|
CLR CLRP
CLR
CLR / CLRP - Clover Industries Limited - Unaudited interim condensed
consolidated financial statements for the period ended 31 December 2010 and
cash dividend declaration
CLOVER INDUSTRIES LIMITED
Registration number: 2003/030429/06
ISIN: ZAE000152377
Ordinary Share Code: CLR
ISIN: ZAE000152385
Preference Share Code: CLRP
("Clover" or "the Group" or the "Company")
www.clover.co.za
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD
ENDED 31 DECEMBER 2010 AND CASH DIVIDEND DECLARATION
HIGHLIGHTS
Revenue up 10.8% to R3,349 billion (H1 2009: R3,023 billion)
Operating Profit up 43% to R176 million (H1 2009: R123.1 million)
Headlines from continuing operations up 693% to R 94 million (H1 2009: R 12
million)
Interim dividend of 10c per ordinary share declared
Market share gains across categories
Successful JSE listing in December 2010 with R575m capital raised
Johann Vorster, CEO of Clover, said: "We are pleased with the performance
achieved in this first set of financial results since our successful listing
on the JSE in December 2010. In particular, the impact of our drive to save
costs and further efficiency improvements combined with lower input costs and
market share gains have resulted in a material improvement in the overall
financial performance. Looking ahead, although the cyclicality inherent to our
business results in a typically weaker second half, we expect to deliver a
solid performance for the full year."
ENQUIRIES
Clover +27 (0) 11 471 1703
Johann Vorster
College Hill +27 (0) 11 447 3030
Frederic Cornet +27 (0) 83 307 8286
Morne Reinders +27 (0) 82 815 1844
FINANCIAL OVERVIEW
Headline earnings increased by 113,7% to R94,0 million from the corresponding
prior year period. This increase is exaggerated by the higher than normal
retrenchment costs of approximately R34 million incurred during December 2009.
Headline Earnings from continuing operations is 692,6% higher than the
previous period and even after taking into account the above average
retrenchment costs of R34 million referred to, it still reflects a healthy
105% increase. This greatly improved operating performance can be attributed
mainly to the growth in sales volumes, a result of Project Reset during which
the Group corrected its brand premiums where necessary, an improved product
mix following the strategic exit from bulk markets and a reduction in overhead
costs despite normal inflationary increases. Project Reset was fuelled by
efficiency improvements and cost savings.
The Headline Earnings per Ordinary Share increased significantly from the
previous corresponding period. During the six months to 31 December 2009 the
preference shares were entitled to 97% of ordinary dividends declared.
Earnings per share calculations are based on the dividend rights attached to
the different classes of shares and accordingly 97% of the earnings during the
comparative period accrued to the preference shares. Following the capital
restructuring on 31 May 2010 the preference shares are no longer entitled to
share in ordinary dividends and all earnings accrue to the ordinary shares.
This increase shows the tremendous value that has been added to the ordinary
shareholders since December 2009.
Revenue increased by R326,4 million or 10,8% and Operating Profit by R52,9
million or 43% for the same period.
This growth was achieved despite a modest GDP growth in South Africa, but the
relatively low interest rates had a positive effect on overall consumer
spending. Clover has, however, shared in the economic recovery across all of
its chosen market segments. Clover benefited further from continuing lower
input costs during this period, and by passing savings on to the consumer,
Clover has gained market share from its competitors with the exception of
cheese where very aggressive discounting by competitors in the bulk cheese
market lead to volume losses in Clover`s pre-packed cheese sales.
As mentioned in previous reports, Clover had been investigating for more than
a decade a way in which to recapitalise its Balance Sheet. During May 2010,
the Producer Shareholders voted in favour of delinking their milk quota
allocation from the Ordinary Shares. This enabled Clover to approach
shareholders other than milk producers to invest in the capital of the
business. As a result, Clover listed on the JSE Limited ("the JSE") on 14
December 2010 and through a private placement, secured a capital inflow of
R575 million before costs (R75 million received after the period end) from
some of the most prominent institutional investors in South Africa.
Simultaneously to this delinking of milk quota and Ordinary Shares, Clover
collapsed the dual share structure of the Ordinary Shares and Participating
Preference Shares. From June 2010 Preference Shares` participation in ordinary
dividends ceased and they became debt instruments only, redeemable in June
2013.
A further significant event was the disinvestment of Hosken Consolidated
Investments ("HCI") from Clover`s shareholding. HCI had been a pro-active
shareholder in Clover for 5 years prior to its exit and made a significant
contribution to the Group`s transformation from a Co-op to a public company.
