Wrap Text
Unaudited Interim Results for the six months ended 28 February 2019
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")
UNAUDITED INTERIM RESULTS
for the six months ended 28 February 2019
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
At At At
28 February 28 February 31 August
2019 2018 2018
Note R'000 R'000 R'000
ASSETS
Non-current assets 2 049 736 2 056 743 2 094 953
Property, plant and equipment 206 445 126 694 150 490
Investment properties 1 659 311 1 700 118 1 702 317
Investments in joint ventures 28 193 94 892 94 848
Investments in associate entities 90 781 77 553 88 473
Loans receivable 5 62 873 52 950 55 412
Goodwill - 1 085 -
Deferred tax asset 2 133 3 451 3 413
Current assets 238 486 200 549 200 403
Loans receivable 3 904 9 742 20 575
Trade and other receivables 21 594 14 271 19 406
Investments 8 360 9 606 10 603
Inventory 46 348 48 764 50 777
Current tax assets - 2 -
Cash and cash equivalents 158 280 118 164 99 042
Non-current assets held for sale - - 2 354
Total assets 2 288 222 2 257 292 2 297 710
EQUITY AND LIABILITIES
Equity 1 019 732 977 820 1 023 459
Share capital and share premium 282 010 294 824 293 497
Treasury shares - - (137)
Fair value reserve 31 737 29 601 31 073
Share-based payments reserve 17 875 14 149 15 681
Foreign currency translation reserve 2 630 (1 153) 3 733
Accumulated profit 536 007 504 406 536 210
Total equity attributable to equity holders of the parent 870 259 841 827 880 057
Non-controlling interest 149 473 135 993 143 402
Non-current liabilities 1 190 702 1 083 987 1 196 477
Loans payable 1 089 761 983 382 1 096 960
Deferred tax liability 100 941 100 605 99 517
Current liabilities 77 788 195 485 77 774
Loans payable 2 842 152 507 15 075
Current tax payable 11 160 161 62
Trade and other payables 63 786 42 817 62 637
Total equity and liabilities 2 288 222 2 257 292 2 297 710
Net asset value per share (cents) 403 389 407
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
28 February 28 February 31 August
2019 2018 2018
Note R'000 R'000 R'000
Revenue 4 198 801 153 989 317 576
Realised loss on investments at fair value
through profit or loss (599) (442) (854)
Realised profit on sale of non-current assets 3 890 - 2 187
Realised loss on sale of joint venture (2 624) - -
Total realised profit/(loss) 667 (442) 1 333
Fair value adjustment on investments at fair value
through profit or loss (4 893) 567 3 713
Fair value adjustment on investment properties 54 14 911 32 768
Impairment of loan (5 821) (2 371) (2 666)
Total (loss)/profit from fair value adjustments (10 660) 13 107 33 815
Other income 683 - 1 097
Employee benefits (35 509) (24 237) (51 833)
Cost of property and land sold (11 130) (7 122) (11 169)
Other operating expenses (84 500) (72 418) (154 515)
Operating profit 58 352 62 877 136 304
Finance costs (53 623) (55 695) (110 544)
Profit from equity accounted investments (net of tax) 5 15 273 19 393 25 383
Profit before income tax 20 002 26 575 51 143
Income tax (14 135) (1 761) (792)
Profit for the period/year 5 867 24 814 50 351
Other comprehensive income
Items that will not subsequently be reclassified to profit/(loss):
Fair value gain on revaluation of property, plant and equipment 856 4 447 6 344
Tax effects on fair value adjustments (192) (996) (1 421)
Items that are or may subsequently be reclassified to profit/(loss):
Foreign currency translation differences on equity
accounted investments (1 103) (1 016) 3 870
Other comprehensive income for the period/year (439) 2 435 8 793
Total comprehensive income for the period/year 5 428 27 249 59 144
Profit attributable to:
Equity holders of the parent (203) 15 496 35 657
Non-controlling interest 6 070 9 318 14 694
5 867 24 814 50 351
Total comprehensive income attributable to:
Equity holders of the parent (642) 17 931 44 450
