Clover expects turnaround in profit by June
Headline earnings per share for the period were expected to be more than 180.5cents higher than the headline loss per share of 23.1c that was reported at the end of last year, the dairy group said in a trading statement on Friday.
Earnings per share were expected to be more than 182.7c higher than the 19.9c loss per share reported in the comparative period.
The annual financial results are expected to be released around September 10.
An earlier earnings forecast was still considered to be achievable, despite tough trading conditions experienced during January to April. However, “strong trading in May and June will be essential to meet these targets”.
In February, a consortium, led by Central Bottling Company, offered to acquire all Clover's shares at R25 each. Cape-based investment company Brimstone caved in to pressure from pro-Palestine activist group Boycott, Divestment and Sanctions SA and exited the consortium, but Brimstone said it was in talks to find a new empowerment partner.
The share price traded 1.53percent lower at R22.51 on Friday afternoon before closing at R22.65.
Clover said on Friday that it had increased market share in the run-up to the elections, in spite of weakening conditions in the retail and fast-moving consumer goods sectors since January.
“Clover continued to increase market shares in various categories on the back of marketing investment and additional trade support. This will bode well for future performance,” Clover's management said.
The spreads and margarines launched in March were well received by the trade. There had been a delay in price increases to the trade due to the tough trading conditions, but these increases were now expected to go through between May and August 2019.
A fire at Clover's Estcourt powder factory in March this year had caused severe damage to the facility and had a significant impact on the availability of cream as Clover could not produce skim milk powder.
This in turn impacted production of certain highly profitable products. Clover was insured for the assets impacted by the fire and business interruption, and discussions were under way with insurers to quantify a claim, the group said.