Further trading statement
Clover Industries Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/030429/06)
Ordinary Share code: CLR ISIN No: ZAE000152377
NSX Ordinary Share code: CLN
Bond Company Code: CLRI
("Clover" or "the Company")
FURTHER TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, companies
are required to provide guidance to the market when they are
satisfied that a reasonable degree of certainty exists that the
financial results for the forthcoming reporting period will differ
by at least 20% from the results of the previous corresponding
Accordingly, shareholders are also referred to the announcement
released on the Stock Exchange News Service (“SENS”) on 28 June 2018
wherein the Company advised that headline earnings per share (“HEPS”)
and earnings per share (“EPS”) for the year ended 30 June 2018
(“current period”) are expected to be more than 20% higher than the
corresponding reporting period of the previous year (the year ended
30 June 2017) (“comparative period”).
After having closed out the June 2018 month-end, the Company now has
a better view on the expected full year results of the group, and
shareholders are now advised that the Company expects:
- HEPS for the current period to be between 207.13% and 227.13%
higher than HEPS of 63.90 cents reported for the comparative
period, resulting in an expected HEPS of between 196.26 cents
and 209.04 cents.
- EPS for the current period to be between 135.0% and 155.0%
higher than EPS of 83.1 cents reported for the comparative
period, resulting in an expected EPS of between 195.40 cents
and 212.03 cents.
During the current period, a mix of interventions by the management
team and the normalisation of external factors enabled the Company’s
results to recover to expected profit levels compared to the
disappointing results achieved in the comparative period. These
interventions and factors included, inter alia, the following:
- normalised weather conditions following the drought-related
difficulties which significantly impacted the Company’s
performance for the corresponding period;
- lower input costs compared to the corresponding period which
saw abnormally high levels because of the widespread and
- aggressive fixed cost control;
- realisation of planned supply chain efficiencies and resultant
- ongoing introduction of value-added products, focusing on the
needs of the consumers;
- increased marketing spend, including new product launch
- controlled roll-out of a wider distribution reach;
- after substantial capital spent in previous years, normalised
capital expenditure in the current period resulted in lower
interest charges; and
- the successful exit and transfer of the cyclical low margin
drinking milk business from Clover to Dairy Farmers of South
The macro environment during the second half of the financial year
was in some instances tougher than the first half and characterised
by a rise in unemployment, a contraction in GDP, rand volatility and
ongoing price inflation, specifically higher fuel and electricity
prices. In addition, the introduction of sugar taxes and the VAT
increase put a significant strain on consumer spending.
Consequently, overall trading conditions were difficult and
exacerbated by structural changes in the retail environment which
included aggressive pricing from competitors. Additionally, the
listeria outbreak resulted in losses in principal fee income which
could not be replaced during the reporting period.
The Company decided to increase selling prices only moderately and
to implement them late in the financial year in order to gain back
lost market shares from the previous year. Selling prices were
therefore increased in April 2018 to cover inflationary cost
pressures, however cost management and driving efficiencies remained
a clear focus to align with the consumers’ continued price
Clover’s brands performed well, with all major categories either
increasing or maintaining their market shares.
Whilst it is pleasing to see profitability levels returning to
expected levels, the challenging macroeconomic and trading
conditions experienced since the beginning of the year are expected
to continue over the next year. 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.
The estimated financial information on which this trading statement
is based has not been reviewed and reported on by the Company’s
It is anticipated that Clover will release its annual results on
SENS on or about 12 September 2018.
7 August 2018
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 07/08/2018 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Email this JSE Sens Item to a Friend.