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Condensed unaudited interim results for the six months ended 31 August 2014
Zeder Investments Limited
Incorporated in the Republic of South Africa
(Registration number: 2006/019240/06)
JSE share code: ZED
ISIN number: ZAE000088431
("Zeder" or "the group")
Condensed unaudited interim results for the six months ended 31 August 2014
- Agri Voedsel transaction approved
- SOTP value increased to R7.15 per share (R10.3bn) as at 2 October 2014
- Recurring headline earnings increased by 78% to 16.4 cents per share
- Headline earnings increased by 116% to 16.0 cents per share
COMMENTARY
OVERVIEW
Zeder is an investor in the broad agribusiness industry. Its strategy to optimise the existing
investment portfolio delivered commendable results during the period under review.
During the period under review, Zeder made an offer to acquire all of the shares in Agri Voedsel not
already held by Zeder whereby Agri Voedsel shareholders were offered 16.2 Zeder shares for every one
Agri Voedsel share. This transaction was approved on 15 September 2014 and will be implemented on 20
October 2014. Upon completion, Zeder will own 100% of Agri Voedsel and the historical discount for its
effective Pioneer Foods investment will be removed. As purchase consideration, 463.6 million Zeder
shares will be issued to Agri Voedsel shareholders.
RESULTS
The two key benchmarks which Zeder believes to measure performance by are sum-of-the-parts ("SOTP")
value and recurring headline earnings per share.
SOTP
Zeder's SOTP value per share, calculated using the quoted market prices for all JSE-listed (including
the see-through market price for Agri Voedsel's investment in Pioneer Foods) and over-the-counter
("OTC") traded investments, and market-related valuations for unlisted investments, increased by 32%
to R6.93 as at 31 August 2014. Zeder's SOTP value per share as at 2 October 2014, calculated on the
basis that the Agri Voedsel transaction had been implemented, increased to R7.15.
28 Feb 14 31 Aug 14 2 Oct 14 *
Interest Interest Interest
Company % Rm % Rm % Rm
Agri Voedsel 47.4 2 187 48.6 3 191
Pioneer Foods 1.1 164 1.4 310 31.7 7 040
Kaap Agri ** 39.9 528 39.9 582 39.9 582
Capespan ** 72.1 777 71.1 1 463 71.1 1 463
Zaad 92.0 679 92.0 681 92.0 681
Chayton 76.7 560 76.6 560 76.6 560
Other 76 43 43
Capevin Holdings 2.7 177
Total investments 5 148 6 830 10 369
Cash and cash equivalents 376 329 281
Other net liabilities (365) (367) (330)
SOTP value 5 159 6 792 10 320
Number of shares in issue (million) 980.2 980.2 1 443.8
SOTP value per share (rand) 5.26 6.93 7.15
* Indicative calculation following the successful implementation of the Agri Voedsel transaction
** OTC trading platform closed on 31 July 2014
RECURRING HEADLINE EARNINGS
Zeder's consolidated recurring headline earnings is the sum of its effective interest in that of each
of its underlying investments. The result is that investments which Zeder does not equity account in
terms of accounting standards, are included in the calculation of consolidated recurring headline
earnings. This provides management and investors with a more realistic and simplistic way of evaluating
Zeder's earnings performance.
