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Abridged Audited Annual Financial Results for the year ended 31 August 2012
Trematon Capital Investments Limited
Reg no: 1997/008691/06
ABRIDGED AUDITED ANNUAL
FINANCIAL RESULTS FOR THE YEAR
ENDED 31 AUGUST 2012
STATEMENT OF FINANCIAL POSITION
Audited Audited
31 August 31 August
2012 2011
Notes R'000 R'000
ASSETS
Non-current assets 159 859 154 109
Property, plant and equipment 6 500 9 523
Investment property 21 098 4 449
Investments 16 120 14 612
Investment in joint ventures 28 985 13 417
Investment in associate entities 85 583 111 470
Deferred tax asset 1 573 638
Current assets 96 680 93 710
Loans receivable 14 181 10 586
Investments 17 175 10 593
Inventories 28 396 28 144
Current tax asset 2 11
Trade and other receivables 4 156 3 546
Cash and cash equivalents 32 770 40 830
Total assets 256 539 247 819
EQUITY AND LIABILITIES
Equity 214 759 199 170
Share capital and share premium 209 259 203 296
Treasury shares 2 (1 239) (1 277)
Fair value reserve 8 156 5 299
Share-based payment reserve 844 -
Accumulated loss (2 261) (18 857)
Total equity attributable to equity holders of the parent 214 759 188 461
Non-controlling interest - 10 709
Liabilities
Non-current liabilities 11 424 4 771
Loan payable 5 795 -
Deferred tax liability 5 629 4 771
Current liabilities 30 356 43 878
Loans payable 884 16 175
Derivative instruments 1 373 -
Tax payable 27 9
Trade and other payables 28 072 27 694
Total liabilities 41 780 48 649
Total equity and liabilities 256 539 247 819
Net asset value per share (cents) 121 cents 108 cents
(based on shares in issue at year-end)
STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
31 August 31 August
2012 2011
Notes R'000 R'000
Revenue 19 702 19 922
Revenue - other from land sales 3 832 6 007
Trading profit 319 252
Investment income 12 256 13 721
Finance costs (958) (3 122)
Reversal of provision for impairment/(provision for impairment) of loan 3 987 (4 250)
Reversal of provision - 5 851
Share based payment expense (844) -
Profit from equity accounted investments (net of tax) 7 419 3 186
Profit before taxation 22 179 15 638
Income tax expense (2 936) (365)
Profit for the year 19 243 15 273
Other comprehensive income
Fair value gain on available-for-sale investments 1 508 2 396
Fair value gain on revaluation of property, plant and equipment 2 302 -
Tax effects on revaluations (953) (294)
Other comprehensive income for the year 2 857 2 102
Total comprehensive income for the year 22 100 17 375
Profit attributable to:
Equity holders of the parent 18 901 14 756
Non-controlling interests 343 517
19 244 15 273
Total comprehensive income attributable to:
Equity holders of the parent 21 758 16 858
Non-controlling interests 343 517
22 101 17 375
Number of shares issued (thousands) 177 108 173 821
Weighted average number of shares (thousands) 174 553 173 940
Earnings per share (cents) 10.8 8.5
Diluted earnings per share (cents) 10.4 8.5
STATEMENT OF CHANGES IN EQUITY
Share Share Total share Treasury Share-Based Fair value Accumulated Total Non-controlling Total
capital premium capital shares payment reserve reserve loss interest equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 September 2010 1 749 201 547 203 296 - - 3 197 (71 725) 134 768 98 738 233 506
Total comprehensive income for year - - - - - 2 102 14 756 16 858 517 17 375
Profit for the year - - - - - - 14 756 14 756 517 15 273
Fair value gain on available-for-sale investments - - - - - 2 396 - 2 396 - 2 396
Tax effects on revaluations - - - - - (294) - (294) - (294)
Net share repurchases - - - (1 277) - - - (1 277) - (1 277)
Dividends paid - - - - - - (2 583) (2 583) - (2 583)
Change in shareholding in subsidiary - - - - - 40 695 40 695 (88 546) (47 851)
Balance at 31 August 2011 1 749 201 547 203 296 (1 277) - 5 299 (18 857) 188 461 10 709 199 170
Balance at 1 September 2011 1 749 201 547 203 296 (1 277) - 5 299 (18 857) 188 461 10 709 199 170
Total comprehensive income for year - - - - - 2 857 18 901 21 758 343 22 101
Profit for the year - - - - - - 18 901 18 901 343 19 244
Fair value gain on available-for-sale investments - - - - - 1 508 - 1 508 - 1 508
