Johannesburg - Zeder, the JSE-listed agri-investment company with a specific focus on the food and beverage sectors, has reported an increase of 49 percent in headline earnings from investments to R805 million for the year to February.
Zeder chief executive Norman Celliers said the focus during the period under review remained on “Project Internal Focus”: looking at the company’s portfolio and increasing sustainable recurring earnings and profits.
The group said it delivered a robust set of results amid a widespread challenging macroenvironment.
The recurring headline earnings increased by 20 percent to 42.4 cents per share and the recurring headline earnings from its investment portfolio increased by 17 percent to 54c per share.
Zeder said its consolidated recurring headline earnings were the sum of its effective interest in each of its underlying investments. The result was that investments, in which Zeder held less than 20 percent and were generally not equity accountable in terms of accounting standards, were included in the calculation of consolidated recurring headline earnings, while once-off (for example non-recurring) income and expenses were excluded.
“This provides management and investors with a more realistic and transparent way of evaluating Zeder’s earnings performance,” it said.
After the results announcement the share price jumped more than 2.92 percent to trade at R5.88 before eventually closing at R5.78 yesterday.
“We are indeed very satisfied with the results, particularly given the tough macroenvironment.
“I think what helped was our internal focus over the past 24 to 36 months where we really worked hard to try and, firstly, rebalance our portfolio and, secondly, make sure our underlying businesses were structured appropriately for the cyclical volatility,” Celliers said.
“There is no doubt that the drought had an effect, but fortunately this was mitigated through a diversified portfolio.”
All the underlying investment companies under Zeder contributed profits with the exception of Agrivision.
Pioneer Foods (Zeder owns a 27.3 percent stake) delivered commendable results for the year to September 2015, with adjusted headline earnings per share from continuing operations increasing by 31 percent.
Capespan (Zeder owns 72.1 percent) reported a modest 8 percent increase in recurring headline earnings for the year to December as rand weakness was not fully capitalised on.
Kaap Agri (Zeder owns 37.9 percent) delivered encouraging results and reported a 16 percent increase in headline earnings for the year to September 2015.
The specialised agri-inputs market, and in particular the seed segment, remains attractive and Zaad (Zeder holds a 92 percent stake) is well positioned to benefit from it. Zaad reported a 20 percent increase in recurring headline earnings for the year to February.
Despite headwinds in Zambia, Agrivision’s (Zeder holds 76.7 percent) operating divisions performed to expectation and the group effectively made a net profit of $1.9 million (R28.4m). However, this profit was nullified as a result of once-off items and dramatic currency weakening that in the end translated to a $7m headline loss for its financial year to December 2015.
Quantum Foods (Zeder holds 26.4 percent) released strong results for the year to September 2015, reporting a 390 percent increase in headline earnings per share. The chief executive remains hopeful for the year ahead.
The group said Zeder’s sum-of-the-parts value per share, calculated by using the quoted market prices for all JSE-listed investments and market-related valuations for unlisted investments, had decreased by 13 percent to R8.03 as at February 29, but had recovered somewhat to R8.37 per share as at March 31. Zeder’s underlying investment portfolio was valued at R12.9bn on March 31.
A final dividend of 9c per share was declared, representing an increase of 64 percent as compared with 5.5c per share in 2015.
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