Clover strong on earnings update

Clover's Johann Vorster says earnings will be higher this year but he hasn't provide a range because of the forthcoming festive season. Image: Clover

The share price rallied 2.8% to an intraday high of R17.50 on Tuesday - just shy of its 2013 opening price of R17.68.

Clover said it expected headline earnings per share for the six months to be at least 20% higher than the same period last year but the company did not provide a specific range‚ given the effect of year-end trading.

The expected rise in earnings was attributed to substantial once-off marketing investment in new product launches that occurred in last year's interim period. Furthermore‚ selling prices in the current interim period were higher.

For the six months to December last year‚ Clover reported a 33.5% fall in headline earnings per share to 40.7c. Abnormally high marketing and promotional activities along with sharp increases in fuel and other costs reduced earnings for that period.

However, Clover said as performance for the current six months was "dependent on the festive season"‚ it could not yet quantify the extent of its earnings growth and would issue another trading statement although it did say that earnings would be at least 20% up on last years figures.

Two weeks ago‚ Clover joined a number of JSE-listed companies in launching an American depositary receipt programme in an effort to make its stock more accessible to US investors.

Depositary receipts are financial instruments representing a foreign company's publicly traded securities.

Clover's chief executive Johann Vorster has said the company had seen "a steady increase" in its offshore shareholding since listing three years ago‚ with greater interest from US-based investors.