Non-controlling interest 6 070 9 318 14 694
5 428 27 249 59 144
Earnings per share
Number of shares issued (thousands) 216 144 216 607 216 144
Weighted average number of shares (thousands) 216 144 216 785 216 641
Diluted weighted average number of shares (thousands) 236 677 235 208 236 083
Earnings per share (cents) (0.1) 7.1 16.5
Diluted earnings per share (cents) (0.1) 6.6 15.1
STATEMENT OF CHANGES IN EQUITY
Total Fair
Share Share Treasury share value
capital premium shares capital reserve
R'000 R'000 R'000 R'000 R'000
Balance at 1 September 2017 2 177 307 142 (1 107) 308 212 26 150
Total comprehensive income for the period - - - - 3 451
Profit for the period - - - - -
Fair value gain on property, plant and equipment - - - - 4 447
Tax effects on revaluations - - - - (996)
Share-based payment - - - - -
Treasury shares cancelled (15) (4 174) 4 189 - -
Treasury shares acquired - - (3 082) (3 082) -
Foreign exchange movements on investment in associate - - - - -
Ordinary shares issued 3 559 - 562 -
Capital distribution - (10 868) - (10 868) -
Change in shareholding - - - - -
Balance at 28 February 2018 2 165 292 659 - 294 824 29 601
Balance at 1 March 2018 2 165 292 659 - 294 824 29 601
Total comprehensive income for the period - - - - 1 472
Profit for the period - - - - -
Fair value gain on property, plant and equipment - - - - 1 897
Tax effects on revaluations - - - - (425)
Share-based payment - - - - -
Settlement of share-based payment - - - - -
Treasury shares cancelled (4) (1 324) 1 328 - -
Treasury shares acquired - - (1 464) (1 464) -
Foreign exchange movements on investment in associate - - - - -
Change in shareholding - - - - -
Balance at 31 August 2018 2 161 291 335 (136) 293 360 31 073
Balance at 1 September 2018 2 161 291 335 (136) 293 360 31 073
Total comprehensive income for the period - - - - 664
Profit for the period - - - - -
Fair value gain on property, plant and equipment - - - - 856
Tax effects on revaluations - - - - (192)
Share-based payment - - - - -
Treasury shares cancelled - (136) 136 - -
Foreign exchange movements on investment in associate - - - - -
Capital distribution - (11 350) - (11 350) -
Balance at 28 February 2019 2 161 279 849 - 282 010 31 737
Foreign
Share- currency Accumu-
based trans- lated Non-con-
payment lation profit/ trolling Total
reserve reserve (loss) Total interest equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 September 2017 11 826 (137) 504 254 850 305 104 025 954 330
Total comprehensive income for the period - - 15 496 18 947 9 318 28 265
Profit for the period - - 15 496 15 496 9 318 24 814
Fair value gain on property, plant
and equipment - - - 4 447 - 4 447
Tax effects on revaluations - - - (996) - (996)
Share-based payment 2 323 - - 2 323 - 2 323
Treasury shares cancelled - - - - - -
Treasury shares acquired - - - (3 082) - (3 082)
Foreign exchange movements on investment
in associate - (1 016) - (1 016) - (1 016)
Ordinary shares issued - - - 562 - 562
Capital distribution - - - (10 868) - (10 868)
Change in shareholding - - (15 344) (15 344) 22 650 7 306
Balance at 28 February 2018 14 149 (1 153) 504 406 841 827 135 993 977 820
Balance at 1 March 2018 14 149 (1 153) 504 406 841 827 135 993 977 820
Total comprehensive income for the period - - 20 161 21 633 5 376 27 009
Profit for the period - - 20 161 20 161 5 376 25 537
Fair value gain on property, plant
and equipment - - - 1 897 - 1 897
Tax effects on revaluations - - - (425) - (425)
Share-based payment 1 654 - - 1 654 - 1 654
Settlement of share-based payment (122) - - (122) - (122)
Treasury shares cancelled - - - - - -
Treasury shares acquired - - - (1 464) - (1 464)
Foreign exchange movements on investment
in associate - 4 886 - 4 886 - 4 886
Change in shareholding - - 11 643 11 643 2 034 13 677