Audited Unaudited
28 Feb 14 31 Aug 13 31 Aug 14
12 months 6 months 6 months
Rm Rm Rm
Earnings analysis
Food, beverages and related services 239 80 178
Agri-related retail, trade and services 74 42 36
Agri-inputs 50 12 20
Agri-production (5) (10) (31)
Net interest, taxation and other income and expenses (7) (6) (6)
Management (base) fee (59) (28) (37)
Recurring headline earnings 292 90 160
Management (performance) fee (59) (26) (37)
Non-recurring headline earnings 20 8 33
Headline earnings 253 72 156
Non-headline items 38 32 (8)
Attributable earnings 291 104 148
Weighted average number of shares in issue (million) 979.8 979.3 980.2
Recurring headline earnings per share (cents) 29.8 9.2 16.4
Headline earnings per share (cents) 25.8 7.4 16.0
Attributable earnings per share (cents) 29.7 10.6 15.1
Recurring headline earnings per share increased by 78% to 16.4 cents, mainly due to improved
contributions from Agri Voedsel, Capespan, Zaad and Kaap Agri during the period under review, while
Chayton, a start-up business in its development phase, reported a loss. While the loss was in line with
expectations in US dollar terms, the weakening of the South African Rand had a negative impact on
Chayton's reported results. The overall earnings performance, however, is encouraging considering that
minimal earnings contributions were derived from Capevin, NWK, Suidwes and Overberg Agri following
their disposals.
Headline earnings per share increased by 116% to 16.0 cents.
Attributable earnings per share increased by 42% to 15.1 cents.
Agri Voedsel (Pioneer Foods)
Agri Voedsel is an unlisted investment holding company with its only investment a 30.3% economic
interest in Pioneer Foods. The latter remains Zeder's key strategic investment, representing more than
65% of its portfolio following implementation of the aforementioned Agri Voedsel transaction.
Pioneer Foods reported encouraging results for the six months ended 31 March 2014 with adjusted
headline earnings per share having increased by 58%.
Pioneer Foods' results are available at www.pioneerfoods.co.za.
Kaap Agri
Kaap Agri is an unlisted retail, trade and services group in business for 102 years, with more than
150 operating units throughout South Africa. It supplies a variety of products and services to the
agricultural sector and the general public.
Kaap Agri reported a 19% increase in headline earnings per share for the six months ended 31 March 2014.
Kaap Agri's results are available at www.kaapagri.co.za.
Capespan
Capespan is an unlisted fruit and logistics group with a history spanning more than 70 years. Its core
business activities are focused around the production, procurement, distribution and marketing of fruit
from more than 12 countries to customers in more than 60 countries around the world.
Capespan continued to deliver strong results with a 234% increase in recurring headline earnings per
share for the six months ended 30 June 2014.
Capespan's results are available at www.capespan.co.za.
Zaad
Zeder owns a 92% interest in Zaad, the holding company of Agricol and Klein Karoo Seed Marketing
("KKSM"). Agricol and KKSM are both established seed businesses operating in the South African, African
and select international markets, with Agricol's history spanning more than 50 years. It has offices
and research stations in, among others, South Africa, Zambia, Zimbabwe, Jordan and the Netherlands.
Zaad delivered satisfactory results with a 14% increase in recurring headline earnings per share for
the six months ended 31 August 2014.
Further information about Agricol and KKSM is available at www.agricol.co.za and
www.seedmarketing.co.za respectively.
Chayton Africa
Chayton Africa's vision is to invest in integrated grain-related agribusinesses across Southern Africa.
It currently owns large-scale commercial farming and milling operations in Zambia. Since 2012, the
company has managed to increase its productive farmland under irrigation from 420 hectares to 4 200
hectares, while also adding an additional 800 hectares of dry land only cropping during the period
under review. It continues to actively evaluate further development and acquisitive opportunities. The
addition of Mpongwe Milling, with dominant regional maize meal and wheat flour brands, has reduced
volatility in the investment. Although Chayton Africa remains in the development phase, its operational
performance is encouraging, but additional scale will be required. Zeder remains optimistic about this
investment as the demand for primary food in sub-Saharan Africa appears strong and sustainable.
Further information about Chayton Africa is available at www.chaytonafrica.com.
DISPOSALS
During the period under review, Zeder sold its remaining 2.7% interest in Capevin Holdings (Distell)
for a consideration of R193m.
PROSPECTS
Zeder remains actively engaged with its existing investments, while also continuously seeking new
opportunities outside of its current portfolio. We continue to believe that the agribusiness sector
offers rewarding investment opportunities, both locally and abroad.
