TREMATON

Financial Mail - Investors Monthly - - Opening Bell -

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.

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