Prolonged drought and volatile rand squeeze Clover
Dairy and foods group Clover reported a dismal set of results, as expected after last week’s trading update, with sharp drops in profit at almost all levels. "Some impacts, such as the prolonged drought, a wetter and cooler summer, and rand volatility, were beyond our control," Clover said in its results statement on Tuesday. "The resultant above-inflation input costs, subdued volume growth and continued low consumer spending amidst aggressive competitor pricing meant that we had to take some very tough decisions during the year, to position and sustain the business optimally against a constrained ‘new reality’." Operating profit fell 44% to R314.5m, headline earnings per share were down 66% to 63.9c and earnings per share fell 55% to 83.1c. Revenue of R10bn was up just 2.4%. With cost of sales rising 4.4%, margins were affected, with the gross margin shrinking to 27.1% from 28.4%. Gross profit fell a much slimmer 2.4% to R67.7m. Fixed costs were stable compared with inflation, Clov...
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