Unaudited Results For The Six Months Ended 31 August 2019
ZEDER INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2006/019240/06
Share code: ZED
("Zeder" or "the Company")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2019
Zeder is an investor in the broad agribusiness and related industries, with a historical focus on the
food and beverage sectors. Its underlying investment portfolio was valued at R12.0bn on 31 August
2019. Zeder's 28.6% interest in Pioneer Foods remains its largest investment, representing 51.2%
(28 February 2019: 43.5%) of the portfolio.
PROSPECTS AND OUTLOOK
The negative macro conditions are likely to remain unchanged in the short to medium term but should
improve over the longer term. As a result, earnings and valuations at both a Zeder and portfolio level
are expected to be subdued during the next reporting period. Notwithstanding these challenges, and
in light of the anticipated Pioneer Foods disposal, Zeder should be in a position to create value for
its shareholders through this cycle. It is anticipated that the substantial cash proceeds will enable
Zeder to return capital to its shareholders, while also actively investing into its existing portfolio and
new opportunities when opportune. Zeder remains committed to delivering sustainable returns to
Zeder's Sum-of-the-Parts ("SOTP") value per share, calculated using the quoted market prices for
all JSE-listed investments, and internal valuations for unlisted investments, increased by 11% during
the reporting period to R6.25 as at 31 August 2019. At the close of business on Monday, 30
September 2019, Zeder's SOTP value per share was R6.22.
28 Feb 2019 31 Aug 2019 30 Sep 2019
Interest Interest Interest
Company (%) Rm (%) Rm (%) Rm
Pioneer Foods 27.1 4 689 28.6 6 145 28.6 6 175
Zaad 95.3 2 235 95.3 2 243 95.7 2 243
Capespan 97.4 1 193 97.4 1 081 97.4 1 081
The Logistics Group 97.4 978 97.4 1 028 97.4 1 028
Kaap Agri 41.1 959 41.0 865 41.0 949
Agrivision Africa 56.0 493 56.0 398 56.0 398
Quantum Foods 29.3 216 30.8 228 30.8 225
Other 19 15 17
Total investments 10 782 12 003 12 116
Cash and cash equivalents 254 72
Other net assets 109 119 121
Debt funding (1 500) (1 500) (1 593)
SOTP value 9 645 10 694 10 644
Number of shares in issue
(net of treasury shares) (million) 1 710 1 710 1 710
SOTP value per share (rand) 5.64 6.25 6.22
Note: Zeder's live SOTP is available at www.zeder.co.za.
Zeder's consolidated recurring headline earnings is the sum of its effective interest in the recurring
headline earnings 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, while once-off (i.e. non-
recurring) income and expenses are excluded. This provides management and investors with a more
transparent way of evaluating Zeder's earnings performance.
28 Feb 19 31 Aug 18 31 Aug 19
12 months 6 months Change 6 months
Rm Rm % Rm
Recurring headline earnings from
investments 604 231 135
Net interest, taxation and other income and
expenses (133) (64) (74)
Recurring headline earnings 471 167 (63) 61
Non-recurring headline items 296 348 (20)
Headline earnings 767 515 (92) 41
Non-headline items (678) (51) 398
Attributable earnings 89 464 (5) 439
Weighted average number of shares in issue
(net of treasury shares) (million) 1 702 1 702 1 702
Recurring headline earnings per share
(cents) 27.7 9.8 (63) 3.6
Headline earnings per share (cents) 45.1 30.3 (92) 2.4
Attributable earnings per share (cents) 5.2 27.3 (5) 25.8
Recurring headline earnings per share decreased by 63% to 3.6 cents mainly due to the weaker
performance of most investees following continued challenging trading conditions experienced by
the food and related business sector.
Headline earnings per share decreased by 92% to 2.4 cents, mainly as a result of the above and
due to the upward fair value adjustment of the investment in Joy Wing Mau (previously known as
Golden Wing Mau) in the prior corresponding period prior to its disposal.
Attributable earnings per share decreased by 5% to 25.8 cents, a lower percentage than recurring
headline and headline earnings per share, mainly due to the reversal of the non-headline impairment
charge recognised by Zeder on its associate investment in Pioneer Foods which was recognised at
the prior year-end.
Profit before finance costs and taxation per Zeder's consolidated income statement decreased by
24% to R535m, mainly as a result of the aforementioned factors.
Category 1 disposal of investment in Pioneer Foods and application of proceeds
Pioneer Foods received an all-cash offer from PepsiCo Inc to acquire 100% of the Pioneer Foods
ordinary shares in issue for a purchase consideration of R110 per share plus certain dividend(s) per
Pioneer Foods ordinary share. This offer consideration represents a 56.5% premium to the Pioneer
Foods 30-day VWAP of R70.31 per share as at 12 July 2019.
Accordingly, a general meeting was held on Monday, 30 September 2019, where the intended
disposal was approved by the requisite majority of Zeder shareholders. The full and final
implementation of this transaction remains subject to the fulfilment of further conditions.
If successfully implemented and after having settled its related obligations, Zeder should be able to
distribute between R4.25bn and R4.75bn to shareholders. This distribution is being considered by
the Zeder board of directors and remains subject to the timing of the transaction and further
evaluation of circumstances at the time. The remaining balance of the proceeds will be invested in
new opportunities or in Zeder's existing underlying portfolio.
Investments in Zaad
In recent years, Zaad has added strategic plant nutrition and agrochemicals to its portfolio to
complement its product offering, particularly in emerging markets with the Farm-Ag and Hygrotech
acquisitions. In terms of agreements previously entered into, Zaad acquired all the remaining shares
in Farm-Ag effective 1 September 2019.
Zaad also concluded transaction agreements whereby it will acquire a 40% stake in the EAS group
of companies ("EAS") in Kenya. EAS was established in 1972 and has steadily grown to become
the leading independent seed company within the East and Central African regions. Shareholders
should note that the agreement is still subject to several conditions precedent, including receipt of
relevant regulatory and competition approvals.
Zeder has committed an additional R300m investment into Zaad to enable the aforementioned
It is currently Zeder's policy to only declare a final dividend at year-end.
UNAUDITED SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It contains only
a summary of the information in the full announcement ("Full Announcement") and does not contain
full or complete details. The Full Announcement can be found at:
Copies of the Full Announcement is also available for viewing on the Company's website at
http://www.zeder.co.za/investor-centre/ or may be requested in person, at the Company's registered
office or the office of the sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on consideration of the
Shareholders are reminded that Zeder will be hosting a webcast and a conference call at 15h00
(South African time) on Wednesday, 9 October 2019 to present the results to shareholders and the
market. To register for the webcast or the conference call, please follow the relevant links below.
– View and listen mode, with a Q&A facility
– Link: www.ccwebcast.eu/links/zeder191009/
Conference call details:
– Listen-only mode, with an interactive Q&A at the end of the presentation
– Link: www.diamondpass.net/6386878
8 October 2019
Date: 08/10/2019 01:00:00
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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
Email this JSE Sens Item to a Friend.