Clover restate full-year earnings

This compares with 12.3 cents a year ago.

Revenue increased by 6.1% to R6.5 billion and normalised operating profit was up 2.4% to R328.6 million.

A final dividend of 15 cents per share was declared, for a total dividend for the period of 25 cents a share.

Clover chief executive Johann Vorster said: "We are satisfied with this solid performance. Clover managed to grow its profitability and market share despite difficult trading conditions in the second half of the financial year, where input costs started to rise sharply. The implementation of Project Cielo Blu is going according to plan and will play a significant role in our cost saving and efficiency improvement initiatives."

The group's Project Reset, where the benefits of efficiencies across the supply chain were passed on to customers, had a positive impact and Clover experienced strong sales and volume growth of 8.3% in its branded products category.

Overall volumes grew by 5.4% after a further strategic reduction in bulk commodity product volumes of 13.4%.

During the last quarter of the financial year selling prices were increased to recover a sharp escalation in wages, fuel, energy and ingredients. These increases were however difficult to fully implement at the time as some parts of the country experienced an oversupply of milk during autumn and early winter that led to lagging competitor prices.

This impacted to some extent on the group's normalised operating margin, which was down slightly to 5.0% from 5.2% in the previous period.

Looking ahead, Clover said that it expected another economically difficult year, with renewed inflationary pressures and high wage settlements indicative of price pressures on all fronts.

"Clover's fundamentals haven't changed and it remains a defensive counter with brand elasticity and pricing power. Despite current pricing pressures, management is confident that the various projects implemented and being implemented will ensure that our products become further affordable and available to even more potential customers," concluded Vorster.