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TREMATON CAPITAL INVESTMENTS LIMITED - Preliminary results for the year ended 31 August 2016

Release Date: 14/11/2016 08:00
Code(s): TMT     PDF:  
Wrap Text
Preliminary results for the year ended 31 August 2016

TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/008691/06)
JSE code: TMT
ISIN: ZAE000013991
("Trematon" or "the company" or "the group")


PRELIMINARY CONDENSED CONSOLIDATED RESULTS 
FOR THE YEAR ENDED 31 AUGUST 2016


CONDENSED STATEMENT OF FINANCIAL POSITION
                                                               Reviewed       Audited
                                                              31 August     31 August
                                                                   2016          2015
                                                    Notes         R'000         R'000
ASSETS                                                  
Non-current assets                                            1 024 092       880 312 
Property, plant and equipment                                    37 359         7 317 
Investment properties                                           822 225       725 570 
Investments in joint ventures                                    37 617        28 034 
Investments in associate entities                                99 043        96 692 
Loans receivable                                                 22 903        20 572 
Deferred tax asset                                                4 945         2 127 
Current assets                                                  166 572       194 722
Loans receivable                                                 10 377         8 521 
Investments                                                      13 905        39 373 
Inventories                                                     101 213        82 274 
Current tax asset                                                     2             2 
Trade and other receivables                                       8 515         9 164 
Cash and cash equivalents                                        32 560        55 388 
Total assets                                                  1 190 664     1 075 034 
                                                  
EQUITY AND LIABILITIES                                                  
Equity                                                          601 222       542 528 
Share capital and share premium                                 322 706       329 076 
Treasury shares                                         2        (2 559)       (2 559)
Fair value reserve                                               12 389        11 322 
Share-based payment reserve                                       8 999         6 657 
Accumulated profit                                              214 655       165 151 
Total equity attributable to equity holders of the parent       556 190       509 647 
Non-controlling interest                                         45 032        32 881 
Liabilities                                                  
Non-current liabilities                                         492 753       478 236 
Loans payable                                                   444 179       454 245 
Deferred tax liability                                           48 574        23 991 
Current liabilities                                              96 689        54 270 
Loans payable                                                    61 145        24 968 
Current tax liabilities                                           1 916           111 
Trade and other payables                                         33 628        29 191 
Total liabilities                                               589 442       532 506 
Total equity and liabilities                                  1 190 664     1 075 034 
                                                  
Net asset value per share (based on shares in 
issue at year-end) (cents)                                          255           235


CONDENSED STATEMENT OF COMPREHENSIVE INCOME                                        
                                                               Reviewed       Audited 
                                                             Year ended    Year ended
                                                              31 August     31 August
                                                                   2016          2015
                                                                  R'000         R'000
Revenue                                                         132 644       103 116 
Realised profit on held-for-trading investments                   3 331         5 847 
Realised profit on sale of non-current assets                        60           128 
Total realised profit                                             3 391         5 975 
Fair value adjustment on held-for-trading investments            (8 690)          417 
Fair value adjustment on investment properties                   68 330        77 110 
Deemed profit on transfer of inventory to investment property         -        17 389 
Reversal of impairment/(impairment) of loan                       1 462        (4 535)
Total profit from fair value adjustments                         61 102        90 381 
Employee benefits                                               (23 476)      (15 618)
Cost of property and land sold                                  (10 062)      (35 742)
Other operating expenses                                        (52 854)      (33 918)
Operating profit                                                110 745       114 194 
Finance costs                                                   (47 580)      (26 792)
Profit from equity accounted investment (net of tax)             20 825        31 216 
Profit before income tax                                         83 990       118 618 
Income tax                                                      (22 335)      (10 580)
Profit for the year                                              61 655       108 038 
Other comprehensive income                                        
Items that will not subsequently be reclassified to profit/(loss):
Fair value gain on revaluation of property, plant and equipment   1 942        11 779 
Tax effects of fair value adjustments                              (876)       (2 140)
Other comprehensive income for the year                           1 066         9 639 
Total comprehensive income for the year                          62 721       117 677 
Profit attributable to:                                        
Equity holders of the parent                                     49 504        95 235 
Non-controlling interests                                        12 151        12 802 
                                                                 61 655       108 037 
                                        
