Clover caught between drought and embattled consumers
Dairy products group says rising raw milk prices and constrained consumers put it under pressure during the first half of its financial year
Dairy products group Clover complained that it was squeezed between the rising raw milk prices due to the drought and consumers unable to afford higher food prices during the first half of its financial year. The group reported overall revenue grew 2.1% to R5.1bn while aftertax profit declined 9.6% to R198m for the six months to end-December. Clover offered its shareholders the choice of receiving a 24.21c cash dividend — maintained at the same level as in its 2015 interim results — or the equivalent in shares. Scrip dividend alternatives are likely to become more popular following the government’s move to raise dividend withholding tax from 15% to 20%. Clover’s raw milk sales nearly halved to R7.76m from R13.48m in the matching period. The drought caused a drop in milk production, but it had started to recover, Clover CEO Johann Vorster said in the results statement.