Clover -
COMMENTARY
OPERATIONAL REVIEW
The year under review proved exceptionally challenging for consumers, producers and the dairy industry as a whole. Against a backdrop of a
weakening rand, rising CPI and high food inflation, these systemic issues were further impacted by one of the most protracted series of industrial
actions in our democracy's history.
The net effect was a decrease in earnings per share of 30,8 cents, down 23,1% and a decrease in headline earnings per share of 17,2 cents, some
14,3% lower than the comparative year.
For Clover, the following factors impacted on the business:
- Costs: We experienced strong overall inflationary cost pressures, especially on packaging and ingredient costs (which are dollar-based).
In addition, we increased the price we pay for raw milk to ensure on-farm sustainability.
These cost increases could not immediately be recovered due to a very constrained trading environment and weakened discretionary
consumer spend which necessitated a gradual price increase strategy.
- Lower sales volumes as a result of further selling price increases;
- The erosion of sales volumes due to rising inflation, especially in the non-alcoholic beverages segment; and
- A milk shortage during the winter following Clover's rebalancing of its milk purchasing agreements in preparation for its exit from
supplying raw milk at cost to Danone Southern Africa on 1 January 2015.
Lets hope this is not going to happen to my fishies - OCE ....