Balance at 31 August 2018 15 681 3 733 536 210 880 057 143 403 1 023 460
Balance at 1 September 2018 15 681 3 733 536 210 880 057 143 403 1 023 460
Total comprehensive income for the period - - (203) 461 6 070 6 531
Profit for the period - - (203) (203) 6 070 5 867
Fair value gain on property, plant
and equipment - - - 856 - 856
Tax effects on revaluations - - - (192) - (192)
Share-based payment 2 194 - - 2 194 - 2 194
Treasury shares cancelled - - - - - -
Foreign exchange movements on investment
in associate - (1 103) - (1 103) - (1 103)
Capital distribution - - - (11 350) - (11 350)
Balance at 28 February 2019 17 875 2 630 536 007 870 259 149 473 1 019 732
STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
Cash flows from operating activities
Cash generated in operations 62 089 41 847 104 579
Finance income 4 902 6 411 8 989
Dividends received - 820 3 625
Dividends received from associate - - 3 500
Finance costs (52 647) (55 695) (106 918)
Tax paid (525) (670) (846)
Net cash from operating activities 13 819 (7 287) 12 928
Cash flows from investing activities
Acquisition of and addition to property, plant and equipment (61 047) (34 801) (56 453)
Acquisition of and addition to investment property (5 413) (19 253) (43 097)
Proceeds on disposal of non-current assets/investment property 48 505 19 375 27 273
Proceeds on disposal of joint venture 7 989 - -
Loans receivable advanced (3 954) - -
Loan advanced to joint ventures and associates (8 345) (4 559) (6 589)
Loans repaid by joint ventures and associates 20 924 1 000 3 530
Distributions received from joint venture 63 805 - -
Acquisition of subsidiary - (192) -
Acquisition of investments at fair value through profit or loss - - (2 805)
Proceeds from disposal of investments - - 4 543
Net cash from investing activities 62 464 (38 430) (73 598)
Cash flows from financing activities
Ordinary shares issued - 562 562
Acquisition of treasury shares - (4 189) (4 547)
Capital distribution (11 350) (10 868) (10 868)
Decrease in borrowings (31 447) (21 706) (110 543)
Increase in borrowings 25 752 30 150 115 176
Net cash from financing activities (17 045) (6 051) (10 219)
Net increase/(decrease) in cash and cash equivalents 59 238 (51 768) (70 889)
Cash and cash equivalents at the beginning of the period/year 99 042 169 932 169 931
Total cash and cash equivalents at the end of the period/year 158 280 118 164 99 042
NOTES
1. PRESENTATION OF CONSOLIDATED RESULTS
Trematon Capital Investments Limited (the "company") is a company domiciled in South Africa.
The unaudited interim consolidated results of the company for the period ended 28 February 2019
comprise the company and its subsidiaries (together referred to as the "group") and the group's
interest in joint ventures and associates.
The unaudited interim consolidated results have been prepared in accordance with and containing
information required by IAS 34 - Interim Financial Reporting, as well as the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Prounouncements
as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the
requirements of the Companies Act 2008 (Act No. 71 of 2008) of South Africa ("Companies Act").
The unaudited interim consolidated results have been prepared using accounting policies and
methods of computation that are in terms of IFRS and which are consistent with those of the
previous annual financial statements. The unaudited interim consolidated results have not been
audited or reviewed by the company's auditors.
The unaudited interim consolidated results have been prepared on the going concern basis using
a combination of the historical cost and fair value bases of accounting.
The unaudited interim consolidated results are stated in Rands, which is the group's functional
and presentation currency.
