Zeder companies deliver despite challenges


Cape Town - JSE listed investment holding company Zeder [JSE:ZED] said on Monday it has increased the net value of its underlying investment portfolio by R2.5bn from R13.3bn to R15.8bn during the six months to the end of August 2015.

Zeder has a specific focus on the agri, food and beverage sectors. Its 27.1% interest in Pioneer Foods remained its largest investment, representing 73% of the portfolio.  

The aggregate recurring headline earnings from investments increased by 67%, largely as a result of Pioneer Foods’ strong performance and Zeder's increased shareholding following the Agri Voedsel scheme of arrangement last year, Zeder said in a statement.

Recurring headline earnings from investments per share increased by 12% to 21.5 cents, while recurring headline earnings per share increased by 3.4% to 15.4c.

Zeder’s sum-of-the-parts (SOTP) value per share, calculated using the quoted market prices for all JSE-listed investments, and market-related valuations for unquoted, unlisted investments, increased by 13% to R10.37 since 28 February 2015. It is Zeder’s policy to only declare a final dividend at year-end.

Announcing the results, Zeder CEO Norman Celliers said its portfolio of investee companies delivered satisfactory results despite challenging macro-economic conditions that prevailed during the period under review. Most companies performed according to expectations.

“Agriculture is a cyclical industry and current conditions are challenging. Despite this, the performances of most of Zeder’s portfolio companies were resilient. This follows in part from decisions that were taken about two years ago to rebalance, diversify and position investments accordingly. Our decisions to ensure greater exposure downstream have paid off,” said Celliers.

“Each of the companies has been strengthened with solid structures and management while being positioned more strategically for long term growth.”

Regarding Zeder’s investments, Celliers said Pioneer Foods maintained its momentum with adjusted headline earnings per share from continuing operations increasing by 39% in the six-month period ended March 31 2015, as reported by Pioneer Foods. Zeder said it remains optimistic about Pioneer Foods’ growth potential.

"Capespan’s strategy of product, market and sector diversification is evolving and should ensure robustness in times of volatility. Capespan delivered results in line with expectations for the six-month period ended June 30 2015," said Celliers.

"Kaap Agri’s headline earnings increased by 8% to R110.6m during the six-month period ended March 31 2015. Its strategy of product and geographic diversification should assist it in managing cyclicality in its sector."

He added that Zaad’s portfolio, product and geographic mix continue to offer "exciting opportunities". The company reported recurring headline earnings of R20.7m, compared to R20.8m in 2014, for the six-month period ended August 31 2015.

"During the period under review the IFC became a strategic partner in Agrivision Africa along with Norfund through an equity injection of $30m. With our new capital partners Zeder's strategic intent remains to build a leading regional food producer in Africa," said CElliers.

"Having weathered adverse market conditions the past couple of years, Quantum Foods released very strong results for the six-month period ended 31 March 2015, reporting a 182% increase in headline earnings per share."

He said primary agriculture remains in a sideways or downward cycle at present, but opportunities keep on presenting itself at portfolio level.

"We are continuously enhancing our existing portfolio companies. We believe that the agribusiness industry offers rewarding long-term investment opportunities, both locally and abroad,” said Celliers.

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