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ZEDER INVESTMENTS LIMITED - Condensed Unaudited Results For The Six Months Ended 31 August 2018

Release Date: 09/10/2018 14:50
Code(s): ZED     PDF:  
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Condensed Unaudited Results For The Six Months Ended 31 August 2018

Zeder Investments Limited
Incorporated in the Republic of South Africa
(Registration number: 2006/019240/06)
JSE Ltd ("JSE") share code: ZED
ISIN number: ZAE000088431
("Zeder" or "the group")

CONDENSED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018 

HIGHLIGHTS
- SOTP value per share R6,23 as at 1 October 2018
- Recurring headline earnings increased by 158% to 9,8 cents per share
- Headline earnings increased by 605% to 30,3 cents per share

OVERVIEW
Zeder is an investor in the broad agribusiness industry, with a specific focus on the food and beverage sectors. Its underlying investment portfolio was valued at
R12,52bn on 31 August 2018. Zeder's 27,0% interest in Pioneer Foods remains its largest investment, representing 49,1% (28 February 2018: 53,9%) of the portfolio.

STRATEGY 
Zeder is a long-term investor that owns large, strategic interests in companies and plays an active role therein. It assists with the determination of appropriate
long-term strategies, optimal allocation of capital and ongoing measurement and monitoring of performance. During the period under review, it dedicated most of
its efforts to existing investments while evaluating select new and adjacent opportunities. Zeder continues to drive for additional growth from its existing 
investment platforms while aiming to add to its portfolio when opportune.

PERFORMANCE OF PORTFOLIO COMPANIES 
A significant recovery in earnings was delivered by the majority of Zeder's investee companies during the period under review despite continuing to trade under
challenging macro conditions. Apart from Agrivision Africa, all portfolio companies managed to stabilise or reverse the corresponding lower levels of profitability
reported in the results for the previous interim period. In addition to the strong improvement in recurring headline earnings, a substantial increase in headline
earnings was recorded as a result of the upward fair value adjustment relating to Capespan's interest in its Chinese investment, Joy Wing Mau (previously known
as Golden Wing Mau).

From a valuation point of view, the share prices of Zeder and its investee companies were suppressed during the period under review resulting in a decline in
Sum-of-the-Parts ("SOTP") valuations. The overall market sentiment towards Zeder and the sector it operates in continues to be negative following the volatile
and challenging trading conditions previously reported on. While challenges remain, Zeder believes the underlying operating environment will continue to improve.

The first six months of Zeder's earnings traditionally represents the lesser half of its annual earnings as this period reflects the annual input-cost cycle 
associated with many of its agriculture investments as well as the softer half of the annual consumer sales and spending cycles associated with its other 
investments. Year-on-year comparisons at the interim stage of reporting may therefore reflect seasonal variances.

FINANCIAL RESULTS 
The two key benchmarks which Zeder believes to measure performance by are SOTP value per share and recurring headline earnings per share.

SOTP
Zeder's SOTP value per share, calculated using the quoted market prices for all JSE-listed investments, and market-related valuations for unlisted investments,
decreased by 15,0% during the reporting period to R6,67 as at 31 August 2018. At the close of business on Monday, 1 October 2018, Zeder's SOTP value per share
was R6,23.

                                                                          28 Feb 2018                31 Aug 2018               1 Oct 2018
                                                                       Interest                   Interest                  Interest           
Company                                                                     (%)             Rm         (%)           Rm          (%)           Rm 

Pioneer Foods                                                              27,0          7 660        27,0        6 145         27,0        5 428
Capespan                                                                   97,5          2 259        96,9        2 167         96,9        2 167
Zaad                                                                       93,2          2 043        93,5        2 235         93,5        2 235
Kaap Agri                                                                  40,9          1 376        40,9        1 198         40,9        1 183
Agrivision Africa                                                          56,0            591        56,0          493         56,0          493
Quantum Foods                                                              27,7            246        29,3          259         29,3          259
Other                                                                                       33                       23                        21

Total investments                                                                       14 208                   12 520                    11 786
Cash and cash equivalents                                                                  111                      272                       266
Other net assets                                                                           108                      111                       117
Debt funding                                                                           (1 000)                  (1 500)                   (1 510)
 
SOTP value                                                                              13 427                   11 403                    10 659
   
Number of shares in issue (net of treasury shares) (million)                             1 710                    1 710                     1 710

SOTP value per share (rand)                                                               7,85                     6,67                      6,23

Note: Zeder's live SOTP is available at www.zeder.co.za.

