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Trematon - Interim results for the six months ended 28 February 2006

Release Date: 04/05/2006 14:05
Code(s): TMT
Wrap Text

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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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