Fair value gain on revaluation of property, plant and
equipment - - - - - 2 302 - 2 302 - 2 302
Tax effects on revaluations - - - - - (953) - (953) - (953)
Net share sales - - - 38 - - - 38 - 38
Share based payment - - - 844 - - 844 844
Dividends paid - - - - - - (3 476) (3 476) - (3 476)
Issue of ordinary shares to acquire balance of shares
in subsidiary 32 5 931 5 963 - - - 1 171 7 134 (11 052) (3 918)
Balance at 31 August 2012 1 781 207 478 209 259 (1 239) 844 8 156 (2 261) 214 759 - 214 759
Note 2
STATEMENT OF CASH FLOW
Audited Audited
Year ended Year ended
31 August 31 August
2012 2011
R'000 R'000
Cash flows from operating activities
Cash utilised in operations (8 261) (4 077)
Finance income 3 322 10 215
Dividends received 6 016 3 505
Dividends received from associate 4 445 7 140
Finance costs (958) (3 122)
Dividends paid (3 476) (2 583)
Taxation paid (3 938) (2 827)
Net cash (outflow)/inflow from operating activities (2 850) 8 251
Cash flows from investing activities
Acquisition of property, plant and equipment (3 599) (1 856)
Acquisition of and addition to investment property (8 425) (2 664)
Proceeds on disposal of property, plant and equipment - 52
Decrease in loans receivable 392 11 240
Proceeds on sale of associate 40 672 33 993
Loans advanced to jointly controlled entities and associates (14 113) (12 469)
Acquisition of held-for-trading and available-for-sale investments (23 791) (26 258)
Proceeds on disposal of investments 15 991 12 479
Net cash inflow from investing activities 7 127 14 517
Cash flows from financing activities
Change in shareholding of subsidiary (2 841) (28 761)
Decrease in borrowings (9 496) (8 650)
Decrease in creditors - (182)
Net cash outflow from financing activities (12 337) (37 593)
Net decrease in cash and cash equivalents (8 060) (14 825)
Cash and cash equivalents at the beginning of the year 40 830 55 655
Total cash and cash equivalents at the end of the year 32 770 40 830
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 2012 comprise the company and its subsidiaries
(together referred to as the 'group') and the group's interest in associates and jointly controlled entities.
The financial statements were authorised for issue by the directors on 14 November 2012.
The annual financial results have been prepared in accordance with the framework concepts and the measurement and
recognition requirements of IFRS and the AC 500 standards as issued by the Accounting Practices Board or its successor and
contain the information required by IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and the Companies Act.
The same IFRS-compliant accounting policies and methods of computation have been followed in the preparation of these
annual financial results as compared with the most recent annual financial statements.
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 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.
There have been no changes to the board of directors during the year under review.
Mazars has provided an unqualified audit opinion, which is available for inspection at the company's registered office.
Audited Audited
Year ended Year ended
31 August 31 August
2012 2011
2 Treasury shares
Number of shares held at year-end 987 771 1 051 129
During the year 50,096 treasury shares were purchased at a cost of 200 cents per share and 113 454 treasury shares were
disposed of at a 180 cents per share.
3 Headline earnings per share
Audited Audited
Year ended Year ended
31 August 31 August
2012 2011
R'000 R'000 R'000 R'000
Gross Net Gross Net
Headline earnings per share is calculated as follows:
Profit attributable to equity holders of the parent 18 901 14 756
Realised profit on sale of associate (10 349) (7 072) (9 764) (9 344)
Headline earnings 11 829 5 412
Headline earnings per share (cents) 6.8 3.1
Diluted headline earnings per share (cents) 6.5 3.1
The calculation of headline earnings per share is based on the
weighted average number of 174 552 504 shares in issue during
the year (2011: 173,940,185).
The calculation of diluted headline earnings per share is based on the
diluted weighted average number of 181 588 023 shares in issue during
the year (2011: 173,940,185).
