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TMT - Trematon Capital Investments - Audited results for the year
ended 31 August 2007
Trematon Capital Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/008691/06)
Share code: TMT & ISIN: ZAE000013991
("Trematon")
Audited results for the year ended 31 August 2007
Directors` review
The past year has seen several significant changes in Trematon`s investment
portfolio. All of the shares held in Intec Telecom plc were sold during the
year and Trematon no longer holds any offshore investments. In total
R47.6 million was realised from the sale of Intec for a pre-tax profit of
R3.7 million.
Management`s emphasis over the past year has been on the rejuvenation of
SA REIT Ltd (formerly Shops for Africa Ltd) and continued investment in the
unlisted portfolio and property.
There was less short-term equity trading when compared to the previous
reporting period. This resulted in lower trading profits. EPS declined to
4.6c per share (2006: 9.0c) and HEPS to 1.5c per share (2006: 4.6c). As
always, future trading profits will depend upon available opportunities and
can be expected to be variable.
The long-term investment portfolio increased in value during the period
which resulted in an increase in the fair value reserve to R40.3 million
(2006: R7.1 million). This represents a net increase of 19.0c per share. In
terms of IFRS, increases of this nature in the value of long-term
investments are not accounted for in the income statement but are reflected
as balance sheet adjustments only. The growth in the long-term asset value
is therefore not reflected in earnings until the assets are realised.
Aside from property, Trematon`s primary long-term assets are equity
investments in Grand Parade Investments Limited, Club Mykonos Langebaan
Limited and SA REIT Ltd. At year-end SA REIT Ltd was a subsidiary and was
accordingly consolidated.
Trematon made further purchases of unlisted investments during the period
and management will continue to actively pursue opportunities in this area.
Trematon has two property investments. These are a joint venture with
Gateway Property Developers (Pty) Ltd in a development in the Strand on the
route of the proposed new N2 highway and an agreement to participate in a
venture with Faircape Property Developers CC on a 2 hectare site on the Cape
Town CBD periphery. Both of these developments are well underway and
although they will absorb cash in the current financial year, the long-term
profit prospects are good.
Gross expenses for the year amounted to R6.5 million (2006: R3.5 million) of
which R2.0 million (2006: R1.8 million) related to directors` remuneration.
The increase in costs over 2006 reflects mainly administrative costs due to
the increased levels of investment activity and the regulatory costs
associated with operating a listed company.
Post Balance Sheet Events
At year-end, Trematon`s cash balances included an amount of R27.7 million in
trust which was irrevocably allocated for the purchase of 56.3 million
shares in SA REIT Ltd at 50.0c per share. Since year-end, the shares have
been issued to Trematon. Trematon now owns a total of 121.0 million shares
in SA REIT Ltd which had a total market value of R95.6 million on the 31st
October 2007. The net effect of the holding in SA REIT Ltd (assuming no
other changes) as at 31st October 2007, at which date SA REIT Ltd closed at
a price of 79.0c per share, would have been to increase Trematon`s NAV by
21.0c per share (after adjusting for tax), compared to the figure calculated
as at 31st August 2007.
Trematon currently owns 19% of SA REIT Ltd in its newly enlarged form and
will continue to play a strategic role in its future direction. In future,
SA REIT Ltd will not be consolidated in Trematon`s accounts.
For full details of SA REIT Ltd`s activities, shareholders are referred to
the results published on SENS on 1st November 2007.
Prospects
Trematon`s investments are focused mainly in the Western Cape property
market and the Western Cape gaming industry. These investments will form the
basis of the immediate prospects for the company but management activities
are not limited to these areas and other opportunities are being sought. At
present, all cash resources are earmarked for existing investment
opportunities and no dividends are planned for 2008. Borrowings will be
utilised where appropriate.
There are good prospects for further NAV and income growth in the 2008
financial year and beyond.
MONTY KAPLAN ARNOLD SHAPIRO
Chairman Chief Executive Officer
Cape Town
7 November 2007
Balance sheet
Audited Audited
31 August 31 August
2007 2006
R`000 R`000
ASSETS
Non-Current Assets 102 397 81 559
Equipment 104 18
Investment in joint venture 7 488 4 718
Investments 91 841 76 047
Loans receivable 2 964 -
Deferred tax asset - 776
Current Assets 61 569 30 437
Investments - 7 548
Tax receivable 148 69
Trade and other receivables 1 520 31
Cash and cash equivalents 59 901 22 789
Total Assets 163 966 111 996
EQUITY AND LIABILITIES
Equity 153 627 105 161
Share capital and share premium 203 296 203 296
Fair value reserve 40 249 7 095
Accumulated loss (97 115) (105 230)
Total equity attributable to
equity holders of the parent 146 430 105 161
Minority interest 7 197 -
Non-Current Liability 8 388 1 968
Deferred tax liability 8 388 1 968
Current Liabilities 1 951 4 867
Tax payable 1 784 4 358
Trade and other payables 153 476
Interest on debentures - 32
Bank overdraft 14 1
Total Equity and Liabilities 163 966 111 996
Net asset value per share (cents) 84 cents 60 cents
(based on shares in issue at end of year)
Income statement
Audited Audited
Year ended Year ended
31 August 31 August
2007 2006
Notes R`000 R`000
Revenue 18 449 23 746
Trading profit 6 404 17 564
Investment income 6 371 3 411
Finance costs (792) (288)
Loss from equity accounted investment (247) (52)
Profit before taxation 11 736 20 635
Taxation (2 662) (5 020)
Profit for the year 9 074 15 615
Attributable to:
Equity holders of the parent 8 115 15 615
Minority interest 959 -
9 074 15 615
Number of shares issued (thousands) 174 873 174 873
Weighted average number
of shares (thousands) 174 873 173 248
Earnings per share (cents) 4,6 9,0
Headline earnings per share (cents) 2 1,5 4,6
Cash flow statement
Audited Audited
Year ended Year ended
31 August 31 August
2007 2006
R`000 R`000
Cash flows from operating activities
Cash used in operations (7 653) (3 416)
Interest received 4 906 3 292
Dividends received 1 465 119
Finance costs (792) (288)
Tax paid (6 294) (1 288)
Net cash from operating activities (8 368) (1 581)
Cash flows from investing activities
Acquisition of equipment (91) (20)
Acquisition of subsidiary, net of cash acquired 8 162 -
Increase in loans receivable (2 964) -
Loan advanced to joint venture (3 016) (4 770)
Acquisition of investments (49 655) (85 023)
Proceeds from sale of investments 93 034 123 930
Net cash from investing activities 45 470 34 117
Cash flows from financing activities
Proceeds on share issue - 3 250
Repayment of loans payable - (13 605)
Net cash from financing activities - (10 355)
Net increase in cash and cash equivalents 37 102 22 181
Cash and cash equivalents at
the beginning of the year 22 788 184
Effect of exchange rate movement
on cash balances (3) 423
Total cash and cash equivalents
at the end of the year 59 887 22 788
NOTES:
1 Presentation of Annual Financial Statements
Trematon Capital Investments Limited (the `company`) is a company domiciled
in South Africa. The consolidated financial statements of the company as at
and for the year ended 31 August 2007 comprise the company and its
subsidiaries (together referred to as the `group`) and the group`s interest
in jointly controlled entities.