Total comprehensive income attributable to:                                        
Equity holders of the parent                                     50 570       104 875 
Non-controlling interests                                        12 151        12 802 
                                                                 62 721       117 677 
                                        
Basic earnings per share                                     22.8 cents    48.4 cents
Diluted earnings per share                                   21.1 cents    44.6 cents


CONDENSED STATEMENT OF CHANGES IN EQUITY       
                                                                               Share-
                                                            Total               based
                                        Share     Share     share  Treasury   payment
                                      capital   premium   capital    shares   reserve
                                        R'000     R'000     R'000     R'000     R'000
Balance at 1 September 2014             1 781   207 478   209 259    (2 559)    4 188
Total comprehensive income for the year     -         -         -         -         - 
Profit for the year                         -         -         -         -         -
Fair value gain on revaluation of 
  property, plant and equipment             -         -         -         -         - 
Tax effects on revaluations                 -         -         -         -         - 
Share-based payment expense                 -         -         -         -     2 557 
Settlement of share-based payment           -         -         -         -       (88) 
Ordinary shares issued                    403   119 414   119 817         -         - 
Dividends paid (Note 6)                     -         -         -         -         - 
Change in shareholding                      -         -         -         -         - 
Balance at 31 August 2015               2 184   326 892   329 076    (2 559)    6 657 

Balance at 1 September 2015             2 184   326 892   329 076    (2 559)    6 657
Total comprehensive income for the year     -         -         -         -         -
Profit for the year                         -         -         -         -         - 
Fair value gain on revaluation of 
  property, plant and equipment             -         -         -         -         - 
Tax effects on revaluations                 -         -         -         -         - 
Share-based payment expense                 -         -         -         -     2 737 
Settlement of share-based payment           -         -         -         -      (395) 
Ordinary shares issued                     11     1 807     1 818         -         - 
Capital distribution                        -    (8 188)   (8 188)        -         -
Balance at 31 August 2016               2 195   320 511   322 706    (2 559)    8 999 
                                                                     Note 2

                                                Accumu-
                                         Fair     lated            Non-con-
                                        value    profit/           trolling     Total
                                      reserve     (loss)    Total  interest    equity
                                        R'000     R'000     R'000     R'000     R'000
Balance at 1 September 2014             1 683    82 346   294 917    27 403   322 320 
Total comprehensive income for the year 9 639    95 235   104 874    12 802   117 676 
Profit for the year                         -    95 235    95 235    12 802   108 037 
Fair value gain on revaluation of 
  property, plant and equipment        11 779         -    11 779         -    11 779 
Tax effects on revaluations            (2 140)        -    (2 140)        -    (2 140)
Share-based payment expense                 -         -     2 557         -     2 557 
Settlement of share-based payment           -        88         -         -         - 
Ordinary shares issued                      -             119 817         -   119 817 
Dividends paid (Note 6)                     -    (8 816)   (8 816)        -    (8 816)
Change in shareholding                      -    (3 702)   (3 702)   (7 324)  (11 026)
Balance at 31 August 2015              11 322   165 151   509 647    32 881   542 528 

Balance at 1 September 2015            11 322   165 151   509 647    32 881   542 528 
Total comprehensive income for the year 1 067    49 504    50 571    12 151    62 722 
Profit for the year                         -    49 504    49 504    12 151    61 655 
Fair value gain on revaluation of 
  property, plant and equipment         1 943         -     1 943         -     1 943 
Tax effects on revaluations              (876)        -      (876)        -      (876)
Share-based payment expense                 -         -     2 737               2 737 
Settlement of share-based payment           -         -      (395)        -     (395)
Ordinary shares issued                      -         -     1 818         -     1 818 
Capital distribution                        -         -    (8 188)        -    (8 188)
Balance at 31 August 2016              12 389   214 655   556 190    45 032   601 222 


