Picture: REUTERS
Picture: REUTERS

Agribusiness-focused Zeder Investments expects profits to almost halve in its year to end-February due the sale of its stake in Joy Wing Mau in 2018.

Headline earnings per share will fall by between 45.7% and 47.5% in its year to end-February from the 45.1c reported in the prior matching period, the group said in a trading update.

Zeder’s subsidiary Capespan disposed of its 9.23% interest in Joy Wing Mau, one of China’s largest fruit distributors, for almost R1.2bn in September 2018. This investment had seen a positive fair-value adjustment before its disposal.

Recurring headline earnings — which excludes the effects of disposals to give a better indication of underlying performance — is expected to rise by between 17% and 19.9%, the group said. Zeder did not go into details, but said it had seen an improved performance in some of its investee companies.

Zeder’s investments include a 41% stake in Kaap Agri and a 30.8% stake in Quantum Foods, as of the end of August.

Zeder’s sum-of-the-parts valuation (SOTP) — a measure of the value of the investments of the group — stood at R5.97 at the end of February, the group said.

In morning trade the share price of Zeder, which has a market capitalisation of about R7.5bn, was up 1.15% to R4.39, a 26.4% discount to its SOTP valuation.