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ZED
ZED
ZED - Zeder - Interim results for the six months ended 31 August 2008
Zeder Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2006/019240/06)
Share code: ZED
ISIN: ZAE000088431
("Zeder" or "the company")
Interim results for the six months ended 31 August 2008
Net asset value per share: up 4% to R2,69
Headline earnings per share: down 52% to 13,7c
Recurring headline earnings per share up 200% to 10,5c
Contribution to headline earnings
Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Recurring headline earnings 63,9 19,8 91,1
Equity accounted earnings from 68,6 6,6 71,6
associates
Investment and other income 9,5 20,9 41,2
Management fee (14,2) (7,7) (21,7)
Non-recurring headline earnings 19,2 142,4 115,4
Marked-to-market profits 15,6 142,4 132,9
Net Pioneer underwriting fee 3,6
Performance fee (17,5)
Total headline earnings 83,1 162,2 206,5
Statistics
Recurring HEPS (cents) 10,5 3,5 15,6
Highlights
Zeder`s recurring headline earnings per share increased to 10,5 cents (2007: 3,5
cents) as a result of the equity accounted earnings from its investment in
associated companies, which were predominantly accounted for as marked-to-market
profits in the income statement for the corresponding period last year. The
company`s objective remains to equity account all of its investments which will
result in less volatile earnings, whilst improving its recurring headline
earnings base.
Zeder`s equity accounted headline earnings from its investments in
* Kaap Agri Limited ("Kaap Agri");
* KWV Limited;
* MGK Business Investments Limited;
* Agricol Holdings Limited; and
* Thembeka Agri Holdings (Proprietary) Limited ("KLK Landbou Limited")
amounted to R68,6m (2007: R6,6m) for the period under review.
Results
Zeder`s investment portfolio increased by 19,5% to R1 632,8m since 29 February
2008, having made investments of R234,1m. Profit after tax for the reporting
period amounted to R93,6m (2007: R162,2m) and headline earnings R83,1m (2007:
R162,2m). Zeder`s net asset value per share increased by 4% to R2,69 since year-
end. The Zeder value per share is R2,05, calculated at unlisted market prices.
During the reporting period Kaap Agri and Pioneer Food Group Limited ("Pioneer")
had rights offers of R100m and R500m respectively. Zeder followed its rights
under the Kaap Agri offer and now has a 34,3% effective shareholding in this
company. Zeder entered into an underwriting agreement with Pioneer whereby it
underwrote R360m of the rights issue. As a result, Zeder subscribed for 2,3
million shares in Pioneer for R57,8m.
Where Zeder equity accounts the investments, the book value of the investments
are tested for potential impairment at each reporting period. The directors are
satisfied that the fair value of Zeder`s investments in its associated companies
exceeds book value.
Prospects
We continue to acquire quality assets in the agricultural and related sectors at
a discount to its intrinsic value and, in so doing, will grow Zeder`s recurring
headline earnings and intrinsic value.
Dividends
It is Zeder`s policy to only declare a final dividend at year-end.
On behalf of the Board
Jannie Mouton Antonie Jacobs
Chairman Chief Executive Officer
Stellenbosch
6 October 2008
Condensed group income statement for the six months ended 31 August 2008
Unaudited Audited
Notes 6 months 6 months 12 months
31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Income
Investment income 13,5 25,4 47,7
Fair value gains and losses 18,2 166,4 154,8
on financial instruments
Sundry income 7,3 0,2 0,5
Total income 39,0 192,0 203,0
Expenses
Management fee (17,0) (11,3) (25,7)
Performance fee (20,6)
Other (2,3)
Total expenses (19,3) (11,3) (46,3)
Results of operating 19,7 180,7 156,7
activities
Share of profits of 79,1 6,6 72,7
associated companies
Net income before taxation 98,8 187,3 229,4
Taxation 5 (5,2) (25,1) (21,8)
Net income of the group 93,6 162,2 207,6
Attributable to equity 93,6 162,2 207,6
holders of the company
Non-headline items 2 (10,5) (1,1)
Headline earnings 83,1 162,2 206,5
Earnings per share (cents)
- attributable/diluted 15,4 28,4 35,6
attributable
- headline/diluted headline 13,7 28,4 35,4
Dividend per share (cents)
- final 5,0
Number of shares (million)
- in issue 611,3 571,3 605,1
- weighted average 606,6 571,3 582,8
