Our opinion on the current state of ZED

Zeder (ZED) is PSG's listed, 43,7%-held, investment holding company in agriculture. Zeder sold its stake (28,6%) in Pioneer Foods (PFG) with a sum-of-the-parts (SOTP) value of R10,7bn to PepsiCo for which Zeder got about R6,41bn - and Zeder declared a special dividend of 230c as a result. Zeder's largest investment now is its 98% stake in Capespan which markets fruit both locally and overseas. Then comes a 93% holding in Zaad which specialises in seeds and seed production and a 41% holding in Kaap Agri. In September 2019, the CEO of Zeder acquired 40% of East Africa Seeds (EAS) for Zeder subsidiary Zaad. That holding has subsequently been increased to 97%. The company warned of rising food prices as a result of rising fertilizer and fuel prices following the February 2022 invasion of Ukraine. In its results for the six months to 31st August 2023 the company reported that its net asset value (NAV) fell 2,6% to 262c per share. Headline earnings per share (HEPS) were 3,6c compared to a loss of 13,5c in the previous period "...mainly as a result of the previous corresponding period decrease in the listed KAL Group share price at the date of unbundling in April 2022, countered by an increase in the valuation of unlisted investments during the period." The company carries the exposure of agricultural enterprises to drought and other negative weather conditions, but it is well managed. To us, the share looks fair value at 175c against an NAV of 262c.