In preparing the unaudited interim consolidated results management is required to make estimates
and assumptions that affect the amounts represented in the unaudited interim consolidated results
and related disclosures. Use of available information and the application of judgement is
inherent in the formation of estimates. Actual results in the future could differ from these
estimates which may be material to the unaudited interim consolidated results.
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 and in any future
periods affected.
2. INTERNATIONAL REPORTING STANDARDS ADOPTED DURING THE YEAR
IFRS 9 - Financial Instruments
The adoption of IFRS 9 has not resulted in any significant reclassification of financial assets
between amortised cost, fair value through profit or loss and fair value through other
comprehensive income. The group's business model for its non-equity financial assets within the
scope of IFRS 9 is "hold to collect". All the group's significant investments in equity
instruments have been classified at fair value through profit or loss. The impact of the adoption
of the expected credit loss model has also not had a material impact on the group's interim results.
IFRS 15 - Revenue from Contracts with Customers
The adoption of IFRS 15 has not had a material impact on the group's results. It continues to
recognise service revenue (such as administration fees and school fees) over time, as the
services are performed. Revenue on the sale of property and land is recognised upon transfer,
which is when control passes to the customer. The adoption of the standard has resulted in
additional disclosure.
3. HEADLINE EARNINGS PER SHARE RECONCILIATION
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
28 February 28 February 31 August
2019 2019 2018 2018 2018 2018
Gross Net Gross Net Gross Net
R'000 R'000 R'000 R'000 R'000 R'000
(Loss)/profit attributable to equity
holders of the parent (203) 15 496 35 657
Fair value adjustment on investment
properties (54) (25) (14 911) (8 405) (32 768) (21 001)
Fair value adjustments within equity
accounted profits (1 848) (860) (18 142) (9 111) (17 254) (8 261)
Realised loss on sale of joint venture 2 624 2 624 - - - -
Realised profit on sale of non-current
assets (3 890) (1 749) - - (2 187) (255)
Headline earnings (213) (2 020) 6 140
Headline earnings per share (cents) (0.1) (0.9) 2.8
Diluted headline earnings per share (cents) (0.1) (0.9) 2.6
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
4. REVENUE
Rental income 139 247 119 271 245 817
School fees 31 691 16 551 37 340
Sale of property and land 19 730 8 522 15 417
Administration fee income 3 231 2 413 3 671
Dividend income - 821 3 625
Interest income 4 902 6 411 11 706
198 801 153 989 317 576
5. RELATED PARTIES
Related party transactions
Included in profit from equity accounted investments are
the following related party transactions:
Profits from equity accounted joint ventures 11 525 16 400 16 389
Profit from equity accounted associates 3 748 2 993 8 994
Directors' emoluments 3 808 3 558 13 050
Related party balances
Included in loans receivable are the following related
party balances:
Loans to joint ventures 28 119 37 033 36 466
Loans to associates 1 551 1 098 1 155
6. SEGMENTAL INFORMATION
Property UK Corporate
invest- invest- and
ments Education ments other Total
R'000 R'000 R'000 R'000 R'000
Unaudited six months ended 28 February 2019
Revenue 164 465 34 336 - - 198 801
Profit before tax 28 704 156 2 965 (11 823) 20 002
Total assets 1 907 803 220 031 86 717 73 671 2 288 222
Total liabilities 1 262 139 5 225 - 1 126 1 268 490
Unaudited six months ended 28 February 2018
Revenue 136 377 17 612 - - 153 989
Profit before tax 23 999 (755) 2 511 820 26 575
Total assets 1 937 533 114 837 74 182 130 740 2 257 292
Total liabilities 1 270 791 8 681 - - 1 279 472
Audited year ended 31 August 2018
Revenue 273 593 40 358 - 3 625 317 576
Profit before tax 43 031 (3 492) 8 297 3 307 51 143
Total assets 2 008 620 154 813 84 855 49 422 2 297 710
Total liabilities 1 266 950 3 793 - 3 508 1 274 251
Directors' Review
COMMENTARY ON FINANCIAL RESULTS
The local economic backdrop to this set of interim results has been negative. In this context the
asset values in the group's portfolio have held up exceptionally well but growth has been muted.
