Impairments push Clover into a full-year loss
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.
H&M’s sales growth fails to ease investors concerns about margin pressure
18/06/2019 - 15:41
Fashion retailer H&M reported sales grew for a fourth straight quarter, but also hinted it had needed to invest more to boost its online business, disappointing investors already concerned about margin pressure.
Fashion house Chanel parades its independence as profits rise
18/06/2019 - 12:49
Luxury fashion group Chanel, whose star designer Karl Lagerfeld died in February, reported higher annual sales and profits and once again reaffirmed its independence, stating it was not for sale.
Zara owner Inditex shakes off chill with strong second quarter start
14/06/2019 - 11:22
Zara owner Inditex bounced back from a weak start to 2019, when unseasonably cold weather in southern Europe stifled sales for the Spanish fashion group, with a strong performance in the first weeks of the second quarter.
Woolworths share price recovers on renewed optimism
13/06/2019 - 09:04
Shares in Woolworths have rebounded in recent weeks, thanks to a recovery in the sector and optimism that the worst may be over for the high-end retailer, whose foray into Australia has proven costly for investors.
There's no truth to importers' threats about 'expensive' chicken
05/06/2019 - 08:58
Don't rely on the chicken importers for the facts. In a massive public relations exercise to turn opinion against higher import tariffs, they have relied on assertion, misdirection, misinformation, and bluster. Facts are few and far between.