The proceeds from the JSE listing will be utilised to fund Project Cielo Blu,
a major capital project aimed at the repositioning and expansion of
facilities, to simplify the group structure and for other corporate
activities.
Review of Operations
Overall supply chain
Clover has concentrated heavily on reducing supply chain costs during the past
three years. These measures continued during the period under review and
proceeds from the process were utilised to reduce selling prices as part of
Project Reset. A multi-disciplinary team oversees the implementation of this
project.
Dairy operations
Strong market share gains have been achieved since the financial crisis of
2008/9. Lower costs and consequential lower prices played a major part in this
success. Margins are recovering well and after Project Cielo Blu, further
efficiencies and margin improvements are expected.
Beverage operations
Despite tighter consumer spending, the Beverages business continued to show
healthy growth with sales volumes increasing by 12,8%. Revenue however did not
grow to the same extent as a result of Project Reset.
Clover`s juice brands have shown strong competition against the housebrands
and the Tropika brand has again demonstrated its popularity with consumers.
Operating margin for Clover Beverages, although lower than the corresponding
prior year period, increased to 10,7% from 10,3% for the year ending 30 June
2010.
Project Cielo Blu will also improve margins and increase capacities for the
future.
During the period the group launched its premier brand Tropika in Nigeria
through a joint venture with a local partner, New Age Beverage Co. Ltd. The
joint venture is housed in Clover West Africa (Pty) Ltd. The costs associated
with establishing this venture and preparation for trading negatively
influenced the beverages segment`s results for the period. Clover West Africa
started trading in December 2010.
Cash flow
Cash generation for the reporting period, although less than the comparative
period, was above expectation during this traditional cash consuming period.
The measures put in place to reduce the Group`s exposure to cyclical and
seasonal oversupply of milk effectively contained inventory build-up during
the seasonal spring and summer period to levels required to supplement raw
material supply during the autumn and winter periods. Planned and actual milk
intake was much higher than for the six months to 31 December 2009 in order to
supply the Group`s volume and raw milk sales growth with resultant stronger
demand on cash flow.
The six months to December 2009 further benefitted from high opening inventory
levels at 1 July 2009 which allowed for a lower milk intake and the conversion
of inventory into cash. The new capital raised by the listing of R489,3
million, net of costs, caused net current assets to increase from R510,8
million to R1 026,7 million.
Excluding inventory, net current assets increased to R465,1 million from R44,8
million. The Group is now adequately funded to complete Project Cielo Blu over
the next three years.
Prospects
The listing of Clover on the JSE and the simultaneous raising of new capital
has given Clover the means to address historical inefficiencies and to expand
its operations. Project Cielo Blu will see the move of the long life products
plant from Midrand to Port Elizabeth and Pinetown, the move of the central
Johannesburg beverages factory into the Midrand facility and the expansion of
several other production and distribution sites. These improvements will take
between 2-3 years to complete after which margin improvements can be
anticipated.
In the short term Clover will still be subject to an uncertain economy, high
unemployment, rising fuel and energy prices and a fluctuating currency. All of
these factors create unpredictable trading conditions. The second half of the
financial year is traditionally weaker than the first, but the gain in market
share and continuing lower supply chain costs are expected to deliver positive
results. Any forward looking statement included in this announcement has not
been reviewed and reported on by Clover`s external auditors and does not
constitute an earnings forecast.
Post balance sheet events
In the Prelisting Statement issued on 29 November 2010 the company announced
that a share price stabilisation mechanism would be in place for a period of
30 days following the listing on the JSE. In terms of this mechanism the
stabilisation manager was granted an option to subscribe for up to 7,142,857
ordinary shares at the same price as the listing price should price
stabilisation be necessary. Price stabilisation was not required during this
period and the stabilisation manager exercised its option subsequent to the
year end to subscribe for the additional shares. This raised an additional R75
million in share capital during January 2011.
Competition Commission
As reported previously, the Competition Commission referred certain complaints
against seven dairy processors (including Clover) to the Competition Tribunal
for determination. This event has, over a prolonged period of time, received
wide publicity in the press. The complaints contain allegations of unlawful
conduct on the part of Clover (and other respondents) that involve prohibited
practices including collusion in regard to the fixing of milk prices. Clover
has from inception disputed these contentions.
To date there have been several interlocutory proceedings between the
Competition Commission and some of the respondents, including Clover.
These were dealt with by the Competition Tribunal and the Competition Appeal
Court resulting in the litigation to become protracted. The matter of
determining the merits of the complaints has, in the result, not commenced as
yet. It is anticipated - in view of what follows below - that there will be
further interlocutory applications at the behest of certain respondents
including Clover.
