Johannesburg – Clover Industries Limited [JSE:CLR] has reported
diluted headline earnings per share of 108.7 cents for the year ended June 2012
from 106.2 cents a year ago.
Revenue rose by 10.4% to R7.2bn and operating profit
increased by 16.4% to R371.2m. Headline earnings grew by 18.6% to R207.8m.
The group declared a cash dividend per ordinary share of
During the period‚ Clover continued its strategy of
investing in and concentrating on branded and value-added products. In most
categories it increased its market share except‚ notably‚ UHT (long life) milk
where there were new low-priced entrants to the market.
As a result of continuous input cost pressures at farm
level‚ milk prices were increased by 60 cents a litre during the months of
January‚ February and March‚ which had the desired effect of stimulating milk
flow. However‚ the milk price was subsequently reduced by 20 cents a litre from
August 2012‚ ahead of the high milk producing season in order not to over
stimulate milk flow. Cost pressures on farms have‚ however‚ not abated‚ and
adjustments will be made when considered necessary subject to market
Clover's major capital expansion and repositioning programme
Project Cielo Blu is still on track for completion towards the end of 2013. No
major delays‚ other than the delay at the Queensburgh distribution facility due
to a new network design‚ or material over-expenditure‚ have occurred to date‚
The continuous drive to lower operational costs by
increasing efficiencies has had positive results‚ with cost savings being
invested back into lower selling prices to achieve the desired volume growth.
Revenue from the sale of products increased by 10.9%‚ with
2.4% of this relating to volume growth and the rest being attributable to a
combination of inflationary price increases and improved product mix.
Revenue from rendering of services increased by 18.9% or
R121.6m as a result of increased distribution capacity and consequent principal
volume growth‚ together with the additional Epic Foods and Danone merchandising
Revenue from the sale of raw milk to Danone‚ which is made
at cost‚ decreased by 10.3% due to greater direct raw milk purchases by Danone
in the market.
Raw material costs increased by 10.2%‚ mostly as a result of
the farm-gate milk price increases of more than 20% early in the second half of
Packaging costs increased by 6.7%‚ slightly above inflation‚
mainly because of the influence of higher oil prices on plastic packaging.
Looking ahead‚ Clover said the global economy is set to
remain uncertain in the year ahead and it bracing itself for another difficult
year economically in SA.
In spite of this‚ it is confident that the continued
implementation of Project Cielo Blu‚ ongoing cost-savings drives and other
margin-enhancing projects approved by the Board will ensure Clover retains a
healthy market share and strong balance sheet.
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