Cape Town - Zeder [JSE:ZED], the listed investment company and investor in the broad agribusiness industry, achieved strong results for the six months to August 2014 with the value of its underlying investments increasing by 32% to R6.93 per share during the period.
This is according to Zeder’s “sum-of-the-parts” (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 market-related valuations for unquoted, unlisted investments.
Zeder’s pro forma SOTP value per share as at 2 October 2014, calculated on the basis that the recent Agri Voedsel transaction had been implemented, increased to R7.15 as the net value of its underlying investments reached R10.3bn.
Recurring headline earnings per share increased by 78% to 16.4 cents and headline earnings per share by 116% to 16.0 cents. It is Zeder’s policy to only declare a final dividend at year-end.
Announcing the results, Zeder CEO Norman Celliers said that the interim results are considered most pleasing.
Of importance during the period under review was Zeder’s offer to acquire all of the shares in Agri Voedsel not already held by Zeder whereby Agri Voedsel shareholders were offered Zeder shares in return. The transaction is valued in excess of R2.5bn.
“This transaction was overwhelmingly approved by Agri Voedsel and Zeder shareholders on September 15 2014 and will be implemented on October 20 2014.
Upon completion, Zeder will own 100% of Agri Voedsel and the historical discount for its effective investment in Pioneer Foods will be removed.
As purchase consideration, 463.6 million Zeder shares will be issued to Agri Voedsel shareholders.
“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 largest strategic investment, representing more than 65% of its portfolio following implementation of the aforementioned Agri Voedsel transaction.
“This transaction was communicated in an open and transparent manner to all stakeholders and we were very pleased with the overwhelming support received by the majority of both Zeder and Agri Voedsel shareholders,” said Celliers.
The other investments in Zeder’s portfolio continued to deliver pleasing results with Kaap Agri, an unlisted retail, trade and services group, increasing its headline earnings by 19% for the six months to March 2014.
Capespan, an unlisted fruit and logistics group, continued to deliver strong results with a 234% increase in recurring headline earnings per share for the six months ended June 30 2014.
Zaad, the holding company of Agricol and Klein Karoo Seed Marketing in which Zeder owns a 92% interest, delivered satisfactory results with a 14% increase in recurring headline earnings per share for the six months ended August 31 2014 despite significant expenditures incurred to open up new markets and categories that will make healthy contributions down the road.
Chayton Africa, with large-scale commercial farming and milling operations in Zambia, remains in a development phase. Its operational performance is nevertheless encouraging.
Zeder remains optimistic about this investment as the demand for primary food in sub-Saharan Africa appears strong and sustainable. It continues to actively evaluate further development and acquisitive opportunities.
“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,” said Celliers.