ADDITIONAL DETAILS RELATING TO THE DISPOSAL TRANSACTIONS REFERRED TO ABOVE WILL
BE INCLUDED IN THE ANNUAL FINANCIAL STATEMENTS TO BE CIRCULATED TO SHAREHOLDERS
AT 31 AUGUST TREMATON'S INVESTMENT PORTFOLIO COMPRISED:
COMPANY/BUSINESS % SHAREHOLDING NATURE OF BUSINESS
PEREGRINE HOLDINGS 1,68 LISTED, SPECIALISED FINANCIAL
SERVICES GROUP
NWJ WHOLESALE JEWELLERS 40 JEWELLERY RETAIL
GENERATION 50 DESIGN AND MERCHANDISING OF
SPECIALISED APPAREL
DIGITOT 50 DESIGN AND MARKETING OF ELECTRONIC
EQUIPMENT AND MANAGEMENT SYSTEMS FOR THE LIQUOR INDUSTRY
SUPERCART 36 DESIGN, MARKETING AND DISTRIBUTION
OF PLASTIC SUPERMARKET TROLLEYS
SAVE FOR THE SUPERCART HOLDING, TREMATON DOES NOT CURRENTLY INTEND TO DISPOSE
OF THE ABOVEMENTIONED INVESTMENTS.
POST ACCOUNTING DATE EVENT
SUBSEQUENT TO THE REPORTING DATE, TREMATON HAS ACQUIRED A 25% SHAREHOLDING IN
REAL AFRICA DUROLINK TECHNOLOGY INVESTMENTS (PTY) LTD A MANAGER OF AND
INVESTMENT ADVISOR TO A TECHNOLOGY BASED PRIVATE EQUITY FUND. AN INVESTMENT
WILL ALSO BE MADE IN THAT FUND.
PARTNERS IN THIS MANAGEMENT AND ADVISORY COMPANY ARE REAL AFRICA DUROLINK
HOLDINGS LTD AND FUND CEO, MR AVIAD EYAL, WHO HAS ALSO BEEN APPOINTED TO THE
BOARD OF DIRECTORS OF TREMATON.
PROSPECTS
TREMATON CURRENTLY HAS CASH AND NEAR CASH RESOURCES AMOUNTING TO R65,5 MILLION
FOR FUTURE INVESTMENT. THE BOARD OF DIRECTORS IS COMMITTED TO INVESTING THESE
FUNDS IN HIGH PERFORMING BUSINESSES.
IT IS ANTICIPATED THAT THE BUSINESSES MAKING UP TREMATON'S CURRENT INVESTMENT
PORTFOLIO WILL GENERATE IMPROVED OPERATING RESULTS FOR THE FORTHCOMING YEAR AND
THAT MANAGEMENT EXPENSES WILL BE REDUCED BY 50%.
YEAR 2000
TREMATON AND ITS SUBSIDIARIES ARE FULLY YEAR 2000 COMPLIANT. CONFIRMATION HAS
BEEN RECEIVED FROM THE MANAGEMENT OF TREMATON'S ASSOCIATED COMPANIES THAT THOSE
COMPANIES ARE EITHER FULLY YEAR 2000 COMPLIANT OR THAT ADEQUATE STEPS HAVE BEEN
TAKEN TO MINIMISE ANY DISRUPTIONS WHICH MIGHT BE ASSOCIATED WITH YEAR 2000, THE
IMPACT OF WHICH DISRUPTIONS ARE EXPECTED TO HAVE NO MATERIAL EFFECT ON THE
OPERATIONS OF THOSE COMPANIES.
BY ORDER OF THE BOARD.
S M HOLMES
SECRETARY
24 NOVEMBER 1999
REGISTERED OFFICE: POSTAL ADDRESS:
25 MARRIOTT ROAD PO BOX 712
BEREA DURBAN, 4000
DURBAN, 4001
TELEPHONE: 031-3098440
FAX : 031-3098432
DIRECTORS: N A LABUSCHAGNE (CHAIRMAN), P DITZ, A EYAL, M FARRER, B GERSON, R B
MCELLIGOTT, M G MEEHAN, A J F MUNDELL, RE SHERRELL
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