CONDENSED STATEMENT OF CASH FLOWS                              
                                                               Reviewed       Audited
                                                             Year ended    Year ended
                                                              31 August     31 August
                                                                   2016          2015
                                                                  R'000         R'000
Cash flows from operating activities
Cash generated from operations                                   26 930        36 461 
Finance income                                                    2 041         4 760 
Dividends received                                                  435           257 
Dividends received from associate                                 8 891         7 409 
Finance costs                                                   (47 580)      (26 792)
Dividends paid                                                        -        (8 816)
Taxation (paid)/received                                            (36)           16 
Net cash (outflow)/inflow from operating activities              (9 319)       13 295 
                              
Cash flows from investing activities                              
Acquisition of property, plant and equipment                    (19 948)       (6 269)
Acquisition of and addition to investment properties            (32 439)     (319 485)
Proceeds on disposal of non-current assets                          212        12 127 
Loans receivable advanced                                          (537)       (6 039)
Business combination                                                  -            44 
Loans advanced to joint ventures and associates                    (647)       (9 053)
Loans repaid by joint ventures and associates                         -         4 786 
Acquisition of held-for-trading and available-for-sale 
  investments                                                   (12 638)      (44 663)
Proceeds on disposal of investments                              32 747        12 397 
Net cash outflow from investing activities                      (33 250)     (356 155)
                              
Cash flows from financing activities                                
Issue of shares                                                   1 818       119 817 
Capital distribution                                             (8 188)            - 
Decrease in borrowings                                          (11 467)      (13 736)
Increase in borrowings                                           37 577       247 668 
Net cash inflow from financing activities                        19 740       353 749 
                              
Net (decrease)/increase in cash and cash equivalents            (22 829)       10 889 
Cash and cash equivalents at the beginning of the year           55 389        44 500 
Total cash and cash equivalents at the end of the year           32 560        55 389


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 2016 comprise the company and its subsidiaries (together 
   referred to as the "group") and the group's interest in associates and joint ventures.

   The financial statements were authorised for issue by the directors on 4 November 2016.

   The preliminary, condensed consolidated results (the "results") have been prepared 
   in accordance with the framework concepts and the measurement and recognition 
   requirements of International Financial Reporting Standards ("IFRS") and the SAICA 
   Financial Reporting Guides as issued by the Accounting Practices Committee and 
   contain the information required by IAS 34: Interim Financial Reporting, the JSE 
   Listings Requirements and the Companies Act. The accounting policies and methods of 
   computation applied in the presentation of the results are consistent with those 
   applied in the prior year. These accounting policies and methods of computation 
   are in terms of IFRS.

   The results are stated in Rands, which is the company's functional and presentation 
   currency.

   There have been no changes to the board of directors during the year under review.

   The results have been reviewed by the company's independent auditors, Mazars. 
   Their unmodified review opinion is available for inspection at the company's registered 
   office. Their review was conducted in accordance with ISRE 2410 "Review of interim 
   financial information performed by the independent auditor of the entity". 
   The auditors' report does not necessarily report on all of the information contained 
   in these results. Shareholders are therefore advised that in order to obtain a full 
   understanding of the nature of the auditors' engagement they should obtain a copy 
   of the auditors' report together with the accompanying financial information from 
   the company's registered office.


2. TREASURY SHARES
                                                               Reviewed       Audited
                                                             Year ended    Year ended 
                                                              31 August     31 August
                                                                   2016          2015
   Number of shares held at year-end                          1 772 771     1 772 771


3. RELATED PARTY TRANSACTIONS                                     R'000         R'000
   Profits from equity accounted joint ventures                   9 583        18 444
   Profit from equity accounted associate                        11 242        12 772
   Interest received from associates                                101             -
   Interest received from joint ventures                          1 440         1 240
   Dividend received from associate                               8 891         7 409
   Administration fees received from associate                    1 652           137
   Administration fees received from joint ventures                 132           287
   Directors' emoluments                                         10 266         8 866