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
in which Zeder holds less than 20% and are generally not equity accountable in terms of accounting standards, are included in the calculation of consolidated
recurring headline earnings, whilst once-off (i.e. non-recurring) income and expenses are excluded. This provides management and investors with a more realistic
and transparent way of evaluating Zeder's earnings performance.

                                                                                                   Audited               Unaudited
                                                                                                 28 Feb 18    31 Aug 17                 31 Aug 18
                                                                                                 12 months     6 months       Change     6 months
                                                                                                        Rm           Rm            %           Rm
            
Recurring headline earnings from investments                                                           576          115                       231
Net interest, taxation and other income and expenses                                                 (102)         (50)                      (64)
               
Recurring headline earnings                                                                            474           65          157          167
Non-recurring headline earnings                                                                       (49)            9                       348
               
Headline earnings                                                                                      425           74          596          515
Non-headline items                                                                                   (171)           53                      (51)
            
Attributable earnings                                                                                  254          127          265          464
            
Weighted average number of shares in issue (net of treasury shares) (million)                        1 717        1 722                     1 702

Recurring headline earnings per share (cents)                                                         27,6          3,8          158          9,8
Headline earnings per share (cents)                                                                   24,8          4,3          605         30,3
Attributable earnings per share (cents)                                                               14,8          7,4          269         27,3

Recurring headline earnings per share increased by 158% to 9,8 cents mainly due to a strong recovery in earnings from most of its underlying investee companies
compared to the previous period.

Headline earnings per share increased by 605% to 30,3 cents mainly as a result of the above and due to the upward fair value adjustment of the investment in
Joy Wing Mau.

Attributable earnings per share increased by 269% to 27,3 cents, a lower percentage than headline earnings per share, mainly due to an impairment in Agrivision
Africa goodwill in the current period in contrast to a non-headline profit on disposal of underlying business operations at a subsidiary level during the previous period.

NOTEWORTHY TRANSACTIONS
As detailed on the JSE Limited's Stock Exchange News Service ("SENS") on 21 September 2018, Capespan Group Limited, a subsidiary of Zeder, has entered into share
transfer agreements for the sale of its entire shareholding in the Joy Wing Mau Group in China for an aggregate purchase consideration of ¥566m, amounting to
approximately R1,18bn, at exchange rates at the time. If the disposal is implemented as anticipated, this would represent a very successful investment that would
enable Zeder to inject growth capital into the core fruit and logistics divisions of Capespan, improving debt levels while also providing Zeder with improved cash
resources at a group level.

PROSPECTS AND OUTLOOK
The climatic cycle within which our companies operate has improved but the South African and regional economies and investment climate remains constrained.
The recent positive changes should contribute to improved conditions in the medium term. Zeder remains committed and actively involved with its
underlying portfolio of companies. It continues to invest in organic growth opportunities within while actively seeking new investments to compliment the portfolio.
We believe that, despite inevitable cyclicality, investing in the agribusiness industry should offer attractive long-term returns and the strength of the our companies
and management teams, combined with a defensive portfolio mix, should contribute to the continued sustainability of results. We believe that the company and its
shareholders will benefit from same.

WEBCAST  
Shareholders are reminded that Zeder will be hosting a webcast and a conference call at 15h00 (South African time) on Wednesday, 10 October 2018 to present the results 
to shareholders and the market. To register for the webcast or the conference call, please follow the below links.  
 
Webcast details: 
- View and listen mode, with a Q&A facility 
- Link: www.diamondpass.net/zeder181010 
 
Conference call details: 
- Listen-only mode, with an interactive Q&A at the end 
- Link: www.diamondpass.net/1846770 

DIVIDEND
It is currently Zeder's policy to only declare a final dividend at year-end.

