Wrap Text
TMT - Trematon` - Unaudited Interim Results For The Six Months Ended 28
February 2009
TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/008691/06)
Capital Investments Limited
Share code: TMT
ISIN: ZAE000013991
(`Trematon` or `the company`)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 February 2009
Directors` review
The primary aim of the group is to generate superior risk-adjusted long-term
returns for its shareholders. Management considers that the primary yardstick
for measurement of this objective should be the net asset value per share.
The net asset value reported for the period ended 28 February 2009 is 73 cents
per share which is a decline of 17% since the last financial year-end. The
past year has clearly not been a successful one when measured by this
yardstick.
Trading losses of R7.8 million were incurred during the period of which about
50% were realised and the balance was the result of mark-to-market adjustments
and operating losses.
The loan impairment of R17.3 million was the result of the mark-to-market of
the company`s indirect investment in Mazor Group Ltd (`Mazor`) which was based
on the Mazor share price of 120 cents per share at the reporting date. Since
the reporting date the Mazor price has increased to 190 cents which would
represent a reversal of the impairment of R6.2 million.
The net asset value does reflect a number of subjective assumptions as to the
realisable value of our unlisted investments but management believes that it
is a reasonably prudent estimate of the true value of the business.
Commentary on individual investments
Club Mykonos Langebaan Ltd (`CML`)
The group owns just over 34% of CML which has been consolidated as a
subsidiary since the last financial year-end. In the comparable period CML was
not consolidated but was treated as an investment.
CML`s operations are currently not profitable and it is expected that CML will
incur a loss for its financial year ending June 2009. Head office costs have
been reduced by roughly 50% in the current period and the operational losses
(mainly related to restaurants and related businesses) have been contained at
manageable levels. CML`s major asset is significant holdings of residential
stands and zoned coastal land which are difficult to value in the current
market. The land is situated in prime areas but the market for these
properties is currently poor.
CML owns approximately 30% of the Mykonos Casino which has continued to trade
profitably. The casino is controlled and managed by Gold Reef Resorts Ltd and
shareholders are referred to the results of Gold Reef Resorts Ltd for further
information on this investment.
Faircare Trust (Formerly the RV Holdings Trust)
The Faircare Trust, of which approximately 35% is effectively attributable to
Trematon, is responsible for the management and operation of upmarket
retirement villages based mainly in the Western Cape. The villages are all
well established and highly regarded and operate under a variety of ownership
structures which are tailored to the needs of their customers. All of the
villages comprise residential units, assisted living suites, frail care and
catering facilities. The villages include Cle du Cap (situated in Tokai),
Noordhoek Manor, Onrus Manor, Heritage Manor and Bridgewater Manor (both
situated in Somerset West).
This business is very well managed and has performed in line with expectations
thus far. We expect that it will generate very good long-term returns for the
group.
Grand Parade Investments Ltd (`GPI`)
Trematon has a minority interest in GPI which is accounted for as an
investment. Shareholders are referred to the reviewed interim results of GPI
which were published on SENS on 9 March 2009.The company is still very
profitable although industry statistics indicate gaming revenues and earnings
are currently under pressure in the Western Cape.
Mazor Group Ltd (`Mazor`)
Trematon owns 7.2% of Mazor indirectly via a 49% holding in Cloudberry
Investments 18 (Pty) Ltd. Cloudberry is controlled by a BEE entity and is
partially funded via a loan from Trematon.
The loan has been impaired in the accounts to the extent that the market value
of the investment has declined below the value of the outstanding loans.
Mazor produced excellent operating results in the most recent reporting
period. The company is in a very sound financial position and is highly
profitable although the share price has declined since listing in sympathy
with market circumstances.
Shareholders are referred to the final results of Mazor which were published
on SENS on 20 May 2009.
Property Investments
Ingenuity Property Investments Ltd (formerly SA REIT Ltd)
Shareholders are referred to the SENS announcement reporting Ingenuity`s
financial results for the six-month period to 28 February 2009 which were
published on 15 May 2009.
Trematon owns 21.1% of Ingenuity which has a high quality portfolio of
investment and development properties situated mainly in and around Cape Town.
The underlying assets are sound and well managed and Ingenuity`s executive
team is firmly focused on adding value for their shareholders.
Stalagmite (Pty) Ltd
Stalagmite is a development comprising prime industrial land in Strand at the
Broadway Industrial Park adjacent to the proposed route of the new N2 highway.
Stalagmite is 50% held and is accounted for as a joint venture.
The partners in the joint venture are Gateway Property Developers (Pty) Ltd
who have managed the project very successfully.
Stalagmite has no remaining borrowings and has retained prime land holdings
for realisation over the next twelve to eighteen months.