4. HEADLINE EARNINGS PER SHARE
                                                  Reviewed             Audited 
                                                 Year ended           Year ended 
                                                  31 August            31 August 
                                                     2016                 2015
                                               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                                          49 504                95 235
   Fair value adjustment on investment 
     properties                              (68 330)   (37 285)   (77 110)   (59 813)
   Fair value adjustments within equity 
     accounted profits                       (14 707)    (8 522)   (25 967)   (15 822)
   Goodwill write-off                              -          -      2 595      2 595
   Realised profit on sale of property, 
     plant and equipment                         (60)       (46)      (128)      (104)
   Headline earnings                                      3 651                22 091

   Headline earnings per share (cents)                      1.7                  11.2
   Diluted headline earnings per share (cents)              1.6                  10.3

   The calculation of headline earnings per share is based on the weighted average 
   number of 216 964 383 shares in issue during the year (2015: 196 787 425).

   The calculation of diluted headline earnings per share is based on the diluted 
   weighted average number of 234 753 255 shares in issue during the year 
   (2015: 213 488 389). 


5. SEGMENTAL INFORMATION 
                                            Property
                                             invest-               Unallo-    Elimin-
                                   Gaming      ments  Education      cated     ations      Total
                                    R'000      R'000      R'000      R'000      R'000      R'000
   2016
   Revenue                          1 580    123 697      7 367          -          -    132 644
   Intersegment revenue             8 891          -          -          -     (8 891)         -
   Net income before tax           22 290     60 061        245      1 394          -     83 990
   Total assets                    97 041  1 042 637     23 970     27 016          -  1 190 664
   Total liabilities                    -    588 810        632          -         -    589 442

   2015
   Revenue                          1 612    101 504          -           -         -    103 116
   Intersegment revenue             7 409          -          -           -    (7 409)         -
   Net income before tax           20 347     99 541          -      (1 270)        -    118 618
   Total assets                   100 625    960 965          -      13 444         -  1 075 034
   Total liabilities                    -    532 506          -           -         -    532 506

   The education segment is a new segment presented in the current year upon the segment 
   becoming fully operational.


6. Subsequent events
   Subsequent to year-end Trematon, via its subsidiary, Aria Property Group, entered 
   into agreements to purchase R614.1 million worth of properties from Redefine Properties 
   Limited. The majority of the purchase price will be funded by bank borrowings. Further 
   information can be found in the SENS announcement released on 31 October 2016. 

   Subsequent to year-end Trematon entered into a 50:50 joint arrangement to purchase 
   R83 million worth of residential property units in Sanddrift, Cape Town. The majority 
   of the purchase price will be funded by bank borrowings.

 
7. CAPITAL REDUCTION DISTRIBUTION
   The capital distribution of R8.2 million (3.75 cents per share) which was declared 
   on 7 November 2015 was paid to members on 18 January 2016. 

   The capital distribution was treated as a return of contributed tax capital to 
   shareholders recorded in the share register of the company at the close of business 
   on 15 January 2016.

   On 4 November 2016, subsequent to year-end, the board of directors declared a 
   capital reduction distribution of 4.0 cents per share as a return of contributed 
   tax capital to shareholders recorded in the share register of the company at the 
   close of business on Friday, 27 January 2016.

   The directors have determined that this capital reduction distribution will be paid 
   out of qualifying contributed tax capital, as contemplated in the definition of 
   "contributed tax capital" in section 1 of the Income Tax Act, 1962. As the 
   distribution will be regarded as a return of capital and may have potential capital 
   gains tax consequences, Trematon shareholders are advised to consult their tax 
   advisers regarding the impact of the distribution.    

   The directors have reasonably concluded that the company will satisfy the solvency 
   and liquidity test immediately after the capital distribution. 
 
   The net amount payable to shareholders is R8.8 million, being 4.0 cents per share, 
   based on the current number of 219 486 600 shares in issue.

   The income tax reference number of Trematon Capital Investments Limited is 9340/323/84/0.