CONDENSED CONSOLIDATED INCOME STATEMENT

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
                           
Revenue                                                                                                           3 408        4 440        8 485
Cost of sales                                                                                                   (2 760)      (3 863)      (6 996)
                           
Gross profit                                                                                                        648          577        1 489

Income                                                                                                                                            
Change in fair value of biological assets                                                                            31           39          195
Investment income                                                                                                    42           33           77
Net fair value gains                                                                                                479           17           45
Other operating income                                                                                               12           98          116
                           
Total income                                                                                                        564          187          433

Expenses                                                                                                                                          
Marketing, administration and other expenses                                                                      (826)        (738)      (1 671)
                           
Total expenses                                                                                                    (826)        (738)      (1 671)

Net income from associates and joint ventures                                                                                                     
Share of profits of associates and joint ventures                                                                   324          226          472
Impairment of associates and joint ventures (note 2)                                                                                          (1)
Net loss on dilution of interest in associates (note 2)                                                            (10)         (20)         (29)
                           
Net income from associates and joint ventures                                                                       314          206          442
                           
Profit before finance costs and taxation                                                                            700          232          693
Finance costs                                                                                                     (150)        (144)        (289)
                           
Profit before taxation                                                                                              550           88          404
Taxation                                                                                                           (88)           26        (196)
                           
Profit for the period                                                                                               462          114          208 
                                                                                                                                                                     
Profit attributable to:                                                                                                                          
  Owners of the parent                                                                                              464          127          254
  Non-controlling interests                                                                                         (2)         (13)         (46)
                           
                                                                                                                    462          114          208
                           
EARNINGS PER SHARE AND NUMBER OF SHARES IN ISSUE                                                                                                  
                           
Earnings per share (cents)                                                                                                                        
  Recurring headline                                                                                                9,8          3,8         27,6
  Headline (basic) (note 2)                                                                                        30,3          4,3         24,8
  Headline (diluted)                                                                                               29,2          3,8         23,7
  Attributable (basic)                                                                                             27,3          7,4         14,8
  Attributable (diluted)                                                                                           26,2          6,8         14,0

Number of shares (million)                                                                                                                       
  In issue                                                                                                        1 715        1 731        1 715
  In issue (net of treasury shares)                                                                               1 702        1 725        1 702
  Weighted average                                                                                                1 702        1 722        1 717
  Diluted weighted average                                                                                        1 703        1 724        1 719

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
 
Profit for the period                                                                                               462          114          208
Other comprehensive income for the period, net of taxation                                                           57           33         (16)
 
  Items that may be reclassified to profit or loss                                                                                               
    Currency translation adjustments                                                                                109         (11)        (100)
    Share of other comprehensive income of associates and joint ventures                                           (48)           31           64
  Items that may not be reclassified to profit or loss                                                                                           
    (Losses)/gains from changes in financial and demographic assumptions of post-employment
    benefit obligations                                                                                             (4)           13           20

Total comprehensive income for the period                                                                           519          147          192

Attributable to:                                                                                                                                 
  Owners of the parent                                                                                              504          167          257
  Non-controlling interests                                                                                          15         (20)         (65)
 
                                                                                                                    519          147          192

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                                     Rm           Rm           Rm
                                   
Assets 
                                                                                                                                          
Non-current assets                                                                                               10 020       10 392       10 298
                                   
Property, plant and equipment                                                                                     1 704        1 624        1 626
Intangible assets                                                                                                   638          675          606
Biological assets (bearer plants)                                                                                   413          397          406
Biological assets (agricultural produce)                                                                             11                          
Investment in ordinary shares of associates and joint ventures                                                    6 812        7 180        6 636
Loans to associates and joint ventures                                                                              170          235          136
Equity securities                                                                                                    38           45          688
Loans and advances                                                                                                   80          113          100
Deferred income tax assets                                                                                          112           85           61
Employee benefits                                                                                                    42           38           39
                                   
Current assets                                                                                                    3 845        3 537        3 103
                                   
Biological assets (agricultural produce)                                                                             70           71          152
Inventories                                                                                                       1 367        1 160        1 286
Loans and advances                                                                                                   47           28           38
Trade and other receivables                                                                                       1 849        1 836        1 274
Current income tax assets                                                                                            27           38           27
Cash, money market investments and other cash equivalents                                                           485          404          326
                                   
Non-current assets held for sale (note 5)                                                                         1 185           19            7
                                   
Total assets                                                                                                     15 050       13 948       13 408
                                   
Equity and liabilities 
                                                                                                                            
Ordinary shareholders' equity                                                                                     8 561        8 311        8 269
Non-controlling interests                                                                                           342          370          327
                                   
Total equity                                                                                                      8 903        8 681        8 596
                                   
Non-current liabilities                                                                                           2 987        1 265        2 276
                                   
