Clover final results June 2018

Revenue for the year decreased to R8.3 billion (2017: R10.1 billion) whilst gross profit increased to R3 billion (2017: R2.7 billion). Operating profit rose to R611 million (2017: R314.5 million). Loss for the year was recorded at R40.7 million (2017: profit of R158.7 million). Furthermore, headline loss per share was 23.1 cents per share (2017: earnings of 63.9 cents per share).

Dividend declaration
Notice is hereby given that the directors have declared a final gross cash dividend of R92.9 million or 48.68 cents (38.944 cents net of dividend withholding tax) per ordinary share for the year ended 30 June 2018.

Company prospects
Whilst it is pleasing to see normalised profitability levels returning to expected levels, the challenging macroeconomic and trading conditions experienced this year are expected to continue over the next year.

Specifically, inflationary cost pressures in the form of wages, fuel and electricity will continue to take their toll on consumers opting for cheaper alternatives while trade competition for growth and market share remains a key challenge as a disproportionate number of promotions lead to erosion of margins.

Additionally, the milk flow may affect DFSA volumes through our network which adds to the impact of the depressed processed meat market on principal volumes following the listeria outbreak.

Against this backdrop, Clover has secured strategic trading partnerships and is confident that it can provide cost and value effective solutions to alleviate the pressure faced by consumers.

The strategy to grow value added products that places consumers' perceptions of what value means front of mind continues to be implemented in a responsible and sustainable way while efficiency drives will remain a key focus into the future. Management will continue to drive volumes and market shares and expand our value-added product portfolio which is now a core business focus.

We are optimistic that the actions taken will ensure that the business is managed successfully through potential downward cycles and will support Clover's continued drive for improvement in profitability levels over the short to medium term.

Unfortunately, we have been given notice of termination of the distribution and warehousing services relating to the Remgro margarine and spreads business with effect from 3 March 2019. We are however, in the process of developing plans to mitigate the loss of this service income. On a positive note, this will provide us with an opportunity to potentially enter the margarine market.

Annual general meeting
The annual general meeting of the company will be held at 200 Constantia Drive, Constantia Kloof, Roodepoort, 1709 on Monday, 26 November 2018, at 10:00 to transact the business as stated in the AGM notice which will be distributed to shareholders on 29 October 2018.

Publishing of integrated report
The full integrated report will be published on Clover's website and distributed to shareholders on 28 September 2018.

2018-09-12 07:56:53