DIVIDEND
It is Zeder's policy to only declare a final dividend at year-end.
APPOINTMENT OF LEAD INDEPENDENT DIRECTOR
In compliance with paragraphs 3.59 and 3.84(c) of the Listings Requirements of the JSE Ltd,
shareholders are hereby notified that Mr George Eksteen, an independent non-executive director,
has been appointed as Zeder's lead independent director with effective from 7 October 2014.
UNAUDITED CONDENSED INTERIM GROUP FINANCIAL STATEMENTS
CONDENSED GROUP INCOME STATEMENT
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Revenue 4 261.8 1 779.9 6 010.6
Cost of sales (3 578.5) (1 484.2) (5 134.6)
Gross profit 683.3 295.7 876.0
Income
Changes in fair value of biological assets 15.2 29.2 90.5
Investment income 34.1 30.7 64.4
Net fair value gains 39.4 66.0 144.0
Other operating income 9.4 2.0 8.9
Total income 98.1 127.9 307.8
Expenses
Management fee (note 3) (74.1) (54.3) (118.0)
Marketing, administration and other expenses (584.5) (266.7) (741.3)
Total expenses (658.6) (321.0) (859.3)
Income from associates and joint ventures
Share of profits of associates and joint ventures 178.6 105.2 218.0
Impairment of associates (0.1) (14.0) (21.4)
Loss on disposal of investment in associates (3.8)
Net income from associates and joint ventures 178.5 91.2 192.8
Profit before finance costs and taxation 301.3 193.8 517.3
Finance costs (68.0) (31.3) (86.0)
Profit before taxation 233.3 162.5 431.3
Taxation (67.9) (46.7) (97.1)
Profit for the period 165.4 115.8 334.2
Attributable to:
Owners of the parent 148.2 104.1 291.3
Non-controlling interests 17.2 11.7 42.9
165.4 115.8 334.2
Earnings per share (cents)
Recurring headline (basic and diluted) 16.4 9.2 29.8
Headline (basic and diluted) (note 4) 16.0 7.4 25.8
Attributable (basic and diluted) 15.1 10.6 29.7
Weighted average number of shares in issue (basic and diluted) (million) 980.2 979.3 979.8
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Profit for the period 165.4 115.8 334.2
Other comprehensive income for the period, net of taxation
Items that may be subsequently reclassified to profit or loss (61.9) 88.9 117.0
Currency translation adjustments (69.9) 98.0 157.4
Cash flow hedges (6.7) (15.4)
Reclassification of cash flow hedges 23.8
Fair value gains on investments 0.2 0.4
Reclassification of fair value gains upon disposal of investments (0.4) (0.7)
Share of other comprehensive income and equity movements of associates (9.1) 11.7 31.2
Reclassification of share of associates' other comprehensive income
and equity movements upon disposal (20.6) (55.9)
Items that will not be reclassified to profit or loss
Remeasurement of post-employment benefit obligations (4.6) 1.1
Total comprehensive income for the period 98.9 204.7 452.3
Attributable to:
Owners of the parent 56.6 162.0 361.6
Non-controlling interests 42.3 42.7 90.7
98.9 204.7 452.3
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Audited
Aug 14 Aug 13* Feb 14
Rm Rm Rm
Assets
Non-current assets 4 322.8 3 322.1 3 638.1
Property, plant and equipment 1 054.6 746.0 925.0
Intangible assets 570.8 246.5 375.8
Biological assets 139.8 134.0 118.0
Investment in ordinary shares of associates 1 997.2 1 857.2 1 821.8
Investment in preference shares of/loans granted to associates 25.3 54.5 18.2
Investment in ordinary shares of joint ventures 0.1 0.4 0.1
Loans granted to joint ventures 4.0 1.6
Deferred income tax assets 58.1 63.9 59.4
Employee benefits 35.5 29.0 33.1
Equity securities 356.6 124.1 206.5
Loans and advances 84.8 62.5 78.6
Current assets 3 277.5 2 279.9 2 989.2
Biological assets 63.7 60.6 83.4
Inventories 800.8 292.7 739.8
Trade and other receivables 1 676.7 1 336.9 1 127.2
Derivative financial assets 1.3
Current income tax receivables 25.5 4.4 22.7
Cash, money market investments and other cash equivalents 710.8 585.3 1 014.8
Non-current assets held for sale (note 6) 633.4 177.6