Deferred income tax liabilities                                                                                     359           83          222
Borrowings                                                                                                        2 500        1 039        1 939
Derivative financial liabilities                                                                                     26           42           24
Employee benefits                                                                                                   102          101           91
                                   
Current liabilities                                                                                               3 160        4 002        2 536
                                   
Borrowings                                                                                                        1 779        2 669        1 428
Derivative financial liabilities                                                                                     14                        15
Trade and other payables                                                                                          1 268        1 247          994
Current income tax liabilities                                                                                       32           27           34
Employee benefits                                                                                                    67           59           65
                                   
Total liabilities                                                                                                 6 147        5 267        4 812
                                   
Total equity and liabilities                                                                                     15 050       13 948       13 408
                                                                                                                                                                                   
Net asset value per share (cents)                                                                                 503,0        481,8        485,8
Tangible asset value per share (cents)                                                                            465,5        442,7        450,2

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                                                    Unaudited              Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
                               
Ordinary shareholders' equity at beginning of the period                                                          8 247        8 291        8 291
                               
  Previously reported                                                                                             8 269        8 291        8 291
  Adjustment due to initial application of IFRS 9 (note 1.1)                                                       (22)                         
                               
Total comprehensive income for the period                                                                           504          167          257
Shares purchased and cancelled                                                                                                               (94)
Net movement in treasury shares                                                                                                    2         (23)
Transactions with non-controlling interests                                                                        (11)           37           18
Other movements                                                                                                       9            4           10
Dividends paid                                                                                                    (188)        (190)        (190)
                               
Ordinary shareholders' equity at end of the period                                                                8 561        8 311        8 269

Non-controlling interests at beginning of the period                                                                325          407          407
                               
  Previously reported                                                                                               327          407          407
  Adjustment due to initial application of IFRS 9 (note 1.1)                                                        (2)                          
                               
Total comprehensive income for the period                                                                            15         (20)         (65)
Shares issued                                                                                                        10           10            8
Transactions with non-controlling interests                                                                          13         (12)          (5)
Other movements                                                                                                                    2            2
Dividends paid                                                                                                     (21)         (17)         (20)
                               
Non-controlling interests at end of the period                                                                      342          370          327
                               
Total equity                                                                                                      8 903        8 681        8 596
                               
Dividend per share (cents)                                                                                                                   11,0

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
                             
Cash (utilised by)/generated from operations (note 3)                                                             (246)        (232)          267
Investment income                                                                                                   121          108          342
Finance cost and taxation paid                                                                                    (178)        (132)        (297)
                             
Cash flow from operating activities                                                                               (303)        (256)          312

Acquisition of subsidiary (note 4)                                                                                 (41)                          
Cash acquired from acquisition of subsidiary                                                                                                    1
Proceeds from disposal of subsidiaries/subsidiaries' operations                                                       4           27           27
Acquisition of associates and joint ventures                                                                                   (172)        (183)
Loans granted to associates and joint ventures                                                                     (31)          (3)         (52)
Additions to property, plant and equipment                                                                         (81)         (94)        (213)
Proceeds from disposal of property, plant and equipment                                                               1            2           25
Additions to intangible assets                                                                                     (34)         (36)         (97)
Acquisition of equity securities                                                                                                              (6)
Proceeds from disposal of equity securities                                                                           5                         9
Other                                                                                                                58           16           76
                             
Cash flow from investing activities                                                                               (119)        (260)        (413)

Capital contributions by non-controlling interests                                                                    1            4            4
Shares purchased and cancelled                                                                                                               (94)
Purchase of treasury shares                                                                                                                  (27)
Treasury shares sold                                                                                                               2            5
Dividends paid to group shareholders                                                                              (188)        (190)        (190)
Dividends paid to non-controlling interests                                                                        (21)         (17)         (20)
Borrowings repaid                                                                                                 (183)        (160)      (1 333)
Borrowings drawn                                                                                                    962          869        1 660
Other                                                                                                                           (17)         (10)
                             
Cash flow from financing activities                                                                                 571          491          (5)
                              
Net increase/(decrease) in cash and cash equivalents                                                                149         (25)        (106)
Exchange differences on cash and cash equivalents                                                                    10            7           10
Cash and cash equivalents at beginning of the period                                                                326          422          422
                              
Cash and cash equivalents at end of the period                                                                      485          404          326

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION AND ACCOUNTING POLICIES

      These condensed consolidated interim 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.