   Last date to trade:           Tuesday, 24 January 2017 
   Ex-date:                    Wednesday, 25 January 2017
   Record date:                   Friday, 27 January 2017
   Payment date:                  Monday, 30 January 2017

   Share certificates may not be dematerialised or rematerialised between Wednesday, 
   25 January 2017 and Friday, 27 January 2017, both days inclusive.


8. ANNUAL GENERAL MEETING
   Notice is hereby given that the annual general meeting ("AGM") of the members of 
   Trematon Capital Investments Limited will be held in the boardroom on the third floor,
   Aria North Wharf, 42 Hans Strijdom Avenue, Cape Town on Wednesday, 25 January 2017 
   at 10:00. 


CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S JOINT REPORT
Trematon is an investment holding company that invests in assets and operating 
businesses which management believes will have the potential to generate an internal 
rate of return of 20% or greater over time. The company's operations are not limited 
to a specific commercial area but there is currently a strong focus on property-related 
investments.

The group owns some operating businesses with a stable income flow but these tend to 
be outweighed by investment activities during the year. The pattern of investment 
acquisition and realisation is irregular which can result in uneven profits that do 
not follow predictable patterns. In order to ameliorate this volatility it is our 
objective to pay a regular and growing dividend over time.

Intrinsic net asset value increased slightly in the current year to 368 cents per share 
reflecting a stable but relatively subdued year for property and investment assets in 
general. Some major investment projects were close to completion in the current year 
but will only be concluded and fully accounted for in the next financial year. There 
were no major changes to the composition of the group's net asset value during the 
financial year.

Group revenues increased by 29%. The bulk of revenue is made up of rental income which 
increased by 81% during the period but this was partially off-set by a decline in 
sales of property. Group profit after tax declined by 42% because the prior period 
contained several once-off profits which were not repeated and diluted earnings per 
share declined by 53%. The group dividend was increased by 7% to 4 cents per share. 
The annuity income of the group is growing, which is reflected by the increase in 
rental income and the addition of school fee income which is expected to provide the 
group with a more stable base of earnings in the future. As noted above, profits are 
somewhat volatile but the group aims to pay a steadily growing dividend which is 
supported by long-term income growth. For a detailed review of the financial aspects 
of the results please refer to the Chief Financial Officer's report below.

Management undertook a strategic review process during the financial year and certain 
material changes will be implemented in the group structure over the next 12 to 
18 months. It was felt that Club Mykonos was a very large proportion of the group's 
net asset value and that, although it is a stable and attractive asset, it should 
make up a smaller proportion of the total net asset value. This can be achieved by 
liquidating a portion of that investment or by growing the balance of the portfolio, 
or a combination of both. A further outcome of the strategic review process was to 
continue to focus on value added property opportunities via the Aria Property Group 
and on education via Generation Education. It was also recognised that the group 
could improve its communications with its broad shareholder base and steps have been 
put in place to achieve this.

Shareholders should note that a SENS announcement relating to an acquisition of 
properties by Aria Property Group, was made on 31 October 2016 which related to the 
preceding paragraph. The full impact of this announcement will be felt over the next 
12 to 24 months.

The group has four major areas of operation: Club Mykonos (including a 30% share in 
the Mykonos Casino), Aria Property Group (commercial, retail and industrial property 
investments), Resi Investment Group (residential property investments primarily held 
for rental) and Generation Education (a new education paradigm incorporating a 
Montessori framework in the early years and internationally based Cambridge Education 
for older students). The group also has an active trading portfolio which includes 
listed and unlisted equities across many industry sectors.

CLUB MYKONOS LANGEBAAN (PTY) LIMITED
Mykonos Casino
In the period under review the Mykonos Casino contributed R10.8 million to group 
profits which was 3.3% lower than the previous period. Extensive roadworks on the main 
access roads in and around Langebaan had a material impact on trading but growth 
should resume once this has been completed.

The Marina and Boatyard
The Club Mykonos Marina (188 berths and related commercial activities) remains in high 
demand and continues to generate sustainable profit growth. 