The decision was made last year to sell some mature assets in both the commercial property portfolio
and the residential portfolio in order to reduce gearing and create capacity. This decision leaves
the group in a solid financial position with sufficient capacity to continue to grow the education
business without resorting to excessive gearing or capital raising in an unfavourable market.
The primary measure of shareholder value in the group is the intrinsic net asset value ("INAV").
Increases in INAV do not occur on a consistent annual basis and are dependent on the value-added
cycle of the individual businesses. The INAV is the directors' best estimate of the true underlying
value of the group, assuming an orderly and efficient disposal process and after taking into account
any possible taxes.
Over the six-month period new capital has been invested into Generation Education ("Generation")
and Balwin Rentals, a new venture in the residential property market. The group has seen substantial
cash inflows as a result of the sale of properties.
INAV per share increased to 482 cents from 468 cents at the August 2018 year-end. The components of
INAV have changed slightly due to realisations of mature assets in Aria Property Group ("Aria") and
Resi Investment Group ("Resi"), and sales of development stock in Club Mykonos Langebaan ("CML") at
values in excess of directors' valuations. The funds from the proceeds were used for further investments
into Generation and Balwin Rentals. The valuation of Generation, which is in a rapid growth phase,
was not adjusted other than for the cost of construction of school properties. A full valuation exercise
will be conducted at year-end. There was also an increase in value of the investment in ASK Partners
("ASK"), Trematon's United Kingdom-based investment.
Group net profit after tax was R5.9 million (2018: R24.8 million). The amount attributable to
shareholders was a loss of R0.2 million. This translates to a loss per share of 0.1 cents
(2018: profit per share of 7.1 cents) and a headline loss per share of 0.1 cents (2018: 0.9 cents).
In the current interim period an accounting loss was realised on the sale of a joint venture
within Resi, which owned a residential complex in Sanddrift, Cape Town and an impairment was
raised on the investment in Cloudberry Investments, which holds shares in Mazor Group Limited.
An unrealised loss of R4.2 million was also recognised on the mark-to-market fair value adjustment
of an interest rate swap within Aria.
Increased operating costs were also experienced within Generation that relate directly to the
Imhoff campus, which was opened in January 2019. Additional staff was hired prior to the school
opening so as to enable training and preparation of the staff for the new school. This is in line
with Generation's quality control procedures to ensure that the schools are uniformly run and
operate smoothly from day one.
The headline loss improved from the prior interim period as a result of increased annuity income
within the group, mainly from the Aria, Resi and Generation businesses.
REVIEW OF MAJOR INVESTMENTS
Generation Education
Generation currently has eight school sites. There are six operating schools with two sites in the
process of being developed. The number of students has increased to 1 243 (August 2018: 937 students).
The two largest schools by pupil numbers are in Sunningdale, Cape Town and Hermanus, while the
Imhoff site in Kommetjie, Cape Town will be the largest school when completed. The Sunningdale campus
is full, with a strong waiting list. We have purchased a second site in Sunningdale to expand our
offering to include a separate middle and high school campus, which is expected to be completed in
time for the 2020 school year. The Hermanus primary school is full and the middle and high school
is growing steadily and has exceeded our expectations.
Our newest school campus situated at Imhoff in Kommetjie opened in January 2019. Phase 1 is
complete and has a current capacity of 400 students. The initial intake for the first year of
operations was 240 students. Deposits and confirmations for the 2020 school year have already been
received for a further 140 students. Construction of phase 2 will commence shortly so as to be
completed in time for 2020. When completed the campus will be able to house 800 students and will
offer classes from pre-primary to high school.
Generation's school sites are all located in high-demand areas. The cost of sending a learner to a
Generation School is very competitive with conventional private education models and Generation
offers a high-quality, value-for-money product. Learner numbers are meeting or exceeding expectations
at all sites.
