JSE-listed Zeder Investments expects economic uncertainty and volatility to persist in South Africa although it has declared a special dividend.
The company yesterday appointed PSG and Rabobank to act as joint advisers on potential disposals of some of subsidiaries within the group.
Despite Zeder’s net asset value per share for the year to end February 2024 declining by 4.6% to R2.48 compared to a year ago, the agribusiness investor will be paying a special dividend for the period under review.
Shares in Zeder slumped by 2.70% to R1.80 in afternoon trade on the JSE yesterday.
“Shareholders are advised that the Zeder board has approved and declared a gross special dividend of 10.0 cents per share from income reserves, subject to the required South African Reserve Bank approval being obtained for the declaration of the special dividend,” the company said.
It attributed the fall in its net asset value per share to the “payment of special dividends, countered by the net adjustments in the valuation of unlisted investments”.
It maintained that its dividend payment policy was “conditional on the group having sufficient funds to fund its operations and growth” plans.
Attributable earnings per share for the year under review improved from a loss of 12.1 cents a share to earnings of 0.8 cents, mainly as a result of the previous year’s decrease in the listed KAL Group’s share price as at the date of unbundling in April 2022.
This was, however, countered by the net increase in the valuation of Zeder’s unlisted investments during the year.
Profits before taxation from continued operations per Zeder’s consolidated income statement decreased by 28.9% from R38 million in the previous year to R27m.
This has been attributed to the reversal of impairment on loans and advances in the previous year.
Zeder said it anticipated the South African macro environment to remain “constrained”, with the South African agribusinesses remaining downbeat about the business environment.
This was reflected in the Agribusiness Confidence Index, whose reading for the first quarter 2024 at 40 points was well below the neutral 50-point mark.
“New challenges on the weather front include the ongoing El Niño weather pattern that has led to drought conditions which are devastating the summer grains and oilseed regions,” Zeder said.
Additionally, “persistent inefficiencies at the ports, poor rail and road infrastructure, worsening municipal service delivery and risks to energy availability” made up the factors worsening business sentiment.
“We anticipate a continuation of the uncertainty and volatility in the markets that we operate in, in the short- to medium-term, especially ahead of the upcoming elections,” the company said.
After unbundling the KAL Group, Zeder has received several approaches from third parties regarding its remaining portfolio of investments that include Pome Investments and Zaad.
Zeder said it wished to consider these approaches “in a manner which is fair to such third parties and the respective management teams” of the portfolio.
To this end, Zeder appointed PSG Capital and Rabobank as co-advisers to consider any Zaad-specific approaches and potentially embark on formal processes where appropriate.
At the beginning of the year, Zeder together with the minority shareholders, disposed of all of its shares in Capespan, excluding Pome Investments, to 3 Sisters for R550m.
Zeder, which held 92.98% of the issued shares in Capespan, received R511m in cash on February 5 for the disposal.
However, following the implementation of the disposal, Zeder and minority shareholders continue to own Pome Investments.
It comprises the pome fruit primary production operations and the Novo fruit packhouse.
“To enable Zeder shareholders to participate in the windfall proceeds of the aforementioned Disposal, Zeder paid a gross special dividend of 20.0 cents per share subsequent to year-end on 18 March 2024,” it said.
BUSINESS REPORT