4 Segmental information R'000
Gaming Property investments Unallocated Eliminations Total
2012
Revenue 6 015 13 686 1 - 19 702
Intersegment revenue - 8 603 - (8 603) -
Net income/(loss) before tax 15 725 11 247 (4 793) - 22 179
Total assets 116 203 137 660 2 675 - 256 538
2011
Revenue 390 16 417 3 115 - 19 922
Intersegment revenue - 6 660 - (6 660) -
Net income before tax 7 805 3 117 4 716 - 15 638
Total assets 99 636 140 555 7 628 - 247 819
5 Dividends
Subsequent to year-end the board of directors declared a dividend of 2.5 cents per share.
The directors have reasonably concluded that the company will satisfy the solvency and liquidity test immediately after the dividend distribution.
The final gross dividend declared of 2.5 cents per share will be paid from income reserves.
Dividend withholding tax ("DWT") rate is 15%. The company will utilise secondary tax on companies ("STC") credits.
The STC credits utilised as part of this dividend declared amount to R4.5 million, being 2.5 cents per share and consequently no
DWT is payable by shareholders who are normally not exempt from DWT. The net amount payable to shareholders is R4.5 million,
being 2.5 cents per share based on the current number of 178 095 823 shares in issue.
STC credits of R32.5 million, being 18.25 cents per share will remain available to be set off against future dividends.
The income tax reference number of Trematon Capital Investments Limited is 9340/323/84/0.
Last date to trade: Friday, 1 February 2013
Ex-date: Monday, 4 February 2013
Record date: Friday, 8 February 2013
Payment date: Monday, 11 February 2013
Share certificates may not be dematerialised or rematerialised between Monday, 4 February 2013 and
Friday, 8 February 2013, both days inclusive.
Trematon Joint Chairman and Chief Executive Officers Report
This year, for the first time, there is a separate report by the Chief Financial
Officer in the Annual Report, please refer to this report for a detailed review of
the financial results.
The 2012 financial year represents the 7th year of the company under the current
management team. Over this period the group has grown from a shell holding
only one listed asset to a more substantial group with diversified interests which
are discussed below.
Club Mykonos Langebaan Limited ("CML")
This is the single largest investment in the group and comprises roughly 60% of
the reported net asset value. It consists of several commercial components.
Mykonos Casino
The Trematon Group owns 30% of the Mykonos Casino which is an integral part
of the resort and two Trematon executives are represented on the casino board.
This is the largest and most consistent profit generator at Club Mykonos at
present. The casino is managed by Tsogo Sun Holdings Limited.
The Marina and Boatyard
The very popular Club Mykonos Marina has 170 berths of which 51 were built
during the current financial year. The Marina caters to all the needs of boat
owners from small craft to large catamarans and yachts and offers secure
berthing and boat maintenance. Pleasure cruises and yacht training are also
available.
The most recent development at the resort is "The Boatyard at Club Mykonos".
When completed it will comprise 360 boat and general storage garages offering a
full service facility to boating and water sports enthusiasts. Phase 1, consisting
of 135 garages is now complete and all the large garages are fully let,
construction of more large garages has commenced and will continue as dictated
by demand.
Restaurants and conference facilities
The restaurant facilities, leisure facilities and kitchens have all been extensively
upgraded during 2012. All restaurant and conference premises are leased to
operators of proven competency and performance is monitored on a consistent
basis.
The restaurant at the casino was completely refurbished in the current financial
year and the kitchen and restaurants on the marina terrace and the pool deck are
in the final phases of a comprehensive makeover in preparation for the
2012/2013 holiday season. Visitor numbers have been extremely encouraging
and the resort has sufficient capacity to cater for the high numbers of seasonal
visitors.
The Athene Conference Centre has the capacity to cope with both small groups
and large conferences of up to 500 delegates and is also undergoing renovations
which are expected to be completed during the 2013 financial year.
Other rental properties and developments
CML also owns several kalivas on the resort which are let as short-stay holiday
apartments. Additional commercial properties owned by the company are let to
third parties for various commercial purposes.
Aegean Heights is a high value development comprising vacant seafront plots
which are sold to individual buyers. Several new homes are being constructed
and the Aegean Heights community is a valuable and growing asset to the resort.
The Club Mykonos Homeowners Association manages the day-to-day resort
operations and has been instrumental in upgrading a total of 139 rooms to a high
standard over the past three years as well as the establishment of a first class spa
facility and a new childrens' entertainment area.
