Advertise with fastmoving.co.za
 
 

Consumer goods and products producer Clover swung to a loss in the year to end-June.
Consumer goods and products producer Clover swung to a loss in the year to end-June.

Impairments push Clover into a full-year loss

RETAILER NEWS

By Andries Mahlangu - Sep 12th 2018, 13:07

Consumer goods and products producer Clover swung to a loss in the year to end-June, as the sudden resignations of the CEO and chair of Dairy Farmers of SA (DFSA) forced the group to write down the R439m revolving credit facility it had extended to the subsidiary. 

DFSA CEO Louis Botha resigned due to the "enormous" conflict between losing milk producers or losing market share during what has been a very challenging time for the dairy industry, the company said in a statement.

DFSA chair Dirk Reyneke also resigned to allow the producer shareholders to appoint their own independent chair and CEO.

DFSA is responsible for the procurement of raw milk as well as the selling, marketing and distribution of the non-value-added drinking milk.

Clover said while it received no notification from the DFSA when it released a trading update in early August, it deemed it fit to "adopt a conservative approach and provide for the full impairment of the R439m revolving credit facility it extended to DFSA as at year-end".

As a result, headline loss per share was 23c in the year to June, from 64c a year ago.

"These latest developments should not deter from the exceptional performance delivered by Clover as highlighted in the normalised results," Clover said in its statement.

Stripping out the impairments, normalised headline earnings rose 224.7%, or R273.2m, to R394.9m, as the group recovered from the after-effects of the drought it experienced a year ago.

Clover also benefited from lower input costs, as well as what it said were efficiency initiatives.

"Strong growth in value-added dairy fluids, as well as fermented products and desserts together with the rigorous series of efficiency improvement, drives culminated in a strong ending to the financial year," Clover said.

The group declared a final dividend of 48.68c per share, bringing the total to 75.24c, which was up 210.8%.

The share price was up 2.69% to R15.29 in early trade on the JSE, valuing the company at R3bn.


Business Live 

Read more about: shares | sales | production | performance | dairy | clover

Related News

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

SA expected to sow fewer maize hectares than in previous seasons
26/11/2019 - 10:06
South African farmers are expected to sow 2.8% fewer hectares of the food staple maize next season than forecast in October after the planting season was delayed by rains, a Reuters survey of analysts showed.

Gearing FMCG manufacturing for the red season spike and maximising profits all year round
25/11/2019 - 11:03
As we enter the festive season, demand for Fast-Moving Consumer Goods (FMCG) increases rapidly, often leaving manufacturers scrambling to fulfill orders from their distribution channel. If demand cannot be met, then loss of revenue is inevitable. However, over-production is not an ideal solution either, as it can leave manufacturers sitting with unsold stock that costs money to store.

Sales at Truworths Africa outperform its UK business
12/11/2019 - 13:24
Truworths, which was forced to write down its UK business by a third recently, said that retail sales in that country were flat in the 18 weeks to November 4, although its African operations performed better.

Black Friday could cost careless shoppers dearly
12/11/2019 - 09:38
SA consumers risk paying a lot more than they bargained for if they are careless when shopping online this Black Friday, warns Fortinet.