Clover reports pedestrian growth as operating costs soar
bdlive.co.za - Sep 13th 2016, 09:36
CLOVER Industries on Tuesday reported single-digit growth in full-year net profit as the dairy products and beverages group battled higher operating costs.
The weaker rand pushed up cost inflation in the year to June, which forced the company to raise selling prices on all product categories in April.
The local currency on average weakened against the dollar and the euro in the review period, which increased the cost of plastic packaging material. The group also experienced sharp increases in the cost of ingredients.
"Management embarked on a radical cost efficiency drive to mitigate the impact of higher-than-expected inflationary cost increases across Clover’s value chain," the company said in a statement
"Farm gate milk prices were reduced in August 2015 as the national milk intake was still 7.2% higher than the previous year which yielded unprecedented growth."
The small-cap company, which listed on the JSE in 2010, was also affected by the drought, which increased feed prices due to maize shortages and the scarcity of good quality roughage.
The company posted a 1.8% rise in net profit to R351.9m in the year to June from the year-earlier period. This was off revenue of R9.8bn, which was up 6% on the previous period.
Clover said a key determining factor for the industry’s success would be the rainfall and resultant milk flow in the upcoming spring, hopefully reducing food and beverage input costs and food price inflation.
The company declared a final dividend of 40.75c per share, bringing the total dividend to 65.15c, which was up 16.3c on the year-earlier period. Headline earnings per share rose 8.9% to R1.89.From DFM Publishers (Pty) Ltd
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