Total assets 7 600.3 6 235.4 6 804.9
Equity and liabilities
Ordinary shareholders' equity 3 621.2 3 409.6 3 606.9
Non-controlling interests 584.6 393.6 536.0
Total equity 4 205.8 3 803.2 4 142.9
Non-current liabilities 1 164.9 1 117.1 1 013.2
Borrowings 862.6 826.7 738.5
Deferred income tax liabilities 124.2 116.2 104.6
Employee benefits 131.4 127.7 124.4
Derivative financial liabilities 46.7 46.5 45.7
Current liabilities 2 229.6 1 315.1 1 648.8
Borrowings 1 037.6 505.6 459.8
Employee benefits 52.0 13.5 73.2
Trade and other payables 1 101.8 775.4 1 081.3
Derivative financial liabilities 15.2
Current income tax payables 38.2 20.6 19.3
Total liabilities 3 394.5 2 432.2 2 662.0
Total equity and liabilities 7 600.3 6 235.4 6 804.9
Net asset value per share (cents) 369.4 347.8 368.0
Tangible net asset value per share (cents) 311.2 322.7 329.6
Number of shares in issue (million) 980.2 980.2 980.2
* Reclassified as set out in note 1
CONDENSED GROUP STATEMENT IN CHANGES OF EQUITY
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Ordinary shareholders' equity at beginning of the period 3 606.9 3 283.5 3 283.5
Total comprehensive income for the period 56.6 162.0 361.6
Issue of shares 8.2 8.2
Transactions with non-controlling interests 1.8 (5.0) (7.3)
Dividend paid (44.1) (39.1) (39.1)
Ordinary shareholders' equity at end of the period 3 621.2 3 409.6 3 606.9
Non-controlling interests at beginning of the period 536.0 109.1 109.1
Total comprehensive income for the period 42.3 42.7 90.7
Transactions with non-controlling interests 21.4 255.0 349.4
Dividend paid (15.1) (13.2) (13.2)
Non-controlling interests at end of the period 584.6 393.6 536.0
Total equity 4 205.8 3 803.2 4 142.9
Dividend per share (cents) 4.5
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Cash (utilised by)/generated from operations (note 7) (319.8) (199.8) 300.6
Investment income 59.6 52.0 127.9
Finance cost and taxation paid (101.3) (41.6) (173.4)
Net cash flow from operating activities (361.5) (189.4) 255.1
Acquisition of associates (209.5) (185.6) (242.2)
Acquisition of subsidiary companies (note 5) (294.0) 55.0 (36.4)
Acquisition of equity securities (55.7) (8.6) (177.8)
Additions to property, plant and equipment (119.7) (49.0) (160.6)
Additions to intangible assets (40.7) (2.5) (16.2)
Proceeds from disposal of associates 4.0 91.7
Proceeds from disposal of equity securities 2.3 124.6
Proceeds from disposal of non-current assets held for sale 193.5 8.2 504.5
Proceeds from disposal of property, plant and equipment 2.0 14.0 53.9
Other (28.5) 3.2 47.9
Net cash flow from investment activities (548.6) (163.0) 189.4
Dividends paid to group shareholders (44.1) (39.1) (39.1)
Dividends paid to non-controlling interests (15.1) (13.2) (13.2)
Borrowings repaid (49.6) (304.1) (252.1)
Increase in borrowings 708.1 17.7 34.4
Other 7.3 502.4 41.6
Net cash flow from financing activities 606.6 163.7 (228.4)
Net (decrease)/increase in cash and cash equivalents (303.5) (188.7) 216.1
Exchange differences on cash and cash equivalents (0.5) 21.4 46.1
Cash and cash equivalents at beginning of the period 1 014.8 752.6 752.6
Cash and cash equivalents at end of the period 710.8 585.3 1 014.8
NOTES TO THE CONDENSED INTERIM GROUP FINANCIAL STATEMENTS
1. Basis of presentation and accounting policies
These condensed interim group financial statements have been prepared in accordance with the
recognition and measurement principles of International Financial Reporting Standards ("IFRS") as
issued by the International Accounting Standards Board, including IAS 34 Interim Financial
Reporting; the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee;
the Financial Reporting Pronouncements, as issued by the Financial Reporting Standards Council; the
requirements of the South African Companies Act, 71 of 2008, as amended; and the Listings
Requirements of the JSE Ltd.