Boulevard Park
Trematon owns an effective 37.5% interest in Boulevard Park which is a premier
grade development located adjacent to the N2 highway on the Cape Town CBD
periphery. The development comprises seven office towers comprising
38 000 square metres of office space and 1 800 parking bays. Five of the seven
buildings have been sold and letting interest has been strong.
Wembley Square II
Trematon owns an effective 40% interest in Wembley Square II which is located
opposite to Wembley Square and is a joint venture with Faircape which was the
original developer of Wembley Square. The site is in a highly desirable
development node and plans are under way to maximise the value of the
investment.
Prospects
The company`s portfolio of investments has not changed materially since the
previous financial year-end. The primary focus of management is on ensuring
that the value of our current investments is maximised. Potential new
investments have been identified. It is not possible to predict the future net
asset value with great certainty but if economic conditions do not deteriorate
it is possible that the published net asset value will represent a low point
in the current cycle.
MONTY KAPLAN ARNOLD SHAPIRO
Chairman Chief Executive Officer
Cape Town
21 May 2009
BALANCE SHEET
Unaudited Audited
28/29 February 31 August
2009 2008 2008
R`000 R`000 R`000
ASSETS
Non-current assets 271 011 183 292 272 862
Property, plant and equipment 12 542 10 12 506
Investments 254 049 182 834 259 234
Deferred tax asset 4 420 448 1 122
Current assets 84 055 58 468 94 358
Loans receivable 2 415 47 920 9 073
Trade and other receivables 12 430 149 11 369
Investments 10 467 8 489 6 146
Inventory 28 232 - 31 938
Tax receivable 1 293 154 1 292
Cash and cash equivalents 29 218 1 756 34 540
Total assets 355 066 241 760 367 220
EQUITY AND LIABILITIES
Equity 225 653 163 033 252 092
Share capital and share premium 203 296 203 296 203 296
Fair value reserve 372 40 627 13 409
Accumulated loss (75 182) (80 890) (62 697)
Total equity attributable to equity
holders of the parent 128 486 163 033 154 008
Minority interest 97 167 - 98 084
Non-current liabilities - 6 614 4 898
Deferred tax liability - 6 614 4 898
Current liabilities 129 413 72 113 110 230
Loans payable 113 562 70 195 92 576
Secured debentures 7 376 - 9 681
Tax payable 24 927 22
Trade and other payables 8 403 947 7 902
Bank overdraft 48 44 49
Total equity and liabilities 355 066 241 760 367 220
Net asset value per share (cents) 73 93 88
INCOME STATEMENT
Unaudited Audited
Six months ended Year ended
28/29 February 31 August
2009 2008 2008
Notes R`000 R`000 R`000
Revenue 16 794 21 548 19 300
Trading (loss)/profit (7 841) 15 590 1 362
Investment income 9 646 3 268 9 079
Finance costs (7 023) (1 643) (8 060)
Recycling of fair value reserve
to profit - - 15 715
Profit on change in shareholding 540 - 12 610
Impairment of loan (17 278) - (4 262)
Profit from equity accounted
investment (net of tax) 2 509 93 7 074
(Loss)/profit before taxation (19 447) 17 308 33 518
Taxation 6 059 (661) 1 323
(Loss)/profit for the period/year (13 388) 16 647 34 841
Attributable to:
Equity holders of the parent (12 485) 16 225 34 419
Minority interest (903) 422 422
(13 388) 16 647 34 841
Number of shares issued (thousands) 174 873 174 873 174 873
Weighted average number of shares
(thousands) 174 873 174 873 174 873
Earnings per share (cents) (7.1) 9.3 19.7
Headline earnings per share (cents) 2 (0.4) 0.9 5.5
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 2007 1 749 201 547 203 296 40 249
Total recognised income - - - (26 840)
Profit for the year - - - -
Total income recognised
directly in equity - - - (26 840)
Change in rate recognised in
equity - - - 235
Fair value loss on
available-for-sale investments - - - (11 516)
Fair value gain on
available-for-sale investment - - - 8 479
Recycling of fair value
reserve to profit - - - (13 514)
Dilution of subsidiary - - - (9 623)
Fair value reserve realised on
sale of investments - - - (901)
Acquisition of subsidiary - - - -
Total equity at 31 August 2008 1 749 201 547 203 296 13 409
Balance at 1 September 2008 1 749 201 547 203 296 13 409
Total recognised income - - - (13 037)
Loss for the year - - - -
Total income recognised
directly in equity - - - (13 037)
Fair value loss on
available-for-sale investments - - - (12 765)
Change in shareholding in
subsidiary - - - -
Fair value reserve realised on
sale of investments - - - (272)
Total equity at
28 February 2009 1 749 201 547 203 296 372
Accumu-
lated Minority Total
loss Total interest equity
R`000 R`000 R`000 R`000
Balance at 1 September 2007 (97 115) 146 430 7 197 153 627
Total recognised income 34 418 7 578 (7 197) 381
