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CLOVER INDUSTRIES LIMITED - Voluntary trading statement for the six months ended 31 December 2015

Release Date: 01/02/2016 11:00
Code(s): CLR     PDF:  
Wrap Text
Voluntary trading statement for the six months ended 31 December 2015

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

VOLUNTARY TRADING STATEMENT FOR THE SIX MONTHS ENDED 31
DECEMBER 2015

Clover is pleased to report that revenue has increased by between
5.8% and 10.8% for the six months ended 31 December 2015.

Shareholders are further advised that, for the six months
ended 31 December 2015 (“period”), the Company expects
headline earnings to be between 7.9% and 12.9% higher than
that for the six months ended 31 December 2014 (“comparative
period”), and earnings to be between 1.0% below and 4.0%
higher.

Headline earnings per share (“HEPS”) for the period is
expected to be between 4.7% (5.14 cents) and 9.7% (10.60
cents) higher than HEPS of 109.22 cents reported for the
comparative period. Further, earnings per share (“EPS”) for
the period is expected to be between 3.9% (4.57 cents) below
and 1.1% (1.32 cents) higher than EPS of 117.76 cents reported
for the comparative period. HEPS and EPS is less than headline
earnings and earnings, as the weighted number of shares
increased as a result of equity settled share appreciation
rights that were exercised by management, during the previous
financial year.

National milk flow in South Africa remained much higher on a
month-on-month basis during 2015, compared to prior year
periods (with the exception of December 2015). This national
oversupply of raw milk inevitably impacted negatively on local
market prices, which were further affected by very low
international dairy commodity prices during the calendar year.

Clover’s unique milk procurement system (CUMPS) successfully
maintained a balance between the Company’s milk intake and
market demand (sales), although downwards pressure on overall
market prices impacted the secondary industry as a whole.

Clover’s selling price decreases in the market were to a large
extent absorbed by extensive cost cutting initiatives and
increased efficiencies across the Group.

The increasing ramifications of a protracted drought across
some areas of the country resulted in a shortage of feed and
an increase in on-farm costs, which may necessitate further
increases in selling prices.

The loss of principal income was largely mitigated by
increased sales of existing and new products, as well as
income from a new principal contract entered into.

Overall Clover’s brands traded in line with expectations,
buoyed by solid demand during the festive season and effective
cost management. Where necessary, Clover adjusted its price
premium to successfully defend its market share in some
categories.

The severe heat wave and draught conditions resulted in an
exceptional performance of the beverage portfolio. The
majority of newly launched products also traded above
expectations, with value added products not exposed to dairy
price fluctuations performing especially well.

Results were consequently pleasing considering the milk
surplus experienced during the reporting period, as well as
the loss of a major principal’s income.

Clover's redesigned strategy since listing and management’s
ability to rapidly adapt to market changes enabled the Company
to employ numerous levers to mitigate the major effects of
cyclicality in the business.
The Company expects to release its interim financial results
for the six months ended 31 December 2015 on SENS on or about
2 March 2016.

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

Johannesburg
1 February 2016

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

Date: 01/02/2016 11:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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