Generation is also developing certain ancillary businesses in high-growth areas of the education
market. Further details will be released in due course.
Aria Property Group
In anticipation of challenging market conditions and possible socio-political changes, Aria took a
fairly conservative approach during the period in order to mitigate risk and take advantage of
forthcoming buying opportunities. All sectors of the commercial property market appear to be under
pressure from a demand and pricing perspective, and Aria's value play and broker network have been
somewhat of a safeguard against these headwinds.
Aria achieved several notable milestones during this interim period, most notably the sale of
Northgate Park to Spear REIT, and continued to execute their strategy of disposing of both non-core
and out-of-province properties with the sale of Devonshire Parkade in Durban. Aria was also able
to repay all shareholder loans.
Aria has identified and, in some circumstances commenced with, approximately R75 million of possible
redevelopment projects within the existing portfolio. These projects include, but are not limited
to, the extension of York Street Boulevard in George, the redevelopment of a portion of industrial
space into higher-yielding mini-units and the implementation of self-storage, a food court,
Fives Futbol and other tenant-driven upgrades at Maynard Mall in Wynberg. Two high-yielding solar
projects are also under review.
Aria has continued to target a hedging strategy of fixing 50% of their overall debt subject to
attractive JIBAR pricing off both the three and five-year SWAP curve.
During this interim period, Aria's internal property management team managed to relet and/or renew
25% of the portfolio in terms of GLA, materially improving the lease expiry profile of the fund.
ASK Partners
ASK is a structured finance company that aims to provide innovative financing to property developers
in the UK.
ASK continues to contribute to the group's results and has performed ahead of budget for the interim
period, contributing R3 million (2018: R2.5 million) to the group results before a write-down of
R1.1 million due to the appreciation of the Rand relative to the Pound at the reporting date.
ASK has been well received by both borrowers and syndicated partners in the UK and remains on track
to achieve good returns in Pound Sterling. To date ASK has written loans in excess of ?153 million,
with over ?143 million being syndicated to third-party investors. The investor pipeline has expanded
as the company has established a track record and there is strong demand for ASK's products from a
broadening base of high net-worth individuals and institutions.
Club Mykonos Langebaan
Although CML is no longer one of the largest components of the group's INAV, it remains an important
investment and a stable performer, contributing regular annuity income flows from rentals and profits
from the sale or development of land inventory.
The Boatyard and Marina at Club Mykonos are full, with steady income flows. CML also continues to
achieve regular sales of kalivas (holiday units) and serviced plots. We are in the process of
upgrading the restaurant and terrace area at the Marina and will continue to investigate targeted
development opportunities which will enhance the value of both the resort and the group.
Resi Investment Group and other residential property investments
No further purchases were made in the 100%-owned Resi portfolio which reduced from 636 units to
483 units during the period as a result of sales of mature properties at individual retail prices.
Realisations have been, on average, in line with or above carrying values.
We are still very focused on the residential sector as a viable long-term investment. In the
Western Cape there are many new apartments to be delivered in the Cape Town metro during 2019,
so we are adopting a cautious approach to new investments. It is management's belief that some
distress in this market is likely in the next 12 to 18 months and that better acquisition
opportunities will present themselves than are currently available.
Growth in rental income from escalations is very limited. The Western Cape has enjoyed many years
of strong rental growth, but this is not the case in the current market. Vacancies are slightly
higher because apartments take longer to lease when they become vacant. Demand for units in the
price bracket targeted by Resi (R5 000 to R14 500 per month) remains high but the majority of
applicants do not pass the strict credit-vetting process imposed by the group.
The group owns 50% of the Woodstock Hub (Pty) Limited, which holds residential and commercial
properties in the Woodstock area in Cape Town. The majority of these properties have been purchased
with the intention to redevelop them into mixed-use schemes.