The development of the boatyard (251 boat and general storage garages of various 
sizes) is now complete. Occupancy is currently running at around 90% and it should 
have a similar profit profile to the marina once optimised. 

COMMERCIAL AND LEISURE PROPERTIES
The Club Mykonos resort continues to improve as a holiday destination. Club Mykonos 
also has a growing residential component of permanent occupants who are attracted by 
the beautiful surroundings, security and amenities.

The resort Homeowners Association is in a sound financial position and strives to 
maintain the resort infrastructure at a high level.

The Marina Village development is nearing completion and the first transfers will take 
place in early 2017. A few units were held back until completion and these will be 
actively marketed over the holiday season.

Several significant development opportunities still exist on the resort and these are 
being actively explored for when Marina Village is complete.

Restaurants and other commercial operators on the resort have shown good turnover 
growth and rentals are generally growing at inflation or faster.

ARIA PROPERTY GROUP ("ARIA") 
Aria is a commercial property business with a focus on property investments which are 
institutional quality prime assets. The geographic focus is predominantly on the 
Western Cape although there are some opportunistic investments in other areas. Aria 
has established a sound and growing reputation for adding value to commercially 
viable investments. The primary focus is on establishing solid rental income for 
these properties. Properties are purchased with a long-term view but the portfolio 
is reviewed regularly and some assets may be sold if management feels there is 
limited opportunity to add further value. 

At year-end Aria owned property assets amounting to R466.7 million. Subsequent to 
year-end a further R614.1 million worth of properties were purchased from the 
Redefine group which includes Pier Place (in the Cape Town Foreshore), the Maynard Mall 
(a regional shopping centre in Wynberg, Cape Town) and Berg River Park (an industrial 
park in Paarl, Western Cape). Total property assets after this acquisition will 
amount to R1.081 billion.

After the completion of the new purchases 90% of the portfolio will be in the 
Western Cape. The acquisition will provide Aria with a balanced mix of income-
producing assets with positive income growth potential and the opportunity to add 
value through ad hoc redevelopment projects and active hands-on asset management.

RESI INVESTMENT GROUP ("RESI")
Resi's core portfolio has performed well due to a combination of focused management 
and a generally strong market for rental properties in the Western Cape. In certain 
areas, where management feels that the opportunity for further capital appreciation 
is limited, selective sales will take place in 2017.

Incremental investment took place in existing complexes but there were no opportunities 
for major purchases at attractive prices due to the generally strong market and a 
shortage of supply. 

As a result of the lack of existing stock, management has begun to enter into 
development projects in the new financial year. The group undertook a 50:50 joint 
venture project to purchase 126 units in Sanddrift (situated between Century City 
and Milnerton). Transfer took place shortly after the financial year-end and the 
letting-up process has progressed well. The development is currently 70% let and 
should be fully let by December 2016. The projected yields on this investment promise 
to be better than those on existing buildings for sale and further projects will be 
selectively pursued.

The Woodstock Hub joint venture is still active and further accumulation of stock 
continues to take place. Prices in the area have increased but management has 
identified strategic locations which will be acquired if they are commercially viable.

GENERATION EDUCATION
Generation Education is a grouping of schools with a modern approach to education 
that uses Montessori principles in the early years and an internationally accredited 
curriculum provided by Cambridge University in the higher grades. 

Our first school (Generation Sunningdale) was built at the end of 2015 and opened its 
doors in the current financial year. The demand for places at the school has exceeded 
expectations and the school is currently undergoing a major expansion. Although the 
schools are priced to be affordable, the model has proved to be commercially viable 
and we will continue to invest in the business.

Agreements were entered into for the purchase of a school in Hermanus that will be 
rebranded and run by Generation Education. Plans are being prepared to expand the 
school by adding more classrooms and additional facilities. 

A site in Noordhoek was also acquired which is suitable for a large school, the 
process of applying for rezoning has commenced and we are hopeful that a positive 
announcement can be made in this regard during 2017. Subsequent to year-end a suitably 
zoned building in Melkbos was acquired.

