Our opinion on the current state of TREMATON(TMT)

Trematon (TMT) is an investment holding company based primarily in the Western Cape, with a diverse portfolio that includes subsidiaries, joint ventures, and associate companies. The firm initially focused largely on property investments but has since broadened its scope to include various sectors, including both listed and unlisted shares. Among its notable assets is Club Mykonos, a well-known leisure destination.

In its financial results for the year ending 31st August 2023, Trematon reported a 13% increase in revenue. However, the company saw a significant drop in headline earnings per share (HEPS), which fell by 59%. Additionally, the net asset value (NAV) of the company slightly decreased by 1% to 366c per share. The company highlighted that Generation Education and Aria Property Group constituted 63% of the group’s investment net asset value (INAV). Over the past 11 years, Trematon has returned approximately R240 million to its shareholders through distributions and share buy-backs, underscoring its commitment to shareholder value.

Looking ahead, Trematon issued a trading statement for the six months to 29th February 2024, estimating that HEPS would decline further by between 66.1% and 68.8%. Despite these challenges, the company's daily trading volume is relatively low, with only about R41,000 worth of shares changing hands each day, making it a less practical choice for private investors due to liquidity concerns.

Nevertheless, Trematon's expanding involvement in the education sector, particularly through Generation Education, presents potential growth opportunities post-pandemic. This shift towards education could prove to be a strategic move, aligning with broader societal needs and potentially creating a more robust business model in the longer term. This makes Trematon an interesting consideration for investors looking at niche markets and education sector growth in a post-pandemic environment.