      The condensed consolidated interim financial statements do not include all of the information required for full consolidated annual financial statements and
      should be read in conjunction with the consolidated annual financial statements for the year ended 28 February 2018.

      The accounting policies applied in the preparation of these condensed consolidated interim financial statements are in terms of IFRS and consistent in all
      material respects with those used in the prior year's consolidated annual financial statements and includes the adoption of the new standard IFRS 9 Financial
      Instruments (refer note 1.1). The group adopted other various revisions to IFRS which were effective for its financial year ending 28 February 2019 however,
      these revisions have not resulted in material changes to the group's reported financial interim results or disclosures.

      In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the group's accounting
      policies and the key sources of estimation uncertainty were similar to those disclosed in the consolidated annual financial statements for the year ended
      28 February 2018.

1.1   Adoption of IFRS 9 Financial Instruments

      IFRS 9 Financial Instruments is the new standard governing the classification, recognition and measurement of financial instruments, and replaces
      IAS 39 Financial Instruments: Recognition and Measurement. The six-month period ended 31 August 2018 is the first period during which IFRS 9 was applied,
      thus the group transitioned to IFRS 9 on 1 March 2018. IFRS 9 was generally adopted without restating comparative information, thus any differences in
      the carrying amounts of financial instruments will be made to opening retained earnings as at the start of the current financial year, in accordance with the
      new standard's transitional arrangements. The reclassifications and the adjustments arising from the new impairment rules are therefore not reflected in the
      statement of financial position as at 28 February 2018, but are recognised in the opening statement of financial position on 1 March 2018.

      Classification and recognition:

      IFRS 9, inter alia, replaces the multiple classification and measurement models in IAS 39 with a single model that has only two categories: amortised cost and
      fair value. On 1 March 2018 (the date of initial application of IFRS 9), the group's management has assessed which business models apply to the financial
      assets and financial liabilities held by the group and has classified its financial instruments into the appropriate IFRS 9 categories. There were no effects with
      regards to the changes in categories of financial assets and financial liabilities.

      Change in measurement:

      IFRS 9 establishes a new approach for loans and receivables, including trade and other receivables - an "expected loss" model that focuses on the risk that
      a loan or trade debtor will default rather than whether a loss has been incurred. The group applies the IFRS 9 simplified approach to measuring expected
      credit losses which uses a lifetime expected loss allowance for all loans and receivables.

      The group has four types of financial assets that are subject to IFRS 9's new expected credit loss model: loans to associates and joint ventures; loans and
      advances; trade and other receivables; and cash and cash equivalents. The group was required to revise its impairment methodology under IFRS 9 for each
      of these classes of assets. The impact of the change in impairment methodology on the group's retained earnings and equity is disclosed in the table below.
      While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.

      The following table shows the adjustments recognised for each individual line item. Line items that were not affected by the changes have not been included.
      As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided.
  
                                                                                                                          Adjustment                
                                                                                                                                 due
                                                                                                             Previously   to initial             
                                                                                                               reported  application     Restated
                                                                                                              28 Feb 18    of IFRS 9     1 Mar 18
      Statement of financial position (extract)                                                                      Rm           Rm           Rm
                        
      Assets
                                                                                                                                           
      Investment in ordinary shares of associates and joint ventures(1)                                           6 636          (3)        6 633
      Loans to associates and joint ventures                                                                        136          (2)          134
      Loans and advances                                                                                            138          (1)          137
      Deferred income tax assets                                                                                     61            4           65
      Trade and other receivables                                                                                 1 274         (22)        1 252
                            
      Total assets                                                                                                8 245         (24)        8 221

      Equity and liabilities                                                                                                                     

      Ordinary shareholders' equity                                                                               8 269         (22)        8 247
      Non-controlling interests                                                                                     327          (2)          325
                            
      Total equity                                                                                                8 596         (24)        8 572
  
      (1) IFRS 9 also has an impact on the financial assets and liabilities of the group's underlying associates and joint ventures. The equity method of accounting applied in 
          terms of IAS 28 Investments in Associates and Joint Ventures requires the group to account for its share of post-acquisition movements in other comprehensive income 
          and other equity movements are recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. Due to the 
          aforementioned, an estimation calculation was performed on the adjustment due to the initial application of IFRS 9 on the underlying associates and joint ventures 
          financial assets and liabilities.