CONCLUSION
The 2016 financial year was a year of consolidation and introspection for the group. 
A major strategy discussion took place early in the year and the implementation of 
that strategy began in earnest towards the end of the financial year, with most of the 
significant transformative transactions taking place after year-end. Therefore, the 
financial picture to be presented at the interim stage in February 2017 will differ 
very substantially from that presented in these accounts.

Notably, the Aria portfolio will have more than doubled in size, exceeding R1 billion 
of high-quality institutional grade assets which provide a significant pipeline for 
valued added repurposing or redevelopment. 

Generation Education, although small as a proportion of the current net asset value, 
has excellent growth potential and the group now owns four school sites with further 
sites under active investigation.

All four major areas of operation (Aria, Resi, Club Mykonos and Generation Education) 
have made significant new investments and have good momentum for the forthcoming 
financial year.


CHIEF FINANCIAL OFFICER'S REPORT
OVERVIEW 
Trematon has continued to grow its capital base and add value to its various 
investments while continuing to investigate new opportunities. The earnings and 
headline earnings have decreased on the prior-year results, while the net asset value 
and intrinsic net asset value have increased marginally. 

RESULTS
The group made a profit for the year attributable to equity holders of R49.5 million 
(2015: R95.2 million). This translates to earnings per share of 22.8 cents 
(2015: 48.4 cents) which is a decrease of 53% over the prior year. The reason for the 
decrease in earnings is due to the inclusion in the prior year of non-recurring items, 
primarily the reclassification of inventory to investment property in the prior year 
in terms of IFRS. There were also fair value adjustments on held-for-trading investments 
that were written down in the current year. Expenses were incurred during the current 
year on the expansion of Generation Education and various other investments.

The group's book net asset value has increased by 20 cents per share to 255 cents per 
share (2015: 235 cents per share) which is an increase of 9% over the prior year. 
The intrinsic net asset value has increased by 6 cents per share to 368 cents per 
share (2015: 362 cents per share). This is an increase of 2% from the prior year's 
intrinsic net asset value. The intrinsic net asset value aims to provide shareholders 
with a realistic estimate of the group's net asset value. This differs from the IFRS 
values where IFRS requires that certain assets are not recorded at their market value. 

INDIVIDUAL INVESTMENTS
Subsidiaries
Club Mykonos Langebaan ("CML") (100%)
CML contributed a profit for the year of R20.5 million (2015: R28.0 million). This profit 
includes a contribution from the Mykonos Casino of R10.8 million (2015: R11.2 million). 
Dividends from the casino for the year amounted to R8.9 million (2015: R7.4 million). 

The casino traded well through the year, however profits were flat when compared to the 
prior year. The refurbishment carried out in the prior year and completed at the 
beginning of the current year did have a slight impact in the gross gaming revenue, 
however the upgrade of the main access road into Langebaan has proven to have a 
slight negative impact on the current year's results as access has been affected.

Rental income from investment properties has continued to meet expectations. 

Sales of Marina Village units, the newest development on the water's edge at the 
Mykonos Marina has proven to meet our expectations with 16 of the 25 units already 
sold. Completion and transfer is expected in early 2017.

Resi Investment Group (100%)
Resi's core focus continues to be the investment in residential properties with 
long-term rental income profiles. While there has been a slowdown in residential 
property acquisitions, we have entered into a joint venture partnership that purchased 
126 newly developed residential property units in Sanddrift, Cape Town. These were 
completed and transferred at the end of October 2016. These developments are expected 
to be both yield enhancing and add capital growth to the portfolio in the long term. 
Resi contributed R12.8 million (2015: R61.1 million) to group profits. The main reason 
for the large decrease in earnings is due to fair value adjustments being recognised 
in the prior year in respect of inventory that was reclassified to investment property. 
Even though the residential market may be slowing down we are always investigating 
opportunities to grow this business and make acquisitions that meet our investment 
criteria.

Aria Property Group (67%)
Aria, which includes Arbitrage Property Fund (Pty) Limited, invests in properties in 
the commercial, industrial and retail sectors. Aria contributed R38.4 million 
(2015: R26.3 million) to group profit. Aria continues its intention of growing its 
asset base with good-quality property investments that generate both high yields and 
long-term capital growth.

