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ZED
ZED
ZED - Zeder - Unaudited Results For The 6 Months Ended 31 August 2007
Zeder Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 2006/019240/06
JSE share code: ZED ISIN: ZAE000088431
("Zeder" or "the company")
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 31 AUGUST 2007
- Investment portfolio : 49% up
- Net asset value per share: 12% up
NATURE OF BUSINESS
The company`s main business is that of an investment holding company in unlisted
agri companies.
HIGHLIGHTS
Zeder has achieved its stated objective to equity account its investments in
- Kaap Agri Limited;
- Pioneer Food Group Limited via Kaap Agri Limited;
- KWV Limited;
- MGK Business Investments Limited ("MGK"); and
- KLK Landbou Limited
with effect from 1 August 2007, except for MGK which took effect in July 2007.
The aforementioned equity accounted earnings for the period under review
amounted to R6,586 million.
The company made cash investments of R184 million since 28 February 2007.
RESULTS
Zeder`s investment portfolio increased to R1 153,0 million from
R776,3 million as at 28 February 2007. Zeder`s net profit after tax of R162,2
million for the reporting period increased by 19% compared to the
6 months ended 28 February 2007. The increase is due to the inclusion of
profits of the associated companies and the marked-to-market adjustments of
Zeder`s investments.
Zeder further expanded its investment portfolio during the reporting period. In
addition to the new investment in MGK and increased shareholding in its existing
investment portfolio, Zeder also obtained a 4% shareholding in Tuinroete Agri
Limited. More than 50% of Zeder`s current investment portfolio is represented
by its investments in Kaap Agri Limited/Pioneer Food Group Limited and KWV
Limited. The detailed portfolio is available on the company`s website at
www.zeder.co.za.
Zeder`s net asset value per share increased by 12% from R2.25 on
28 February 2007 to R2.51 on 31 August 2007.
PROSPECTS
It is Zeder`s aim to equity account all its investments. Zeder is continuously
investigating opportunities in the agricultural and related sectors that may
require substantial cash outlays.
Zeder identified the following attributes in making the investment case:
- Long, established track records
- Strong brands that deliver good underlying cash flows
- Strong management with extensive experience
- Asset rich and relative low price earnings ratios
Zeder`s profits for the 6 months ended 31 August 2007 mainly consist of marked-
to-market profits emanating from its underlying investments. Marked-to-market
profits do not necessarily represent recurring income due to the fluctuations in
market prices. The effect of Zeder`s objective to equity account all its
investments should eliminate the volatility in its earnings which may result in
lower but less volatile profits in future.
A significant portion of future profits will be of an equity accounted nature.
DIVIDENDS
Only a final dividend will be declared in terms of the company`s dividend policy
which is to pay cash dividends equal to the dividends received from the
underlying investments.
On behalf of the board.
Jannie Mouton Antonie Jacobs
Chairman Chief Executive Officer
Stellenbosch
21 September 2007
Sponsor
PSG Capital (Pty) Limited
CONDENSED BALANCE SHEET
as at 31 August 2007
Unaudited Audited
Notes 31 Aug 28 Feb
2007 2007
Rm Rm
ASSETS
Financial assets
Investment in associated companies 2 782.7
Equity securities 357.8 776.3
Loans and advances 12.5
Receivables 3.0 0.2
Cash and cash equivalents 352.0 537.4
Total assets 1,508.0 1,313.9
EQUITY
Ordinary shareholders` equity 1,433.6 1,282.9
Total equity 1,433.6 1,282.9
LIABILITIES
Deferred income tax 4 35.9 18.5
Trade and other payables 32.4 7.1
Current income tax liabilities 4 6.1 5.4
Total liabilities 74.4 31.0
Total equity and liabilities 1,508.0 1,313.9
Net asset/tangible asset value per share 250.9 224.5
(cents)
CONDENSED INCOME STATEMENT
for the 6 months ended 31 August 2007
6 months
Unaudited Audited
Notes 31 Aug 28 Feb
2007 2007
Rm Rm
Income
Investment income 25.6 30.8
Fair value gains and losses on financial 166.4 137.1
instruments
Total income 192.0 167.9
Expenses
Management fee (11.3) (7.5)
Total expenses (11.3) (7.5)
Results of operating activities 180.7 160.4