There are no new residential developments currently selling although there is a
large amount of prime land available for such developments which will be
launched when the market has become more robust.
Arbitrage Property Fund ("Arbitrage")
Arbitrage is a 50:50 joint venture with our commercial property partners.
Arbitrage is a loan stock company which invests in industrial, retail and
commercial properties which have good income yields and a high potential for
capital growth in the medium term.
The current portfolio consists of R165 million worth of properties in Gauteng,
Northern Province and the Western Cape. The portfolio is expected to grow
significantly in the next financial year. Deal flow is strong and purchases are
made on a very selective basis.
Resi Investment Trust ("Resi")
Resi is a 50:50 joint venture with our residential property partners, RBK
Property Holdings. Resi purchases high value residential properties with both a
good income yield and a high potential for capital appreciation. The deal
pipeline is currently strong and this portfolio is expected to grow appreciably in
the next financial year subject to stringent return criteria.
Other investments
Trematon owns an indirect stake of 7.3% in Mazor Group Limited (via
Cloudberry Investments 18 (Pty) Limited and a small direct and indirect
minority stake in Grand Parade Investments Limited.
The group trades actively in listed and unlisted shares and other instruments
from time to time, all of which are carried at market value in the financial
statements.
Stalagmite Property Investments (Pty) Limited ("Stalagmite") is a 50:50 joint
venture with Gateway Property Investments (Pty) Limited in the Strand,
Western Cape, which is currently not very active. The company owns land
which is well located and the venture has no borrowings.
Prospects and strategy
The group is in a strong financial position and has established a good reputation
for prudent but profitable investment over the past seven years. Several of our
investments take the form of joint ventures with capable and trusted partners
who share in the fruits of the ventures and are an extremely valuable part of our
processes. New ventures are likely to be pursued on a similar basis.
Our staff complement has grown to the point where the group is capable of
tackling more ambitious investments and the group is always on the lookout for
new investment opportunities. Currently the long-term portfolio consists mainly
of property, leisure and gaming assets but other areas are also being investigated.
The annuity component of the group's earnings is higher than it has been in the
past due to the increase in the investment in Club Mykonos and the various
property related assets but profits may still be volatile if large investments are
made or realised during any financial period.
Dividends
The board has declared a dividend of 2.5cents per share which is an increase of 25%
on the prior year.
Monty Kaplan Arnold Shapiro
Chairman Chief Executive Officer
Chief Financial Officers Report
Highlights
- Earnings per share increased by 27%
- Headline earnings per share increased by 119%
- Net asset value per share increased by 12%
- Final ordinary dividend of 2.5 cents per share, which is an increase of 25%
Overview
The group made a profit for the year of R18.9 million (2011: R14.8 million) which translates
into earnings per share of 10.8 cents (2011: 8.5 cents). The main contributions to the
increased profit are the profit realised on the sale of Trematon's interest in the Boulevard
Park Trust ("BPT") of R10.3 million and an increase in equity accounted earnings from
associates and joint ventures.
Trading profit increased despite a decrease in land sales at Club Mykonos due to more
efficient use of group cash resources and profitable short-term trading investments. The
group also managed to reduce its operating expenses.
Investment income fell slightly with the dividend component increasing relative to interest
earned.
Investment highlights
The main changes to investments in the current year were:
- Increase in the investment in Club Mykonos Langebaan Limited from 92.2% to
100%.
- Sale of the 37.5% interest in the Boulevard Park Trust.
- New investment in Resi Investment Trust (50% interest) which is a property trust
with a focus on residential properties.
Net asset value
The group's net asset value increased by 13 cents per share to 121 cents per share (2011:
108 cents per share).
The major reasons for the increase were the profit realised on the sale of Trematon's
interest in the Boulevard Park Trust, the increase in value of the groups investments in
listed and unlisted investments and, to a small extent, the increase in value of investment
properties.
During the year, Trematon issued convertible debentures in respect of the Trematon Share
Incentive Scheme to its executive directors and selected employees. The convertible
debentures are convertible into Trematon shares when exercised. As a result of IFRS 2:
Share-based payments, a charge of R0.8 million is recognised in profit or loss.
The group reduced its external short-term debt to R0.9 million and increased its medium to
long-term external debt to R5.8 million. This increase in medium-term debt was used to
construct the boat storage facility at Club Mykonos.