Subsequent to year-end Aria entered into agreements with Redefine Properties Limited 
for the purchase of R614.1 million worth of properties - see SENS announcement on 
31 October 2016 for further details. This will increase Aria's investment properties 
to over R1 billion.

Generation Education ("Generation") (75%)
Generation's first school was opened in Sunningdale in the Western Cape in January 2016. 
The investment has proven to be a success with the school reaching capacity from day 
one, with a large waiting list for future students. The current school offers classes 
up to age 12 and we are in the process of expanding the school to include a middle 
school which will cater for children aged 12 to 15. The construction of the middle 
school is currently under way and is expected to be completed by the middle of 2017. 
The company contributed R0.3 million to group profits. A majority of the current year's 
expenses is due to the initial group setup costs as well as absorbing costs that 
related to future school expansions. 

Generation has concluded the purchase of an existing school in Hermanus and the 
purchase of a large plot of land in Noordhoek (both located in the Western Cape). 
The Hermanus school will be operated as a Generation school from 1 January 2017 and 
will be extended from its current form to provide classes up to age 15. The Noordhoek 
land will be utilised to build a new school catering for children from ages 3 to 18 years. 

Joint Ventures and associates
The Vredenburg Property Trust ("VPT") (50%)
VPT, a joint venture of which Aria owns 50%, owns the Vredenburg Mall in Vredenburg, 
Western Cape. VPT contributed R2.0 million (2015: R2.7 million) to equity accounted 
earnings. Operating profits reduced marginally over the prior year, however the asset 
continues to perform as expected.

Tremtrust 1 (50%)
Tremtrust owns the Northgate Park which is an A-Grade office park located on the 
N1 highway in Cape Town. This is a joint venture with Buffet Investment Services (Pty) 
Limited. The refurbishment and redevelopment of the property has proven to be a 
success and is now fully tenanted. Tremtrust contributed R2.4 million to equity 
accounted profits (2015: R12.2 million). The decrease in profits is mainly due to 
larger fair value adjustments being accounted for in the prior financial year. 
The fair market value of the property is R195.6 million.

The Woodstock Hub (Pty) Limited (50%)
The Woodstock Hub has continued its acquisition of properties in the Woodstock area 
in Cape Town with the intention to redevelop both residential, commercial and mixed-use 
properties. The Woodstock Hub has contributed R5.2 million to equity accounted profits 
during the year (2015: R4.7 million).

Buffshelf 70 Trust (20%) 
Buffshelf owns the Cape Gate Value Centre situated in Brackenfell, Cape Town. 
The investment is equity accounted and contributed R0.4 million to group profits 
(2015: R1.6 million).

OTHER INVESTMENTS
Trematon continues to invest in various JSE-listed companies where we feel a trading 
opportunity exists. During the current year Trematon realised a profit on held-for-
trading investments of R3.3 million (2015: R5.8 million). 

The group maintains its investment in Cloudberry Investments 18 (Pty) Limited which 
holds shares in Mazor Group Limited. This investment improved slightly in the current 
year due to the increase in the Mazor share price. The investment in Cloudberry 
continues to be carried at its realisable value, which is estimated with reference 
to the market value of the underlying listed investments held by Cloudberry.


Domicile and registered office: 42 Hans Strijdom Avenue, Cape Town
PO Box 7677, Roggebaai, 8012, South Africa
Transfer secretaries: Link Market Services South Africa (Pty) Limited
19 Ameshoff Street, Braamfontein, 2001
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
Auditor: Mazars
Date published: 14 November 2016
Prepared by: The group financial results have been prepared under the supervision
of Mr AL Winkler Chief Financial Officer CA (SA).
Contact details: Tel: 021 421 5550, Fax: 021 421 5551
Website: www.trematon.co.za

The preliminary condensed consolidated results have been independently reviewed in 
compliance with the requirements of the Companies Act of South Africa.



Date: 14/11/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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