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TREMATON CAPITAL INVESTMENTS LIMITED - REVIEWED RESULTS FOR THE YEAR ENDED 31
AUGUST 2003 AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
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")
REVIEWED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003 AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
GROUP BALANCE SHEET
Reviewed Audited
2003 2002
R"000 R"000
ASSETS
Non-current assets 37 227 26 158
Property, plant and equipment - 586
Investments 37 227 25 572
Current assets 141 1 158
Accounts receivable - 616
Taxation 76 178
Cash and short-term loans 65 364
Total assets 37 368 27 316
EQUITY AND LIABILITIES
Ordinary shareholders" interest 31 854 23 276
Current liabilities 5 514 4 040
Accounts payable 328 595
Interest-bearing debt 5 186 3 445
Total equity and liabilities 37 368 27 316
Net asset value per share (cents) 30 22
Fully diluted net asset value per share (cents) 30 22
Number of shares in issue at 31 August (000) 105 168 105 168
Diluted number of shares in issue (000) 105 168 105 168
GROUP INCOME STATEMENT
Reviewed Audited
2003 2002
R"000 R"000
Net interest (paid)/received (763) 817
Operating costs (1 626) (2 022)
- net management expense (1 221) (1 444)
- listing, statutory and professional costs (405) (578)
Loss from operations (2 389) (1 205)
Investment valuation adjustments 13 978 (59 602)
Profit/(loss) before taxation 11 589 (60 807)
Taxation expense - -
Profit/(loss) after taxation 11 589 (60 807)
Share of loss of associates (3 011) (1 252)
Profit/(loss) for the year 8 578 (62 059)
Reconciliation between loss and headline loss
Profit/(loss) attributable to shareholders 8 578 (62 059)
Adjustments:
Profit on disposal of investments 1 860 -
Exceptional items - 5 252
Headline profit/(loss) attributable to shareholders 6 718 (56 807)
Headline profit/(loss) per share (cents) 6,4 (52,0)
Profit/(loss) per share (cents) 8,2 (56,8)
Weighted average number of shares in issue (000) 105 168 109 200
*Investment valuation adjustments
- Profit on disposal of investments 1 860 -
- Investments in associates written down - (2 812)
- Market valuation adjustments 12 118 (64 854)
- Reversal of amounts previously written off
against associate - 8 064
13 978 (59 602)
GROUP CASH FLOW STATEMENT
Reviewed Audited
2003 2002
R"000 R"000
Cash flows from operating activities
Cash generated/(absorbed) by operations (1 842) (4 832)
Taxation refund/(paid) 102 (4)
Net finance (cost)/income (763) 817
Net cash inflow/(outflow) from operating
activities (2 503) (4 019)
Net cash inflow from investing activities 463 6 219
Net (decrease)/increase in cash and cash equivalents (2 040) 2 200
Cash and cash equivalents at beginning of year (3 081) (5 281)
Cash and cash equivalents at end of year (5 121) (3 081)
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated
Capital Premium Loss Total
Group R"000 R"000 R"000 R"000
Balance at 31 August 2001 1 092 171 235 (78 928) 93 399
Shares cancelled (40) (8 024) - (8 064)
Net loss for the year - - (62 059) (62 059)
Balance at 31 August 2002 1 052 163 211 (140 987) 23 276
Net profit for the year - - 8 578 8 578
Balance at 31 August 2003 1 052 163 211 (132 409) 31 854
REVIEW OF RESULTS
During the year under review, Trematon"s net asset value per share increased
from 22 cents to 30 cents mainly as a result of the increase in the share price
of Intec Telecoms Systems Plc ("Intec"). The headline profit per share for the
year of 6,4 cents compares with the headline loss of 52 cents incurred in 2002.
At 31 August Trematon"s only significant investment comprised an 11,47%
shareholding in Mican Limited ("Mican") whose most significant asset in turn is
its shareholding in Intec. The market price of Intec shares rose from 22p at 31
August 2002 to 40p at 31 August 2003. Intec"s operating performance improved
markedly for its financial year ended 30 September 2003. Its adjusted profit
before tax for the period grew by 145% to GBP5,4m from GBP2,2m in 2002, which
translated into adjusted earnings per share of 2,17p (2002: 0.46p). Its cash
increased to GBP15,3m on positive operating cash flow of GBP8,5m (2002:
GBP2,8m).