The financial statements were authorised for issue by the directors on 7
November 2007.
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the Companies Act of South Africa.
The financial statements have been prepared on the going concern basis using
a combination of the historical cost and fair value basis of accounting.
All significant accounting policies have been consistently applied to all
periods presented and throughout the group.
The consolidated annual financial statements and the company annual
financial statements are stated in Rands, which is the company`s functional
and presentation currency.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities,
income and expenses.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or the period
of the revision and future periods if the revision affects both current and
future periods.
KPMG Inc. has provided an unqualified audit opinion, which is available for
inspection at the company`s registered office, on the annual financial
statements for the year ended 31 August 2007, which have been summarised for
the purpose of this report.
Audited Audited
Year ended Year ended
31 August 31 August
2007 2006
R`000 R`000
2 Headline earnings per share
Headline earnings per share is
calculated as follows :
Profit attributable to equity holders
of the parent 8 115 15 615
Realised profit on available-for-sale
investments, net of minority interest (6 206) (8 894)
Tax effects, net of minority interest 786 1 290
Headline earnings 2 695 8 011
Headline earnings per share (cents) 1,5 4,6
Diluted headline earnings per share (cents) 1,5 4,6
The calculation of headline earnings per share is based on the weighted
average number of 174 872 545 shares in issue during the year
(2006: 173 247 545).
Statement of changes in equity
Total Fair
Share Share share value
capital premium capital reserve
R`000 R`000 R`000 R`000
Balance at 1 September 2005 1 716 198 330 200 046 19 051
Total recognised income - - - (11 956)
Profit for the year - - - -
Total expenses recognised
directly in equity - - - (11 956)
Fair value loss on available-
for -sale investments - - - (4 352)
Fair value gain on available-
for -sale investments realised
through income statement - - - (7 604)
Issue of shares 33 3 217 3 250 -
Total equity at 31 August 2006 1 749 201 547 203 296 7 095
Balance at 1 September 2006 1 749 201 547 203 296 7 095
Tot al recognised income - - - 33 154
Profit for the year - - - -
Total income recognised
directly in equity - - - 33 154
Fair value gain on available-
for -sale investments - - - 28 646
Fair value loss on available-
for -sale investments realised
through income statement - - - 4 508
Acquisition of subsidiary - - - -
Total equity at 31 August 2007 1 749 201 547 203 296 40 249
Accumu-
lated Minority Total
loss Total interest equity
R`000 R`000 R`000 R`000
Balance at 1 September 2005 (120 845) 98 252 - 98 252
Total recognised income 15 615 3 659 - 3 659
Profit for the year 15 615 15 615 - 15 615
Total expenses recognised
directly in equity - (11 956) - (11 956)
Fair value loss on available-
for -sale investments - (4 352) - (4 352)
Fair value gain on available-
for -sale investments realised
through income statement - (7 604) - (7 604)
Issue of shares - 3 250 - 3 250
Total equity at 31 August 2006 (105 230) 105 161 - 105 161
Balance at 1 September 2006 (105 230) 105 161 - 105 161
Total recognised income 8 115 41 269 1 245 42 514
Profit for the year 8 115 8 115 959 9 074
Total income recognised
directly in equity - 33 154 286 33 440
Fair value gain on available-
for -sale investments - 28 646 286 28 932
Fair value loss on available-
for -sale investments realised
through income statement - 4 508 - 4 508
Acquisition of subsidiary - - 5 952 5 952
Total equity at 31 August 2007 (97 115) 146 430 7 197 153 627
12 November 2007
Domicile and registered office:
42 Hans Strijdom Avenue, Foreshore, Cape Town
PO Box 7677, Roggebaai, 8012, South Africa
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Principal banker: Investec Bank Limited
Directors: M Kaplan (Chairman)*, A J Shapiro (CEO), A Groll, AM Louw*,
R Stumpf * * Non-executive
Secretary: S Litten
Sponsor: Sasfin Bank Limited
Auditor: KPMG Inc.
Contact details: Tel: (021) 421-5550
Fax: (021) 421-5551
Date: 12/11/2007 10:47:55 Supplied by www.sharenet.co.za
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