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ZEDER INVESTMENTS LIMITED - Unaudited Results For The Six Months Ended 31 August 2020

Release Date: 07/10/2020 08:00
Code(s): ZED     PDF:  
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Unaudited Results For The Six Months Ended 31 August 2020

(Incorporated in the Republic of South Africa)
Registration number: 2006/019240/06
Share code: ZED
ISIN: ZAE000088431
LEI code: 37890022AF5FD117D649
("Zeder" or "the Company")



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 R4.9bn on
31 August 2020.


International Financial Reporting Standards (IFRS) require that an entity reassess whether it is an
Investment Entity if facts and circumstances indicate changes to one or more of the elements making
up the definition of an Investment Entity or the typical characteristics of an Investment Entity.

As indicated in Zeder’s SENS announcement dated 2 October 2020, Zeder has reassessed whether,
as a result of the Pioneer Foods disposal, it meets the definition of an Investment Entity and the
typical characteristics of an Investment Entity and has concluded that it, in fact, did so with effect
from 1 March 2020. This date takes into consideration that the terms and conditions attached to the
Pioneer Foods disposal were met in March 2020. Zeder’s investment in Zeder Financial Services
Limited, the 100% subsidiary through which it holds the investments in its underlying subsidiaries
and associates, will be measured at fair value through profit or loss in accordance with IFRS 9
Financial Instruments, with relevant fair value disclosures of Zeder’s investees being provided,
including for the fair value determination of its unlisted investments.

Given that Zeder has met the definition of an Investment Entity from 1 March 2020, the change in
accounting policy was adopted prospectively with effect from the aforementioned date. The reported
results for the interim period ended 30 August 2019 and the financial year ended 29 February 2020
have therefore not been restated (having been prepared in accordance with Zeder’s previous
accounting policy) and will therefore not be comparable to the results for the six months ended 31
August 2020.

The change in accounting policy is expected to provide users of the financial statements with more
relevant financial information to analyse the financial performance of Zeder.


Category 1 disposal of investment in Pioneer Foods and application of proceeds
In line with the relevant announcements, Zeder disposed of its entire shareholding in Pioneer Foods
on 23 March 2020 for a total consideration of R6.41bn. As a result, Zeder has settled all its debt and
related obligations and declared a special gross dividend of 230 cents per share (R3.9bn) to
shareholders, which was paid on 28 April 2020.

Category 2 disposal of investment in Quantum Foods
In line with the relevant announcements, Zeder disposed of its entire shareholding in Quantum Foods
on 12 June 2020, for a total consideration of R308m.

Zeder share repurchases
Zeder invested R262m in the repurchase of shares during the period. The share repurchases were
in terms of the general authority granted by shareholders at the relevant AGMs and were funded out
of available cash resources. The 110m ordinary shares repurchased have been delisted and


The climatic cycle within which our companies operate has improved, with good winter rainfall in the
Western Cape and above normal summer rains expected. These positive changes should contribute
to improved conditions in the short-to medium term and Zeder’s portfolio companies are well
positioned to benefit from same.

The successful disposal of its investments in Pioneer Foods and Quantum Foods and the declaration
of the substantial special dividend are considered in a positive light from a Zeder shareholder’s
perspective. These transactions understandably also represent a material change to the size and
composition of Zeder and its portfolio as they resulted in the disposal and distribution of a substantial
portion of the underlying value of the group. As a result, the Zeder board has decided to reconsider
the strategy of Zeder. The board is currently investigating whether to change the Zeder strategy and
will in due course communicate in more detail to the market.


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, decreased during the
reporting period to R3.72, as at 31 August 2020. The decrease is mainly due to the payment of the
R2.30 per share special gross dividend on 28 April 2020 out of cash reserves. At the close of
business on Wednesday, 30 September 2020, Zeder’s SOTP value per share was R3.73.

