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CLOVER INDUSTRIES LIMITED - Voluntary operational update for the quarter 1 July 2016 to 30 September 2016

Release Date: 27/10/2016 15:00
Code(s): CLR     PDF:  
Wrap Text
Voluntary operational update for the quarter 1 July 2016 to 30 September 2016

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 Company” or “the Group”)

VOLUNTARY OPERATIONAL UPDATE FOR THE QUARTER 1 JULY 2016 TO 30
SEPTEMBER 2016

Shareholders are referred to the Company’s annual financial
results for the year ended 31 June 2016, published on SENS on 13
September 2016 (“the financial results announcement”) and recent
media reports which have highlighted that the South African retail
sector is currently characterised by rising input costs, weaker
consumer spending, and general food price inflation.

In the interest of transparency and ongoing interaction with
shareholders, the Company thought it prudent to update the market
in relation to the first quarter of trading of this financial
year.

The Company highlighted that a key determining factor for the
industry’s success would be sufficient rainfall and resultant milk
flow in the upcoming spring, that would potentially reduce food
and beverage input costs and food price inflation.

During the quarter under review, Clover continued to contend with
the severe impact of the drought on maize and other crops, as well
as exponential increases in input costs as a result inflationary
pressure and the rand volatility.

The Group faced a challenge of balancing substantial selling price
increases in the market to recover the inflationary pressures it
faced with the responsibility of protecting not only its own milk
source, but the long-term sustainability of the primary diary
industry as a whole in one of the country’s worst droughts on
record.

Although Clover absorbed much of these costs during the reporting
period to 30 June 2016, certain increases were subsequently passed
on to the consumer. Consumer sentiment during the quarter under
review tracked markedly different to the prior corresponding
period, resulting in relative sales volume volatility in most
categories.

The increase in selling prices, corresponding volume volatility
and rising supply chain costs are all factors that make the first
half of this financial year challenging to compare with the prior
corresponding period.
The December trading period traditionally has a considerable
influence on Clover’s first six months results and the Company
will update the market via SENS at the appropriate time and once a
level of certainty of headline earnings per share and earnings per
share performance have been reached. It should be noted that the
festive season sales and weather patterns will underpin the
performance of the first six months.

The Company’s strategy remains sound and Clover is undeterred by
these short-term challenges. Management continues to vigorously
drive cost savings and strategic new listings, balancing these
initiatives against weather conditions, cyclicality and muted
consumer sentiment.

Johannesburg
27 October 2016


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

Date: 27/10/2016 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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