2.    HEADLINE EARNINGS
      
                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
                      
      Profit for the period attributable to owners of the parent                                                    464          127          254
      Non-headline items                                                                                             51         (53)          171
                      
      Gross amounts                                                                                                                                
         Profit on disposal of subsidiaries' operations                                                                         (80)         (85)
         Net loss on dilution of interest in associates                                                              10           20           29
         Impairment of associates and joint ventures                                                                                            1
         Fair value gain resulting from transfer of associate to equity security                                                             (15)
         Non-headline items of associates and joint ventures                                                        (9)          (7)            7
         Impairment of intangible assets and goodwill                                                                52            7          123
         Net loss on sale and impairment of property, plant and equipment                                           (1)            4           10
         Other                                                                                                      (1)            1          (1)
      Non-controlling interests                                                                                                    2         (49)
      Taxation                                                                                                                                151
                      
      Headline earnings                                                                                             515           74          425

      During the period under review, Zeder impaired the goodwill relating to the investment in Agrivision Africa as a result of tough trading conditions in Zambia.
      During the previous period under review, the impairment related to computer software at a restructured United Kingdom operation, intellectual property at
      Klein Karoo Seed Marketing, where there is no foreseeable future commercialisation of the specific seed line, and goodwill at Mpongwe Milling, following
      two consecutive loss-making years.

      During the previous period under review, the group, through Capespan Group Limited ("Capespan") merged its Asian operations with Golden Wing Mau to
      form JWM Asia and therefore 70% of its business operations were sold to JWM Asia and Capespan retained a 30% shareholding in JWM Asia.

3.    CASH (UTILISED BY)/GENERATED FROM OPERATIONS

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
                            
      Profit before taxation                                                                                        550           88          404
      Investment income                                                                                            (42)         (33)         (77)
      Finance costs                                                                                                 150          144          291
      Depreciation and amortisation                                                                                 102           98          203
      Changes in fair value of biological assets                                                                   (31)         (39)        (195)
      Net fair value gains                                                                                        (474)                      (43)
      Profit on disposal of subsidiaries' operations                                                                            (80)         (85)
      Share of profits of associates and joint ventures                                                           (324)        (226)        (472)
      Impairment of associates and joint ventures                                                                                               1
      Net loss on dilution of interest in associates                                                                 10           20           29
      Net loss on sale and impairment of property, plant and equipment                                              (1)                        10
      Impairment of intangible assets and goodwill                                                                   52                       123
      Net harvest short-term biological assets                                                                      105           60           60
      Other non-cash items                                                                                         (11)          (3)          (7)
                            
                                                                                                                     86           29          242
      Changes in working capital and other financial instruments                                                  (246)        (154)          204
      Additions to biological assets                                                                               (86)        (107)        (179)
                            
      Cash (utilised by)/generated from operations                                                                (246)        (232)          267

4.    SUBSIDIARIES' ACQUIRED

      Hygrotech Properties Proprietary Limited

      During August 2018, Zaad Holdings Limited ("Zaad"), acquired 100% of the shareholding in Hygrotech Properties Proprietary Limited ("Hygrotech") for a
      cash consideration of R44m. Goodwill of R1m arose in respect of, inter alia, synergies pertaining to the integration of the current operations within the Zaad
      group of companies. Accounting for the Hygrotech business combination has not been finalised.

      The summarised assets and liabilities recognised at the acquisition date was:

                                                                                                                                   Unaudited
                                                                                                                           Hygrotech        Total
                                                                                                                                  Rm           Rm
                                                                        
      Identifiable net assets acquired                                                                                            43           43
      Goodwill recognised                                                                                                          1            1
                                                                        
      Cash purchase consideration                                                                                                 44           44
                                                                        
      Cash consideration paid                                                                                                   (44)         (44)
      Cash and cash equivalents acquired                                                                                           3            3
                                                                        
      Cash flow for subsidiary acquired                                                                                         (41)         (41)

      The aforementioned business combination does not contain any contingent consideration or indemnification asset arrangements and the acquisition-related
      costs expensed were insignificant.

      Had Hygrotech been consolidated with effect from 1 March 2018 instead of its acquisition date, the consolidated income statement would have reflected
      additional revenue of R89m and loss after tax of R12m.