The accounting policies applied in the preparation of these condensed interim group financial
statements are consistent in all material respects with those used in the prior financial year,
apart from the adoption of various revisions to IFRS which are effective for the financial year
ending 28 February 2015, none of which resulted in a material impact on the group's reported interim
results or disclosures.
Biological assets as at 31 August 2013 amounting to R134m were reclassified from current to
non-current assets. This resulted in previously reported current biological assets of R194.6m
decreasing to R60.6m, with the resultant increase in non-current biological assets. This
reclassification had no impact on previously reported amounts of profit, cash flow, equity, total
assets or liabilities.
Furthermore, the statement of cash flows for the six months ended 31 August 2013 were disaggregated
in order to provide greater clarity on the group's operating, investment and financing cash flows.
2. Preparation
These condensed interim group financial statements were compiled under the supervision of the group
financial director, Mr WL Greeff, CA (SA), and were not reviewed or audited by the group's external
auditor, PricewaterhouseCoopers Inc.
3. Management fee
Management fees are payable to PSG Group Ltd ("PSG Group"), Zeder's ultimate holding company, or its
nominee ("the Manager") in terms of a management agreement. In accordance with the management
agreement, the Manager provides all investment, administrative, advisory, financial and corporate
services to the Zeder group of companies.
The management fees payable consist of a base fee and a performance fee element. The base fee is
calculated at the end of every half-year as 1.5% p.a. (exclusive of VAT) of Zeder's volume weighted
average market capitalisation for that half-year. The performance fee is calculated at the end of
the financial year as 20% p.a. (exclusive of VAT) on Zeder's share price outperformance of the
GOVI-index yield plus 4%, adjusted for dividends.
4. Headline earnings
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Profit for the period attributable to owners of the parent 148.2 104.1 291.3
Non-headline items 8.3 (31.7) (38.8)
Gross amounts
Impairment of investment in associates 0.1 14.0 21.4
Net (gain)/loss on disposal in associates (4.0) 3.8
Fair value gain on step-up from associates and joint ventures to
subsidiaries (3.3) (40.7) (74.3)
Non-headline items of associates 8.1 (25.3) 11.6
Net gain on disposal of associates classified as non-current
assets held for sale (14.0)
Other 8.0 0.1 5.3
Non-controlling interests (0.7) 0.1 (0.1)
Taxation 0.1 20.1 7.5
Headline earnings 156.5 72.4 252.5
5. Acquisition of subsidiary companies
Mpongwe Milling (2009) Ltd ("Mpongwe Milling")
During April 2014 the group, through Chayton Africa, acquired the entire share capital of Mpongwe
Milling, maize and wheat mill operating in the Copperbelt province of Zambia, for a Zambian kwatcha
cash consideration equating to R307.6m. Mpongwe Milling compliments the group's existing farming
operations in Zambia and the acquisition provides the group with an opportunity to expand its entire
product offering across the value chain. Goodwill arose in respect of, inter alia, synergies
pertaining to the procurement and marketing functions of the mill and farming operations. The
accounting for Mpongwe Milling business combination is provisional.
