CLOVER INDUSTRIES LIMITED - Updated trading statement

Updated trading statement

Clover Industries Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/030429/06)
Ordinary Share code: CLR ISIN No: ZAE000152377
("Clover" or "the Company")

UPDATED TRADING STATEMENT

Shareholders are referred to the announcement released on the
Stock Exchange News Service ("SENS") on 8 May 2014 wherein the
Company advised that headline earnings per share ("HEPS") and
earnings per share ("EPS") for the year ended 30 June 2014 are
expected to be more than 20% lower than the previous year (the
year ended 30 June 2013).

Shareholders are now advised that the Company expects HEPS for the
year ended 30 June 2014 to be between 14,8% and 19,8% lower than
the previous year (FY 2013: HEPS 119,9 cents). Further, EPS for
the year ended 30 June 2014 is expected to be between 20,7% and
25,7% lower than the prior year (FY 2013: EPS 133,1 cents).

Major factors impacting upon the financial performance of the
Company highlighted in the SENS announcements of 8 May 2014 and 7
February 2014 as well as at the time of the interim results
continued to negatively impact upon sales volume growth and
therefore earnings growth in the current period.

These major factors are:

-   a very constrained trading environment which limited selling
    price increases to recover raw milk price and other inflationary
    costs; particularly relating to packaging and ingredients;

-   an adverse effect on sales volumes, despite Clover’s strategy of
    gradually increasing selling prices;

-   a decline in principal volumes affecting fees earned for
    services rendered;

-   rising inflation which continues to progressively erode sales
    volumes, especially in the non-alcoholic beverages segment;

-   a shortage of raw milk supply during the last quarter of the
    financial year which negatively impacted upon cheese and UHT
    sales volumes. The normal seasonal low milk intake was
    exacerbated by Clover rebalancing its milk purchasing agreements
    during the same period in preparation for its exit from
    supplying raw milk at cost to Danone Southern Africa on 1
    January 2015 (as announced on SENS on 18 September 2013). Clover
    was presented with an opportunity to reduce its milk supply
    earlier during the year, and it opted to do so despite being
    aware that it will lead to a temporary milk shortage during the
    winter of 2014, to avoid the potential damaging impact of a
    general volume reduction on Clover’s remaining producers.

Clover will continue to focus on its longer term strategy of
launching new higher margin, value added products and platforms,
whilst remaining mindful of shareholder expectations.

The forecast financial information on which this trading statement
is based has not been reviewed and reported on by the Company’s
external auditors.

The Company expects to release its annual financial results for
the year ended 30 June 2014 on SENS on or about 16 September 2014.


Johannesburg
21 August 2014

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 21/08/2014 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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