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Transformational transactions concluded that have potential to reshape future NAV and growth trajectory

Posted On Thursday, 20 April 2017 10:59 Published by
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JSE listed Trematon Capital Investments Limited (“Trematon”, “the Group” or “the Company”), the Western Cape focused actively managed Investment Holding Company, today announced solid financial results for the six months to 28 February 2017.  


Trematon Chief Executive, Arnold Shapiro commented: 

“The group’s performance was pleasing with the benefits of a number of our major investment projects starting to be seen. 

“Our strategic focus during the period was on two transformative transactions that have the potential to reshape our NAV and growth trajectory in years to come. 

“The sale of our 30% interest in Mykonos Casino and the purchase of the R614.1 million portfolio of properties from Redefine Group position us well to unlock future value through organic growth and to execute on any new opportunities that may arise.” 

During the year under review Trematon’s net asset value per share increased 44 cents per share to 299 cents per share, owing mainly to the sale of the 30% interest in Mykonos Casino. Intrinsic net asset value per share declined by 7 cents per share to 361 cents per share due to adjustments in the valuations of certain commercial and residential properties and once-off school setup costs.  

Group revenues increased by 26% to R79.8 million of which the largest component is rental income. Taking into account the sale of the Mykonos Casino shares, net profit after tax amounted to R104.5 million (2016: R27.8 million). Accordingly, earnings per share rose to 46.4 cents (2016: 8.9 cents) and headline earnings per share increased to 1.8 cents (2016: loss of 2.3 cents).  

*The Board of Trematon believes that intrinsic net asset value offers a realistic measure 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. 

“The investments made during the period provide scope for us to grow our Intrinsic NAV and deliver on our target of a 20% internal rate of return over time whilst increasing the annuity income component of the group. 

“Generation Education is showing encouraging growth having contributed more than 10% to group revenues. The sector has good inherent organic growth prospects and we are committed to growing the business as fast as possible while ensuring that teacher quality and service delivery to students is maintained and continuously improved.” 

“The Aria portfolio which is set to double in size provides a significant pipeline for value added repurposing or redevelopment whilst Club Mykonos Langebaan which has shown proven demand for plots and holiday units, has potential for several years of development.” concluded Shapiro. 

Club Mykonos Langebaan (“CML”) is the original development company for the Club Mykonos resort in Langebaan which has become a highly desirable holiday and residential location having benefited from infrastructure development and good economic growth in the Langebaan region.

During the period, CML sold its 30% interest in the Mykonos Casino for R190 million to Tsogo Sun Holdings Limited as well as two erven known as “Hobie Beach” for R30 million which is subject to shareholder approval. Marina Village the latest and most upmarket residential development on the resort is sold out with all 25 of the luxury waterfront units to be handed over in April 2017. In light of the proven demand for plots and holiday units, future developments are currently in various stages of planning. There is sufficient well-located, zoned development land on the resort for several years of development. 

Aria Property Group (“Aria”), continued to pursue its strategy of acquiring, adding value to and managing its predominantly Western Cape-focused commercial property portfolio. During the period, Aria acquired a R614.1 million portfolio of commercial, retail and industrial properties from the Redefine Group and embarked on certain smaller demand-driven redevelopments.

The Redefine portfolio is expected to be transferred during the second half of the financial year and will more than double the portfolio size, exceeding R1 billion of high-quality institutional grade assets. In anticipation of this, Aria has increased its staff headcount and skills base to ensure that value can be extracted from the overall portfolio which provides material potential for value improvement. 

Resi Investment Group (“Resi”) has a stable portfolio of desirable rental properties in the Western Cape. The joint venture at Sanddrift (Quest Corsair apartments) comprising 126 newly developed residential units is fully let and trading in line with expectations. Further acquisitions have been made in the Woodstock Hub joint venture and a sizeable development pipeline has been secured. Further sites are actively being sought. 

Generation Education showed pleasing growth with the first school site in Sunningdale (age 18 months to school exit) oversubscribed and far exceeded expectations. The school’s capacity is currently being increased from 250 students to 480 students through a phase two expansion.

The second operational site in Hermanus was acquired and converted to a Generation Education school in January 2017 with phase one of the expansion of the school currently under way. Upon completion the school will have capacity for 255 learners, with a possible further expansion to 500 learners. Two additional sites have been purchased, one an operational school not yet under the Generation Education umbrella, and a second site which is subject to a rezoning application process that is under way. Further sites are in various stages of investigation and negotiation. 

Last modified on Thursday, 20 April 2017 12:39
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