Animalzone (Pty) Ltd ("Animalzone")
During July 2014 the group, through Zaad Holdings, acquired the remaining 50% shareholding not yet
held in Animalzone, previously a joint venture, for a nominal cash consideration of R1. Animalzone
manufactures seed-based pet foods and goodwill arose in respect of, inter alia, expected synergies
and growth potential. The accounting for Animalzone business combination is provisional.
The summarised assets and liabilities recognised at acquisition date were:
Mpongwe
Milling Animalzone Total
Rm Rm Rm
Property, plant and equipment 108.4 1.3 109.7
Biological assets 8.5 1.1 9.6
Deferred income tax assets 0.9 0.9
Inventories 26.5 0.6 27.1
Trade and other receivables 23.8 0.8 24.6
Cash, money market investments and other cash equivalents 13.6 13.6
Borrowings (6.6) (9.6) (16.2)
Deferred income tax liabilities (26.4) (0.3) (26.7)
Trade and other payables (4.2) (0.6) (4.8)
Current income tax payables (1.1) (1.1)
Total identifiable net assets/(liabilities) 142.5 (5.8) 136.7
Derecognition of investment in ordinary shares of joint ventures (0.1) (0.1)
Goodwill recognised 165.1 5.9 171.0
Total consideration 307.6 - 307.6
Cash consideration paid (307.6) (307.6)
Cash and cash equivalents acquired 13.6 13.6
Net cash outflow from subsidiaries acquired (294.0) - (294.0)
The aforementioned subsidiaries acquired does not contain any contingent consideration or
indemnification asset arrangements.
6. Non-current assets held for sale
Non-current assets held for sale as at 31 August 2013 consisted mainly of listed equity securities
in Capevin Holdings Ltd ("Capevin") and unlisted equity securities in NWK Ltd ("NWK") and Suidwes
Beherend (Pty) Ltd ("Suidwes"). The group disposed of its NWK and Suidwes equity securities and a
portion of its Capevin equity securities during the second six months of the year ended 28 February
2014, while the remaining Capevin equity securities were disposed of during the period under review
for cash consideration of R193.5m.
7. Cash (utilised by)/generated from operations
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Profit before taxation 233.3 162.5 431.3
Share of profits of associates and joint ventures (178.6) (105.2) (218.0)
Depreciation and amortisation 60.8 28.3 85.7
Changes in fair value of biological assets (15.2) (29.2) (90.5)
Net (profit)/loss on disposal of investments in associates (4.0) 3.8
Investment income (34.1) (30.7) (64.4)
Finance costs 68.0 31.3 86.0
Other non-cash items 74.4 (52.4) (121.3)
204.6 4.6 112.6
Change in working capital and other financial instruments (445.3) (147.0) 316.9
Additions to biological assets (79.1) (57.4) (128.9)
Cash (utilised by)/generated from operations (319.8) (199.8) 300.6
8. Financial instruments
8.1 Financial risk factors
The group's activities expose it to a variety of financial risks: market risk (including currency
risk, cash flow and fair value interest rate risk, and price risk), credit risk and liquidity risk.
The condensed interim group financial statements do not include all financial risk management
information and disclosures set out in the annual financial statements, and therefore they should
be read in conjunction with the group's annual financial statements for the year ended 28
February 2014. Risk management continues to be carried out by each major entity within the group
under policies approved by the respective boards of directors.
8.2 Fair value estimation
The information below analyses financial assets and financial liabilities, which are carried at
fair value, by level of hierarchy as required by IFRS 13. The different levels in the hierarchy are
defined below:
Level 1
The fair value of financial instruments traded in active markets is based on quoted market prices
at the reporting date. A market is regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency,
and those prices represent actual and regularly occurring market transactions on an arm's length
basis. The quoted market price used for financial assets held by the group is the current bid
price.