Profit for the year 34 418 34 418 422 34 840
Total income recognised
directly in equity - (26 840) (7 619) (34 459)
Change in rate
recognised in equity - 235 - 235
Fair value loss on
available-for-sale
investments - (11 516) - (11 516)
Fair value gain on
available-for-sale
investment - 8 479 - 8 479
Recycling of fair value
reserve to profit - (13 514) (13 514)
Dilution of subsidiary - (9 623) (7 619) (17 242)
Fair value reserve realised
on sale of investments - (901) - (901)
Acquisition of subsidiary - - 98 084 98 084
Total equity at
31 August 2008 (62 697) 154 008 98 084 252 092
Balance at
1 September 2008 (62 697) 154 008 98 084 252 092
Total recognised income (12 485) (25 522) (917) (26 439)
Loss for the year (12 485) (12 485) (903) (13 388)
Total income recognised
directly in equity - (13 037) (14) (13 051)
Fair value loss on
available-for-sale investments - (12 765) - (12 765)
Change in shareholding
in subsidiary - - (14) (14)
Fair value reserve realised
on sale of investments - (272) - (272)
Total equity at
28 February 2009 (75 182) 128 486 97 167 225 653
CASH FLOW STATEMENT
Unaudited Audited
Six months ended Year ended
28/29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Cash flows from operating activities
Cash (used in)/generated by operations (1 733) 3 577 2 243
Interest received 8 377 2 156 7 966
Dividends received 1 269 1 112 1 113
Finance costs (7 023) (1 643) (8 060)
Tax paid (13) (249) (1 387)
Net cash from operating activities 877 4 953 1 875
Cash flows from investing activities
Acquisition of property,
plant and equipment (44) - (31)
Proceeds on disposal of property,
plant and equipment 2 - -
Dilution of subsidiary - - (12 681)
Acquisition of subsidiary,
net of cash acquired - - 33 041
Dilution of shareholding in
subsidiary, net of cash - (23 929) -
Increase in loans receivable - (44 285) (87 569)
Decrease in loan in dilution
of subsidiary - - 1 509
Loan repaid by/(advanced to)
joint venture 5 789 (897) 1 997
Loans advanced to associates (13 197) - -
Acquisition of investments (8 075) (70 075) (65 939)
Proceeds from sale of investments 1 267 5 864 9 831
Net cash from investing activities (14 258) (133 322) (119 842)
Cash flows from financing activities
Decrease in debentures (2 305) - -
Increase in borrowings 10 366 70 196 92 576
Net cash from financing activities 8 061 70 196 92 576
Net decrease in cash and
cash equivalents (5 320) (58 173) (25 391)
Cash and cash equivalents at the
beginning of year 34 490 59 887 59 887
Effect of exchange rate movement
on cash balances - (2) (6)
Total cash and cash equivalents at the
end of year 29 170 1 712 34 490
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 for the
period ending 28 February 2009 comprise the company and its subsidiaries
(together referred to as the `group`) and the group`s interest in jointly
controlled entities.
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards (`IFRS`), IAS 34 - Interim
Reporting,the Listings Requirements of the JSE Ltd and the South African
Companies Act.The interim 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 interim financial statements are stated in Rands, which is
the company`s functional and presentation currency.
The preparation of interim 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
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. The interim financial statements have not been reviewed or
audited by
KPMG Inc.
Unaudited Audited
Six months ended Year ended
28/29 February 31 August
2009 2008 2008
R`000 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 (12 485) 16 225 34 419
Realised profit on available-for-sale
investments, net of minority interest (60) (2 282) (1 985)
Realised gain on change in shareholding (540) (12 609) (12 610)
Fair value realised on investment - - (15 715)
Impairment of loan 17 278 - 4 262
Tax effects, net of minority interest (4 829) 319 1 285
Headline earnings (636) 1 653 9 656
Headline earnings per share (cents) (0.4) 0.9 5.5
Diluted headline earnings per share (0.4) 0.9 5.5
The calculation of headline earnings per share is based on the weighted
average number of 174 872 545 shares in issue during the year (2008: 174 872
545).
Domicile and registered office:
2nd Floor, The Hudson, 30 Hudson Street Cape Town, 8001
PO Box 7677, Roggebaai, 8012, South Africa
Contact details: Tel: 021 421 5550; Fax: 021 421 5551
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Directors: M Kaplan (Chairman)*, A J Shapiro (CEO), A Groll, A M Louw*,
R Stumpf* * Non-executive
Secretary: S Litten
Sponsor: Sasfin Capital (A division of Sasfin Bank Limited)
Auditor: KPMG Inc.
Date: 21/05/2009 15:35:02 Supplied by www.sharenet.co.za
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