During the period Trematon entered into a new venture called Balwin Rentals with an effective
interest of 22.5%, together with Buffet Investments, KLT Holdings and Balwin Properties to acquire
residential units specifically built by Balwin Properties for the rental market. The investment has
a guaranteed initial net rental yield of 10.5% with annual escalations of 3%. The first tranche of
156 units to the value of R98 million was transferred in December 2018 and is fully let. We have
entered into a first right of refusal with Balwin Properties to purchase a further 4 544 units over
the next few years with an estimated value of R5 billion. For further details, refer to the SENS
announcement released by Balwin Properties on 19 February 2019.
CHANGES TO THE BOARD AND COMPANY SECRETARY
Trematon has appointed two new non-executive directors to the board, Robin Lockhart-Ross and
Keith Getz. Robin will serve as chairman of the board. Subsequent to the period-end Shiree Litten
resigned as company secretary and Jac Vos was appointed to replace her. We welcome them all to the
board and look forward to the benefit of their valuable knowledge, experience and guidance.
CONCLUSION
All businesses have performed relatively well in the current subdued economic climate and are
strongly positioned to take advantage of any improvements in the economy when they occur.
The share price continues to trade at a significant discount to INAV. This is not under the direct
control of management and reflects the same pattern as similar investment holding companies in the
current market. The focus of the management team is to grow the INAV over time while retaining a
healthy financial structure.
INTRINSIC VALUE REPORT
Trematon is an investment holding company and uses the intrinsic value model to provide management
and investors with a realistic and transparent way of evaluating Trematon's performance and value.
The intrinsic net asset value report below illustrates the intrinsic net asset value of all
investment categories of the group for the period ended 28 February 2019. The preparation of the
intrinsic net asset value is the responsibility of the directors of Trematon. The intrinsic net
asset value has been prepared to assist investors in analysing future prospects of the group.
The financial information below has been compiled by using a combination of listed market values,
external professional valuations, or directors' valuations, where applicable.
Intrinsic value
February February August
2019 2018 2018
R'000 R'000 R'000
Club Mykonos Langebaan 1 130 465 149 052 138 246
Aria Property Group 1 224 791 218 819 227 199
Resi Investment Group 1 183 252 251 328 201 634
Generation Education 2 286 571 128 382 225 630
ASK Partners 3 86 717 74 182 84 855
Other 4 32 373 25 995 34 895
Cash 5 98 486 118 164 99 042
Totals 1 042 656 965 922 1 011 501
Number of shares in issue (thousands) 216 144 216 607 216 144
INAV per share (cents) 482 446 468
share price (cents) 300 300 320
Discount (%) 38 33 32
Notes
1. The assets have been valued by using a combination of directors' valuation and/or external
professional valuers, where applicable.
2. The school operations have been valued using a combination of discounted cash flows and price-earnings
models. The school properties are carried at market value using directors' valuations for completed
schools and build costs incurred to date on school properties under construction.
3. The investment is carried at cost plus equity accounted profits and foreign currency gains/losses.
4. "Other" includes listed shares, held directly and indirectly, and other minor assets less
related debt.
5. Current year's cash includes cash from 100%-held investments. Where investments are not 100%
held their cash is included in their respective INAV.
Domicile and registered office
3rd Floor, Aria North Wharf, 42 Hans Strijdom Avenue, Foreshore, Cape Town, 8001
PO Box 15176, Vlaeberg, 8018, South Africa
Contact details
Tel: 021 421 5550
Directors
R Lockhart-Ross (Chairman)*#, AJ Shapiro (Chief Executive Officer), AL Winkler (Chief Financial Officer),
JP Fisher*#, K Getz*, A Groll, AM Louw*#, R Stumpf* * Non-executive # Independent
Secretary
JJ Vos
Transfer secretaries
Link Market Services South Africa (Pty) Limited
19 Ameshoff Street, Braamfontein, 2001
Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Auditor
Mazars
Published date
29 April 2019
Prepared by
The group interim financial results have been prepared under the supervision of the chief financial
officer, Mr AL Winkler CA (SA).
Date: 29/04/2019 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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