Level 2
Financial instruments that trade in markets that are not considered to be active but are valued
(using valuation techniques) based on quoted market prices, dealer quotations or alternative
pricing sources supported by observable inputs are classified within level 2. These include
over-the-counter traded derivatives. As level 2 investments include positions that are not traded
in active markets and/or are subject to transfer restrictions, valuations may be adjusted to
reflect illiquidity and/or non-transferability, which are generally based on available market
information. If all significant inputs in determining an instrument's fair value are observable,
the instrument is included in level 2.
Level 3
If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. Investments classified within level 3 have significant unobservable inputs, as
they trade infrequently.
The fair value of financial assets and liabilities carried at amortised cost approximates their
fair value, while those measured at fair value in the statement of financial position can be
summarised as follows:
Level 1 Level 2 Level 3 Total
Rm Rm Rm Rm
31 August 2014
Assets
Equity securities 310.0 46.6 356.6
Opening carrying value 41.7
Additions 2.2
Unrealised fair value gains 2.7
Liabilities
Derivative financial liabilities 46.7 46.7
Opening carrying value 45.7
Finance cost 1.7
Unrealised fair value gains (0.7)
31 August 2013
Assets
Equity securities 1.0 119.6 3.5 124.1
Non-current assets held for sale (note 6) 312.0 321.4 633.4
Closing balance 313.0 441.0 3.5 757.5
Opening carrying value
Additions 3.5
Liabilities
Derivative financial liabilities 46.5 46.5
Opening balance 45.7
Finance cost 0.8
28 February 2014
Assets
Derivative financial assets 1.0 0.3 1.3
Equity securities 163.8 1.0 41.7 206.5
Non-current assets held for sale (note 6) 177.0 0.6 177.6
Closing balance 341.8 1.9 41.7 385.4
Opening carrying value 97.5
Additions 8.4 3.5
Disposal (86.5) (3.5)
Unrealised fair value gains 20.5
Subsidiaries acquired 3.7
Transfer from level 2 (41.7) 41.7
Liabilities
Derivative financial liabilities 15.2 45.7 60.9
Opening balance 45.7
Finance cost 0.8
Unrealised fair value gains (0.8)
During the year ended 28 February 2014, following the decline in trading activities of the relevant
over-the-counter traded markets (i.e. less observable inputs), it was considered necessary to
transfer the entire balance of these unquoted equity securities from level 2 to level 3 of the fair
value hierarchy.
Non-current assets held for sale included assets measured at fair value, as set out in note 6,
which is based on the JSE-listed share price or other observable inputs.
9. Segmental reporting
The group are organised into four reportable segments, namely i) food, beverages and related
services, ii) agri-related retail, trade and services, iii) agri-inputs and iv) agri-production.
The segments represent different sectors in the broad agribusiness industry.
Headline earnings comprise recurring and non-recurring headline earnings. Recurring headline
earnings is calculated on a see-through basis. Zeder's recurring headline earnings is the sum of
its effective interest in that of each of its underlying investments. The result is that investments
which Zeder does not equity account or consolidate in terms of accounting standards, are included
in the calculation of recurring headline earnings.
Non-recurring headline earnings include equity securities' see-through recurring headline earnings
and the related net fair value gains/losses and dividend income (as recognised in the income
statement). Associates' and subsidiaries' one-off gains/losses are included in non-recurring
headline earnings.
Segmental income comprises revenue and investment income, as per the income statement.
SOTP is a key valuation tool used to measure Zeder's performance. The SOTP are calculated using
the quoted market prices for all JSE-listed (including the see-through market price for Agri
Voedsel's investment in Pioneer Foods) and over-the-counter ("OTC") traded investments, and
market-related valuations for unlisted investments. These values will not necessarily correspond
with the values per the statement of financial position since the latter are measured using the
relevant accounting standards which include historical cost and the equity accounting method.