5.    NON-CURRENT ASSETS HELD FOR SALE

      As at 31 August 2018, non-current assets held for sale comprise mainly Capespan Group Limited's ("Capespan") investment in Joy Wing Mau amounting
      to R1,18bn (transferred on 31 August 2018 from equity securities to non-current assets held for sale). As reported on SENS on 21 September 2018, Zeder is
      in the process of disposing of its investment in Joy Wing Mau. In the current period it also includes property, plant and equipment within the Capespan UK
      operations, amounting to R3m (31 August 2017: R12m) (28 February 2018: R7m), following the adoption of a plan to sell the assets in the previous period.

6.    FINANCIAL INSTRUMENTS

6.1   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 consolidated interim financial statements do not include all financial risk management information and disclosures set out in the consolidated
      annual financial statements, and therefore they should be read in conjunction with the group's annual financial statements for the year ended 28 February
      2018. Risk management continues to be carried out throughout the group under policies approved by the respective boards of directors.

6.2   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 financial
      instruments. 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.

      There have been no significant transfers between level 1, 2 or 3 during the period under review and the valuation techniques and inputs used to determine
      fair values are similar to those disclosed in the consolidated annual financial statements for the year ended 28 February 2018.

      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:
      
      Unaudited                                                                                    Level 1      Level 2      Level 3        Total
      31 August 2018                                                                                    Rm           Rm           Rm           Rm
              
      Assets
                                                                                                                                       
      Equity securities                                                                                  9                        29           38

         Opening balance                                                                                                         679           
         Fair value gains                                                                                                        490           
         Disposals                                                                                                               (5)          
         Transfer to non-current assets held for sale (note 5)                                                               (1 182)          
         Currency translation adjustments                                                                                         47           
                                                                                                                                                
      Liabilities 
                                                                                                                                 
      Derivative financial liabilities                                                                                1           39           40

         Opening balance                                                                                                          39            
         Fair value gains                                                                                                        (1)          
         Finance cost                                                                                                              1           
              
              
      Unaudited                                                                                    Level 1      Level 2      Level 3        Total
      31 August 2017                                                                                    Rm           Rm           Rm           Rm

      Assets                                                                                                                                    
              
      Equity securities                                                                                               -           45           45

         Opening balance                                                                                              1           44             
         Transfer between levels                                                                                    (1)            1  
                 
      Liabilities 
                                                                                                                                 
      Derivative financial liabilities                                                                                            42           42

         Opening balance                                                                                                          94            
         Transactions with non-controlling interests                                                                            (50)           
         Fair value gains                                                                                                        (7)           
         Finance cost                                                                                                              5            
              
              
      Audited                                                                                      Level 1      Level 2      Level 3        Total
      28 February 2018                                                                                  Rm           Rm           Rm           Rm
              
      Assets  
                                                                                                                                     
      Equity securities                                                                                  9                       679          688

         Opening balance                                                                                                          44             
         Transfer from associates to equity securities                                                                           700             
         Disposals                                                                                                                (7)            
         Fair value gains                                                                                                          8             
         Exchange differences                                                                                                    (66)     
                
      Liabilities  
                                                                                                                                
      Derivative financial liabilities                                                                                            39           39

         Opening balance                                                                                                          94            
         Disposals                                                                                                              (47)           
         Fair value gains                                                                                                       (15)           
         Finance cost                                                                                                              7            
        
7.    SEGMENTAL REPORTING

      The group is 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 (being a measure of segment profit) is calculated on
      a see-through basis. Zeder's recurring headline earnings is the sum of its effective interest in 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 the elimination of equity securities' see-through recurring headline earnings not equity accounted, the related net
      fair value gains/losses and investment income (as recognised in the income statement). Associates' and subsidiaries' once-off gains and losses are excluded
      from recurring headline earnings and included in non-recurring headline earnings.

      Segmental income comprises revenue and investment income, as per the income statement.

