Sugar tax proves to be a bitter pill for Clover to swallow
The company could be delisted in May if a takeover by an Israeli-led consortium goes ahead
In what could be its last set of results as a listed company, foods and beverages group Clover Industries said on Tuesday that SA’s new sugar tax shaved R42.3m off its half-year earnings. The group’s net profits edged slightly lower in the six months to end-December as distribution costs climbed and as the sugar tax, which was introduced in April 2018, added R42.3m to its cost of sales. Clover, which could be delisted in May if a takeover by an Israeli-led consortium goes ahead, said net profit fell 0.3% to R232.5m, even as revenues grew 4.1% to R4.4bn. However, the company raised its interim dividend per share by 5% to 27.89c. “The ongoing deterioration in disposable household income has had an adverse effect on consumer goods companies, and consensus amongst analysts is that tough times lie ahead for SA’s food producers,” Clover said in its results. “Clover’s early implementation of its strategic focus contributed to a stable performance, despite pressure on consumer spending,” it...
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