Condensed group balance sheet at 31 August 2008
Unaudited Audited
Notes 6 months 6 months 12 months
31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Assets
Investment in associated 3 1 360,2 782,7 1 152,1
companies
Financial assets
Equity securities 272,6 357,8 214,4
Loans and advances 12,5 72,5
Income tax receivable 1,0
Receivables 0,3 3,0
Cash and cash 42,6 352,0 164,5
equivalents
Total assets 1 675,7 1 508,0 1 604,5
Equity
Ordinary shareholders` 1 644,4 1 433,6 1 566,4
funds
Total equity 1 644,4 1 433,6 1 566,4
Liabilities
Deferred income tax 7,6 35,9 2,9
Trade and other payables 17,0 32,4 35,2
Current income tax 5 6,7 6,1
liabilities
Total liabilities 31,3 74,4 38,1
Total equity and 1 675,7 1 508,0 1 604,5
liabilities
Net asset per share 269,0 250,9 259,0
(cents)
Condensed statement of changes in owners` equity for the six months ended 31
August 2008
Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Ordinary shareholders` equity 1 566,4 1 282,9 1 282,9
at beginning of period
Shares issued 14,7 87,4
Net income for the period 93,6 162,2 207,6
Dividend paid (30,3) (11,5) (11,5)
Step acquisition from equity
securities to investment in
associated companies
- Reversal of previous fair 156,8
value gains after taxation on
equity securities
- Revaluation of assets and (156,8)
liabilities of associated
companies
Ordinary shareholders` equity 1 644,4 1 433,6 1 566,4
at end of period
Condensed group cash flow statement for the six months ended 31 August 2008
Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Cash (utilised in)/generated by (16,9) 17,0 46,8
operations
Taxation paid (1,0) (6,9) (8,5)
Net cash flow from operating activities (17,9) 10,1 38,3
Net cash flow from investment (73,7) (184,0) (399,7)
activities
Net cash flow from financing activities (30,3) (11,5) (11,5)
Net decrease in cash and cash (121,9) (185,4) (372,9)
equivalents
Cash and cash equivalents at beginning 164,5 537,4 537,4
of period
Cash and cash equivalents at end of 42,6 352,0 164,5
period
Notes to the financial statements for the six months ended 31 August 2008
1. Basis of presentation and accounting policies
The condensed interim consolidated financial statements have been
prepared in accordance of IAS 34 - Interim Financial Reporting and the
accounting policies conform to IFRS. The accounting policies applied in
the preparation of the interim consolidated financial statements are
consistent with the policies in the previous year.
2. Non-headline items 31 Aug 31 Aug 29 Feb
2008 2007 2008
Rm Rm Rm
Non-headline items of associated (10,5) (1,1)
companies (after tax)
3. Investment in associated companies
Book value
Unlisted 1 360,2 782,7 1 152,1
4. Commitments and contingencies
The company did not have any capital commitments or contingences at 31
August 2008.
5. 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%.
Other income is taxed at 28%, net of the apportioned management
expenses.
6. Related party transactions
The fee expenses were incurred with PSG Group Limited in terms of
agreements in place.
Investment portfolio update to shareholders
The main Zeder investments at 31 August 2008 were:
Company Interest
Kaap Agri Limited 34,3%
KWV Limited 25,0%
MGK Business Investments Limited 29.9%
Agricol Holdings Limited 20.0%
KLK Landbou Limited 10.0%
(Held through a 49.9% interest in Thembeka Agri
Holdings (Pty) Limited)
Suidwes Investments Limited 16.4%
Outspan International Limited 18.3%
NWK Limited 5.4%
All of the above are unaudited figures.
The investments in the table above are disclosed as per directors` discretion,
which include all of the equity accounted investments and other unlisted
investments with market values exceeding R25 million.
Zeder`s investment portfolio will in future be published on SENS in conjunction
with its biannual results announcement.
The next investment portfolio update will be published on SENS during April
2009.
Directors:
JF Mouton (chairman), AE Jacobs* (CEO), CA Otto, MS du Pre le Roux#, LP Retief#
(* executive # independent non-executive)
Secretary and registered office:
PSG Corporate Services (Pty) Limited
1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch, 7600
PO Box 7403
Stellenbosch, 7599
Sponsor: PSG Capital (Pty) Limited
Date: 06/10/2008 17:24:01 Produced by the JSE SENS Department.
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