As announced in the interim report for the six-month period ended 28 February
2003, the group disposed of its investments, other than those in Mican and
Gracefield Investments (Pty) Ltd ("Gracefield") to a consortium comprising an
investment bank, non-executive Director Mr RE Sherrell and Trematon executive
management, including CEO Mr RB McElligott. The purchase consideration was
nominal but exceeded the aggregate carrying value of the investments. Following
this transaction Trematon will no longer be required to continue funding the
entities disposed of and in addition Trematon"s operating cost will be
substantially reduced by virtue of no longer having any full-time executive
management. The transaction was approved by a disinterested quorum of directors.
RESTRUCTURE OF INVESTMENT AND WITHDRAWAL OF CAUTIONARY NOTICE
Further to Trematon"s cautionary announcement dated 26 November 2002 and the
subsequent announcements extending the cautionary notice, shareholders are
advised that the restructuring of Mican and Gracefield"s funding requirements
and the arrangements between their shareholders have now been agreed to in
principle by the shareholders and financiers. The implementation of this
restructuring is expected to be completed during December/January. As Trematon
has only an 11,47% interest in Mican and Gracefield it was not in a position to
make a significant impact on these negotiations. The directors of Trematon
believe that the restructuring is beneficial to Trematon and its shareholders,
particularly as Trematon will now be in direct control of its shareholding in
Intec.
Pursuant to the restructuring, Trematon and the other Mican shareholders will
repay Mican"s debt and will receive Mican"s Intec shares which they will then
hold directly. Consequently, 8,6m shares in Intec will be transferred to
Trematon"s wholly owned subsidiary, Prygate International Limited. These shares
will be pledged to financiers to secure a loan facility of R12,5m granted to
Prygate to repay its net attributable portion of Mican"s debt.
During the year, Mican disposed of its shareholding in Helsinki listed,
Iocore Oy, and Gracefield disposed of its main asset, Iocore (Pty) Limited. The
proceeds of both disposals were used to reduce debt.
Following implementation of the transactions referred to above, Mican and
Gracefield will have repaid all debt owing to their bankers and the only
significant assets remaining will be those of Mican which will comprise:
- its shareholdings in IT companies, Adaptive Systems (trading as Iocore in
Denmark, Norway and Sweden) and Iocore Australia. It is the intention to dispose
of these investments, the proceeds of which will be paid to its shareholders;
and
- A secured R18m interest-bearing, Rand-denominated loan advanced by it, which
is repayable by December 2008.
Trematon"s assets will then consist of:
- 8,6m Intec shares;
- a R9,1m Rand-denominated, interest-bearing claim on loan account against Mican
which will be repaid from the proceeds of the repayment of the R18m secured loan
advanced by Mican referred to above;
- an 11,47% of the proceeds of Mican"s remaining investments when they are
disposed of.
The implementation of the transaction referred to above will not have a
significant effect on either the net asset value or earnings per share of
Trematon.
Shareholders are therefore no longer required to exercise caution when dealing
in their Trematon shares.
PROSPECTS
The future value of Trematon is dependent mainly on the price of Intec shares
which since 31 August 2003, has increased from 40p to 70p, increasing Trematon"s
net asset value per share to 64 cents. The directors of Intec are cautiously
optimistic of the group"s prospects for 2004.
ACCOUNTING POLICIES
The financial statements of the Group comply with South African Statements of
Generally Accepted Accounting Practice and are consistent with those applied in
the previous financial year.
REVIEW BY AUDITORS
The company"s auditors, KPMG Inc, have reviewed these results. Their review
opinion is available for inspection at the company"s registered office.
APPROVAL BY THE DIRECTORS
The directors of Trematon have approved the reviewed results for the year
ended 31 August 2003.
By order of the board
CW Garvie
Secretary
26 November 2003
Registered office: The Manor House, 14 Nuttall Gardens, Morningside, 4001
Postal address: PO Box 712, Durban, 4000
Telephone: (031) 303 9667
Fax: (031) 312 1989
Directors: NA Labuschagne (Chairman), RB McElligott (CEO), P Ditz, M Farrer, MG
Meehan, AJF Mundell, RE Sherrell
Transfer secretaries: Computershare Limited, 70 Marshall Street, Johannesburg,
2001
Sponsor: Merrill Lynch
Global Markets & Investment Banking Group
Merrill Lynch South Africa (Pty) Ltd
Registration number 1995/001805/07
Registered Sponsor and Member of the
JSE Securities Exchange South Africa
Date: 28/11/2003 07:00:18 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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