Clover delivers improved results despite rand decline

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The branded foods and beverages group saw revenue increase to 4.3 billion rand for the six months ending 31 December 2013 from 3.9 billion rand for the same period in 2012.

“Clover is pleased to report significantly improved results for the six months ended on 31 December 2013. Compared to the previous corresponding period, this reporting period benefitted from selling price increases implemented during January 2013 and July 2013 to recover higher costs driven by inflationary pressures,” said [DATA CLR:Clover Industries Limited].

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“The decline of the rand had a profoundly negative effect on the group with the immediate effect being experienced on fuel and packaging costs. However, the weakening rand also contributed to exchange rate profits made by certain African subsidiaries of the group.”

Operating profit rose 70.1 per cent from 138 million rand in 2012 to 235 million rand in 2012 and other operating income increased from 30 million rand to 35 million rand.

Profit before tax increased to 217 million rand in the 2013 period from 122 million rand in 2012 while profit for the period was up by 95.4 per cent.

Headline earnings attributable to shareholders of the parent company grew by 93.6 per cent from 72 million rand in 2012 to 141 million rand in 2013, diluted headline earnings per share increased to 73.2 cents and an interim gross cash dividend per share of 16 cents was declared.

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“South African consumers are confronted with a weak rand, high fuel prices, rising interest rates and high food inflation. In addition Clover addressed the substantial costs pressures on raw milk prices and increased its farm gate milk prices by 5.3 per cent from 1 February 2014 and a further 8.9 per cent from 1 March 2014,” it said.

“The second half of the current financial year will not benefit from a similar low base and together with the depressed trading environment, Clover believes that earnings growth will be difficult to achieve during the second half of the year. In spite of this, the company remains focused on delivering on its longer term strategy of exploring new possibilities in category expansions and expanding its presence in Africa.”