Share price: 314c JSE code:
BUY PRIVATE EDUCATION IS A MERE SLIVER of the current value of the mainly property-aligned portfolio of this small investment company. Still, there are several reasons why punters should look at the company as a private education play.
First and foremost, Trematon has a reputation as an astute investment company and is regarded as a smart allocator of capital. It would not take a tilt at private education if it did not think the investment could become a substantial part of the investment portfolio.
In terms of a straight-out value proposition, Trematon offers a comparatively affordable entry into private schooling, via its fledgling Generation schools, especially considering it trades at a discount to intrinsic net asset value. There is developmental risk, especially since Generation opened its first school in Sunningdale on Cape Town’s west coast only this year. The advantage is that the Generation model is able to cater for specific niches, so expanding the footprint will probably be through selected takeovers and partnerships and by securing a presence in smaller property nodes. Fretting over land-banking challenges should be placated by Trematon’s proven strength in real estate — remembering that Western Cape property guru Allan Groll is an executive director.
In addition, Trematon is small enough to ensure that any early successes in private schooling will be felt at bottom line and enhance the portfolio value markedly.