      Sum-of-the-parts ("SOTP") is a key valuation tool used to measure Zeder's performance. The SOTP value is calculated using the quoted market prices for all
      JSE-listed 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 (executive committee) evaluates the following information to assess the segments' performance:

                                                                                                                    Unaudited             Audited
                                                                                                                 Aug 18       Aug 17       Feb 18
                                                                                                               6 months     6 months    12 months
                                                                                                                     Rm           Rm           Rm
             
      Recurring headline earnings segmental analysis: 
                                                            
      Segments    
                                                                                                                                      
        Food, beverages and related services                                                                        187           85          394
        Agri-related retail, trade and services                                                                      58           50          102
        Agri-inputs                                                                                                  10          (6)          110
        Agri-production                                                                                            (24)         (14)         (30)
             
      Recurring headline earnings from investments                                                                  231          115          576
      Net interest, taxation and other income and expenses                                                         (64)         (50)        (102)
              
      Recurring headline earnings                                                                                   167           65          474
      Non-recurring headline items                                                                                  348            9         (49)
              
      Headline earnings                                                                                             515           74          425
      Non-headline items (note 2)                                                                                  (51)           53        (171)
              
      Attributable earnings                                                                                         464          127          254
                                                                                                                  
      SOTP segmental analysis:  
                                                                                  
      Segments     
                                                                                               
        Food, beverages and related services                                                                      8 575        9 853       10 169
        Agri-related retail, trade and services                                                                   1 217        1 602        1 405
        Agri-inputs                                                                                               2 235        2 043        2 043
        Agri-production                                                                                             493          614          591
      Cash and cash equivalents                                                                                     272           75          111
      Other net assets                                                                                              111          101          108
      Debt funding                                                                                              (1 500)        (977)      (1 000)
             
      SOTP value                                                                                                 11 403       13 311       13 427
                                                                                                                                                          
      SOTP value per share (rand)                                                                                  6,67         7,72         7,85
                                                                                                                                                         
      Profit before tax segmental analysis: 
                                                                                                               
      Segments 
                                                                                                                                         
        Food, beverages and related services                                                                        661          172          479
        Agri-related retail, trade and services                                                                      57           46           93
        Agri-inputs                                                                                                 (5)         (27)          102
        Agri-production                                                                                            (44)         (39)        (156)
      Management fees and other income and expenses                                                               (119)         (64)        (114)
      
      Profit before tax                                                                                             550           88          404

      IFRS revenue (revenue and investment income) segmental analysis: 
                                            
      Segments  
                                                                                                   
          Food, beverages and related services                                                                    2 762        3 729        6 672
       
            Revenue                                                                                               2 739        3 710        6 621
            Investment income                                                                                        23           19           51
       
          Agri-inputs                                                                                               501          503        1 412
      
            Revenue                                                                                                 493          495        1 398
            Investment income                                                                                         8            8           14
      
          Agri-production                                                                                           176          235          467
      
            Revenue                                                                                                 176          235          466
            Investment income                                                                                                                   1
      
      Unallocated investment income (mainly head office interest income)                                             11            6           11
      
      IFRS revenue                                                                                                3 450        4 473        8 562

8.    CAPITAL COMMITMENTS, CONTINGENCIES AND SURETYSHIPS

      Capital commitments, contingencies and suretyships similar to those disclosed in the consolidated annual financial statements for the year ended 28 February
      2018 remained in effect during the period under review. 

9.    RELATED-PARTY TRANSACTIONS 

      Related-party transactions similar to those disclosed in the consolidated annual financial statements for the year ended 28 February 2018 took place during  
      the period under review.

10.   EVENTS SUBSEQUENT TO THE REPORTING DATE

      No material event occurred between the end of the reporting period and the date of approval of these condensed consolidated interim financial statements.

11.   PREPARATION

      These condensed consolidated interim financial statements were compiled under the supervision of the financial director, Mr JH le Roux, CA (SA), and were
      not reviewed or audited by the group's external auditor, PricewaterhouseCoopers Inc.

Signed on behalf of the board

Jannie Mouton                                                            Norman Celliers
Chairman                                                                 Chief executive officer

Stellenbosch
9 October 2018

DIRECTORS
JF Mouton (Chairman), N Celliers* (CEO), JH le Roux* (FD), GD Eksteen#, WL Greeff, ASM Karaan#, NS Mjoli-Mncube#, PJ Mouton, CA Otto# 
*executive
#independent non-executive

COMPANY SECRETARY AND REGISTERED OFFICE
Zeder Corporate Services Proprietary Limited
2nd Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
PO Box 7403, Stellenbosch, 7599 

TRANSFER SECRETARY
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107

SPONSOR
PSG Capital Proprietary Limited

AUDITOR
PricewaterhouseCoopers Inc.



Date: 09/10/2018 02:50:00 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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