The chief operating decision-maker (the executive committee) evaluates the following information
to assess the segments' performance:
Unaudited Audited
Aug 14 Aug 13 Feb 14
6 months 6 months 12 months
Rm Rm Rm
Recurring headline earnings
Food, beverages and related services 177.5 80.3 239.3
Agri-related retail, trade and services 35.9 42.0 74.1
Agri-inputs 19.8 11.5 49.6
Agri-production (30.5) (9.9) (4.8)
Net interest, taxation and other income and expenses (5.4) (6.0) (7.1)
Management (base) fee (37.0) (28.2) (59.0)
Recurring headline earnings 160.3 89.7 292.1
Management (performance) fee (37.0) (26.1) (59.0)
Other non-recurring headline earnings, net of taxation 33.2 8.8 19.4
Headline earnings 156.5 72.4 252.5
Non-headline items (note 4) (8.3) 31.7 38.8
Attributable earnings 148.2 104.1 291.3
SOTP segmental analysis:
Segments
Food, beverages and related services 4 963.9 3 101.1 3 340.8
Agri-related retail, trade and services 624.6 977.0 567.9
Agri-inputs 681.0 368.9 678.8
Agri-production 560.4 293.3 560.4
Cash and cash equivalents 329.0 216.6 376.1
Other net liabilities (366.5) (324.3) (365.4)
SOTP value 6 792.4 4 632.6 5 158.6
Income segmental analysis:
Food, beverages and related services 3 721.0 1 592.1 5 442.6
Revenue 3 697.6 1 577.2 5 407.3
Investment income 23.4 14.9 35.3
Agri-related retail, trade and services
Investment income 3.4 3.5
Agri-inputs 406.3 114.8 467.8
Revenue 402.9 112.8 465.4
Investment income 3.4 2.0 2.4
Agri-production 161.2 90.4 137.9
Revenue 161.2 89.9 137.9
Investment income 0.5
Unallocated investment income (mainly head office interest income) 7.4 9.9 23.2
IFRS Revenue 4 295.9 1 810.6 6 075.0
10. Events subsequent to the reporting date
Subsequent to period end, the following corporate action took place:
- On 15 September 2014, the proposed scheme of arrangement ("Scheme") between Agri Voedsel Ltd
("AVL") and its shareholders was approved, in terms of which Zeder will acquire all the shares
in AVL not already held by Zeder. AVL shareholders will receive 16.2 newly issued JSE-listed
Zeder ordinary shares for every 1 unlisted AVL share disposed of in terms of the Scheme. Upon
implementation of the transaction on 20 October 2014, the Zeder group will hold a direct
economic interest of 31.7% in Pioneer Foods Group Ltd ("Pioneer Foods").
- The board of directors of Pioneer Foods previously resolved to unbundle its 100% shareholding in
Quantum Foods Ltd ("Quantum Foods") to Pioneer Foods' shareholders. Quantum Foods' ordinary
shares listed on the JSE Ltd on 6 October 2014 and the unbundling will become effective on 10
October 2014. Following the implementation of both aforementioned transactions, Zeder will hold
a direct economic interest of approximately 31% in Quantum Foods.
DIRECTORS:
JF Mouton (Chairman), N Celliers* (CEO), WL Greeff* (FD), WA Hanekom#, AE Jacobs, PJ Mouton,
GD Eksteen#, CA Otto#
7 October 2014
* executive
# independent non-executive
APPOINTED MANAGER, SECRETARY AND REGISTERED OFFICE:
PSG Corporate Services (Pty) Ltd
1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600;
PO Box 7403, Stellenbosch, 7599
TRANSFER SECRETARY:
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001;
PO Box 61051, Marshalltown, 2107
SPONSOR:
PSG Capital
AUDITOR:
PricewaterhouseCoopers Inc.
Date: 07/10/2014 02:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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