                                        29 Feb 2020            31 Aug 2020            30 Sep 2020
                                     Interest               Interest               Interest
Company                                   (%)       Rm           (%)      Rm            (%)      Rm
Pioneer Foods                            28.6     6 348
Zaad                                     95.7     2 034         95.7      2 034        95.7      2 034
The Logistics Group                      98.6     1 028         98.5      1 028        98.5      1 028
Capespan                                 96.7       999         96.0        999        96.0        999
Kaap Agri                                41.0       723         42.3        626        42.3        642
Agrivision Africa                        56.0       242         56.0        155        56.0        155
Quantum Foods                            32.1       188
Other                                                19                      31                     24
Total investments                                11 581                   4 873                  4 882
Cash and cash equivalents                            83                   1 050                  1 050
Other net assets                                     40                      31                     32
Debt funding                                     (1 500)
SOTP value                                       10 204                   5 954                  5 964
Number of shares in issue
(net of treasury shares) (million)                1 710                   1 600                  1 600
SOTP value per share (rand)                        5.97                    3.72                   3.73

Note: Zeder's live SOTP is available at

The SOTP valuations of Zeder’s unlisted investments have been based on the respective investee
companies’ latest financial results. Such valuation methodologies are consistent with those applied
in previous years.

The wide-spread impact of COVID-19 on the global economy and financial markets is already
evident. The short- to medium term severity thereof and consequent impact on the profitability and
valuation of our investments, however, remain uncertain, although they have been considered.

While the SOTP calculation is indicative of the value of Zeder’s underlying portfolio of net assets, it
does not take into account factors such as adjustments for the size of shareholdings, liquidity of the
underlying assets, tax on the potential disposal of underlying assets, head office operating profit/loss
and other factors.

Shareholders and investors are cautioned that earnings per share (“EPS”) and headline earnings
per share (“HEPS”), as well as net asset value per share (“NAVPS”) for the 6 months ended
31 August 2020 are not comparable to those for the previous interim period ended 31 August 2019,
given the change in Zeder’s accounting policy to that of an Investment Entity.

                                                  Audited                    Unaudited
                                                  29 Feb 20    31 Aug 19                   31 Aug 20
                                                 12 months      6 months        Change      6 months
                                                        Rm            Rm             %            Rm
Headline earnings                                       404            41           n/a          (59)
   Continued operations                                 121          (74)                       (119)
   Discontinued operations                              283           115                         60
Non-headline items                                      157           398                      2 188
Attributable earnings                                   561           439           385        2 129
   Continued operations                               (234)         (212)                        772
   Discontinued operations                              795           651                      1 357
Weighted average number of shares in issue
(net of treasury shares) (million)                    1 702         1 702                      1 671

Headline earnings per share (cents)                    23.7           2.4          n/a         (3.5)
Attributable earnings per share (cents)                32.9          25.8          394         127.4
Net asset value per share (cents)                     468.5         481.1          (23)        372.6

HEPS decreased to a loss of 3.5 cents per share mainly due to Zeder ceasing to consolidate its
subsidiaries and equity account its associates, as a result of the aforementioned change in
accounting policy to that of an Investment Entity.

Attributable EPS increased by 394% mainly due to the gain on deemed disposal and reacquisition
of investment, as a result of the aforementioned change in accounting policy to that of an Investment

The NAVPS decreased by 23% mainly due to the significant special dividend paid to shareholders
during the reporting period, countered by the gain on deemed disposal and reacquisition of
investment, as a result of the aforementioned change in accounting policy to that of an Investment

Profit before finance costs and taxation from continued operations per Zeder’s consolidated income
statement increased by R948m from a loss of R116m in the prior comparative period to a profit of
R832m, mainly as a result of the gain on deemed disposal and reacquisition of investment, as a
result of the aforementioned change in accounting policy to that of an Investment Entity.


Zeder’s dividend policy remains to pay dividends conditional on the Group having sufficient reserves
to fund its operations, investments and growth plans. The board continues to maintain a conservative
dividend policy during the Covid-19 recovery period and has taken the decision not to declare an
interim dividend for the six-month period ended 31 August 2020, also in view of the recent special


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:

A copy of the Full Announcement is also available for viewing on the Company's website at 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
Full Announcement.


Shareholders are reminded that Zeder will be hosting a webcast and a conference call at 15h00
(South African time) on Wednesday, 7 October 2020 to present the results to shareholders and the
market. To register for the webcast or the conference call, please follow the relevant links below.

Webcast details:
– View and listen mode, with a Q&A facility
– Link:

Conference call details:
– Listen-only mode, with an interactive Q&A at the end of the presentation
– Link:

7 October 2020

PSG Capital

Independent Joint Sponsor
UBS South Africa

Date: 07-10-2020 08:00:00
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