At year-end the group had net cash balances of R32.8 million which places it in a healthy
position to take advantage of any investment opportunities that may arise.
Individual investments
SUBSIDIARIES
Club Mykonos Langebaan Limited
During the year Trematon concluded, through its 100% held subsidiary, Tremgrowth (Pty)
Limited, a scheme of arrangement that resulted in Trematon purchasing the remaining
7.8% of CML's shares resulting in a 100% holding in CML. The participants could choose
to either receive cash or Trematon shares as consideration for their CML shares.
Trematon issued 3.2 million ordinary shares to the participants who elected the share
consideration.
CML's profit for the year improved slightly on the prior years results. This growth was
achieved even though there was a decrease in sales of land at the resort. The decrease in
land sales was offset by an increase in rental and resort commercial revenue, mainly due
to the additional jetties constructed at the marina during the year as well as the boat yard
and storage facility.
The casino continues to generate consistent profits for the group. This year it contributed
R8.0 million, which is a slight improvement over last year's contribution.
During the year Trematon entered into an agreement whereby the company has granted a
call option in respect of 10% of its shareholding in CML at a price equivalent to its cost
plus adjusting for interest. If exercised, the option holder may put the shares back to
Trematon. This transaction has resulted in an amount of R1.4 million being disclosed as a
derivative instrument in current liabilities and a fair value adjustment in profit or loss.
JOINT VENTURES
Stalagmite Property Investments (Pty) Limited
There has been no activity in the investment in Stalagmite. The company owns an
industrial park situated adjacent to the route of the proposed N2 highway in the Western
Cape. There is no external debt in the company. The company contributed an immaterial
loss to the equity accounted investments of the group.
Arbitrage Property Fund (Pty) Limited
This has been the first full year of trading for Arbitrage. It currently holds R165 million
worth of investment properties in the commercial, retail and industrial sectors. These
properties have generated good yields during the year and have contributed a net R1.3
million to Trematon's equity accounted earnings. Trematon owns 50% of Arbitrage.
Resi Investment Trust
Resi is a new joint venture that focuses on residential developments. The venture has
resulted in an equity accounted loss of R1.3 million for the year. This loss is mainly due to
the interest expense on the initial loans to acquire and complete partially completed
developments. At year-end a large portion of the loan was repaid and the venture is
expected to show positive returns in future. The venture currently holds properties to the
value of R40.5 million. Trematon holds a 50% interest in Resi.
ASSOCIATES
Boulevard Park Trust ('BPT')
During the year Trematon sold its 37.5% interest in BPT for a consideration of R40.8
million which included the settlement of all outstanding loan accounts. This resulted in a
group profit of R10.3 million.
OTHER INVESTMENTS
Cloudberry Investments 18 (Pty) Limited
The groups investment in Cloudberry increased by R4.0 million which is reflected as a
reversal of the provision for impairment previously raised against the loans to Cloudberry.
The value of the investment in Cloudberry is directly linked to its net asset value which has
improved during the year as a result of an increase in the value of the investments in listed
shares. The company owns shares in Mazor Group Limited and Grand Parade Investments Limited.
Other
The group maintains investments in various JSE listed companies for both long-term
investing and short-term trading opportunities. These investments contributed R6.0 million
in dividend revenue for the year. At year-end the market value of these investments was
R33.3 million.
Arthur Winkler
Chief Financial Officer
Domicile and registered office
30 Hudson Street, Cape Town
PO Box 7677, Roggebaai, 8012, South Africa
Transfer secretaries
Link Market Services South Africa (Pty) Ltd
19 Ameshoff Street, Braamfontein
Directors
M Kaplan (Chairman)#*, AJ Shapiro (Chief Executive Officer),
AL Winkler (Chief Financial Officer), JP Fisher#*
A Groll, AM Louw*#, R Stumpf*
* Non-executive
# Independent
Secretary
SA Litten
Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Preparer
The group financial results have been prepared
under the supervision of
AL Winkler (Chief Financial Officer) CA(SA)
Date Published
29 November 2012
The complete annual report is available on our website from 30 November 2012
website: www.trematon.co.za
Auditor
Mazars
Contact details
Tel: (021) 421 5550
Fax: (021) 421 5551
Date: 29/11/2012 10:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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