Zeder marks down its investment in Pioneer


Zeder marks down its investment in Pioneer

Published Date: 2019-04-12 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Zeder marks down its investment in Pioneer

The investment group's value has dropped following a 37% slide in Pioneer Foods' share price.

The value of Zeder's portfolio of food and agricultural investments has continued to decline as their shares prices come under pressure due to negative sentiment towards the sector.

In a trading statement, the investment holding company said its sum-of-the-parts value at the end of February came to R5.64. That's 28% lower than a year earlier. It calculates its SOTP value using the quoted market prices for JSE-listed investments and market-related valuations for unlisted investments. Its biggest investment is its 27% stake in Pioneer Foods, whose share price declined by about 37% over the same period.

Fortunately, earnings haven't come under the same pressure, with full-year headline earnings per share (HEPS) expected to rise by as much as 83.5% due to an upward fair value adjustment after its Capespan subsidiary sold its interest in Chinese company Joy Wing Mau for around R1.18 billion. Excluding the impact of the Joy Wing sale, recurring HEPS are expected to be between 0.7% lower and 1.4% higher than last year. The group says its SOTP value and recurring HEPS are the best measures of its performance.

Attributable earnings per share for the year are expected to fall by as much as 68.2% after it recognised a significant impairment charge on its associate investment in Pioneer due to the decline in its share price.

It expects to release its results on Tuesday. Its shares fell 1.4% to R4.16 yesterday, reflecting a 26% discount to its SOTP value.

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