JOHANNESBURG - Clover Industries said they faced a challenging year as
the prolonged drought and rand volatility in the country were beyond their control.
The company on Tuesday announced its financial results for
the year ended June 2017.
Revenue for the period improved by 2.4 percent to R10
billion. Revenue from sale of products increased by 3.3 percent to R9.4 billion
due to higher selling prices which increased on average 6.8 percent while
services rendered to principals contributed R641 million to revenue, a decline
of 6.3 percent.
Johann Vorster, Clover Chief Executive, said: “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”.
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“We are confident that the measures implemented during this
reporting period will not only ensure sustainability and growth during the
current down cycle, but will position Clover optimally to take
advantage of any economic tailwinds, once the economic tide has turned.”
Vorster said the decline was mainly attributable to the loss
of major principal income in previous periods compounded by negative consumer
sentiment and the liquidation of a recently signed principal.
“The overall decline was largely mitigated by recent new
product launches albeit off a low base.”
Vorster said: “On the back of the tough market conditions,
we focused on cost saving initiatives during the review period. The management
team drove efficiencies and cost savings, especially on variable costs,
exceptionally hard.
“A number of actions implemented in the latter part of the
financial year such as the operational restructuring of DFSA, the launch of
Project Sencillo, the ongoing roll-out of Masakhane, new product launches, and
material changes to product recipes resulting in lower costs and sugar content
have starting yielding encouraging results which should be reflected in the
upcoming interim results and beyond.”