Share of profits of associated companies 6.6
Net income before taxation 187.3 160.4
Taxation 4 (25.1) (23.9)
Net income attributable to equity holders 162.2 136.5
Headline earnings 162.2 136.5
Earnings per share (cents)
- attributable/headline 28.4 27.8
- diluted attributable/headline 28.4 27.8
Dividend per share (cents)
- final 2.0
Number of shares (million)
- in issue 571.3 571.3
- weighted/diluted weighted average 571.3 490.5
CONDENSED STATEMENT OF CHANGES IN OWNERS` EQUITY
for the 6 months ended 31 August 2007 6 months
Unaudited Audited
31 Aug 28 Feb
2007 2007
Rm Rm
Ordinary shareholders` equity at beginning 1,282.9
of period
Shares issued 1,146.4
Net income for the period 162.2 136.5
Dividend paid (11.5)
Ordinary shareholders` equity at end of 1,433.6 1,282.9
period
CONDENSED CASH FLOW STATEMENT
for the 6 months ended 31 August 2007
6 months
Unaudited Audited
31 Aug 28 Feb
2007 2007
Rm Rm
Cash retained from operating activities
Cash generated by operating activities 17.0 30.3
Dividends paid (11.5)
Taxation paid (6.9)
Net cash flow from operating activities (1.4) 30.3
Net cash flow from investment activities (184.0) (190.9)
Net cash flow from financing activities 698.0
Net (decrease)/increase in cash and cash (185.4) 537.4
equivalents
Cash and cash equivalents at beginning of 537.4
period
Cash and cash equivalents at end of period 352.0 537.4
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. Basis of presentation and accounting policies
The abridged financial statements have been prepared in terms of
International Financial Reporting Standards (IFRS), IAS 34 -
Interim Financial Reporting and in compliance with the Listing
Requirements of the JSE Limited. The accounting policies used in
the preparation of the abridged financial statements are
consistent with those used in the financial statements for the
period ended 28 February 2007 except for the following policies
which have been added since:
Investment in associated companies
Associated companies are all entities over which the company has
significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights.
Investments in associated companies are accounted for by the
equity method of accounting.
The results of associated companies are accounted for according
to the equity method, based on their most recent audited
financial statements or latest management information. Equity
accounting involves recognising the company`s share of its
associated companies` post-acquisition profits or losses in the
income statement, and its share of post-acquisition movements in
reserves. The cumulative post-acquisition movements are adjusted
against the carrying amount of the investment. When the
company`s share of losses in an associated company equals or
exceeds its interest in the associated company, including any
other unsecured receivables, the company does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associated company.
Unrealised gains on transactions between the company and its
associated companies are eliminated to the extent of the
company`s interest in the associated companies. Unrealised
losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
2. Investment in associated companies
Unaudited Audited
31 Aug 28 Feb
2007 2007
Rm Rm
Carrying value of shares
Unlisted 782.7
The company`s shareholding in Kaap Agri Limited was increased to
21.81% by exchanging its 5.84% interest in Pioneer Food Group
Limited for shares in Kaap Agri Limited. The share exchange was
based on a 400 to 100 basis, i.e. for every 100 Pioneer Food
Group Limited shares disposed of by the company to Kaap Agri
Limited, it issued 400 new Kaap Agri Limited shares to the
company with effect from 1 August 2007.
3. Commitments and contingencies
The company did not have any capital commitments or contingencies
at 31 August 2007.
4. Taxation
Taxation is provided on the net fair value adjustments to the
company`s investment portfolio, using an effective capital gains
tax rate of 14.5%. Interest income is taxed at 29%, net of the
apportioned management fee expense.
5. Comparatives
No comparative numbers have been provided for 31 August 2006 as
the company was only established on 1 September 2006.
Date: 21/09/2007 16:11:10 Produced by the JSE SENS Department.
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