In one of these interlocutory proceedings, the Competition Appeal Court held
that a summons, in terms of which certain documentary evidence had been
procured from a co-respondent, was invalid. The commission was ordered to
return all documents thus procured to the respondent.
In a further proceeding, the Supreme Court of Appeal concluded, inter alia,
that the initiation of the complaints against these respondents was invalid
and that, pursuant thereto, the referral of such complaints to the Competition
Tribunal was similarly flawed. The Competition Tribunal was accordingly not
vested with the requisite capacity to entertain the referral.
In this case, the Supreme Court of Appeal emphasised that the Competition Act
has to be interpreted in a manner that is consistent with the Constitution and
that the powers of the Competition Commission must be interpreted in a manner
that least impinges on constitutional values and rights.
Clover has informed the Competition Commission that it intends pursuing a
similar challenge against the Competition Commissioner`s referral and has
requested clarification from the Competition Commission of its position
following the Supreme Court of Appeal judgement in the above mentioned matter.
To date the Commission has failed to respond. In the meantime Clover is
proceeding with its application to have the referral set aside.
Application for designation of the dairy industry
Clover lodged and application for the designation of the Dairy Industry with
the Minister of Trade and Industry on 14 November 2008. During 2009 the
Department indicated that Clover should receive an update on the process
during September and later November 2009 which did not materialise.
Correspondence was received recently from the Minister of Economic Development
confirming that a meeting will be scheduled to discuss the application.
Flowing from enquiries made at the Department of Agriculture with regard to
the application for designation, a meeting was held with the Department of
Agriculture and a proposal was made by representatives of National Marketing
Council that an application could be made to appoint a Section 7 (Marketing
Act) Committee to deal with certain critical issues regarding the Dairy
Industry. The decision whether to form the Section 7 Committee will be taken
by the Minister of Agriculture by the end of February 2011.
In the event that Clover is successful with its application for the
designation of the Dairy Industry, the Competition Commission may provide
guidelines and/or directives with regard to agreements or practices or
category of agreements or practices relating to the dairy industry, taking
cognisance of the provisions of the Competition Act.
Dividends
An interim dividend of 10 cents per ordinary share has been declared.
For and on behalf of the Directors
JAH Bredin JH Vorster
Chairman Chief Executive
10 March 2011
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited *Unaudited Notes Audited
(Restated)
Six months ended Year ended
31 December 31 December 30 June
2010
2010 2009
R`000 R`000 R`000
Continuing operations
Sales of products 3 022 482 2 720 846 5 409 689
Rendering of services 325 575 300 636 583 073
Rental income 1 220 1 386 2 978
Revenue 3 349 277 3 022 868 5 995 740
Cost of sales (2 452 367) (2 146 194) (4 328 694)
Gross profit 896 910 876 674 4 1 667 046
Other operating income 5 668 57 485 60 054
Profit on sale of
associated company - - 337 682
Dividends received - 650 649
Selling and distribution
costs ( 632 431) ( 624 076) (1 200 290)
Administration expenses ( 82 940) ( 102 668) ( 149 061)
Restructuring expenses ( 11 218) ( 78 894) ( 149 458)
Other operating expenses - ( 6 069) ( 7 652)
Operating profit 175 989 123 102 4 558 970
Finance income 6 770 7 726 27 353
Finance cost ( 32 775) ( 61 178) ( 90 871)
Profit before tax from 149 984 69 650 495 452
continuing operations ( 52 078) ( 3 622) ( 191 662)
Income tax expense
Profit for the period from 97 906 66 028 303 790
continuing operations
Discontinued operations - * 32 123 32 123
Profit after tax for the
period from discontinued
operations
Profit for the period 97 906 98 151 335 913
Other comprehensive income
Exchange differences on
translation of foreign
operations ( 810) ( 1 577) ( 2 717)
Total comprehensive income 97 096 96 574 333 196
for the period, net of tax
Profit attributable to:
Equity holders of the 96 743 94 516 330 819
parent 1 163 3 635 5 094
Non-controlling interests
97 906 98 151 335 913
Total comprehensive income
attributable to:
Equity holders of the 96 080 93 372 328 881
parent 1 016 3 202 4 315
Non-controlling interests
97 096 96 574 333 196
* In the prior year interim report the Group`s share of Danone Clover`s
earnings was disclosed as Income from associated company. This investment was
sold on 1 January 2010 and treated as a discontinued operation in the 2010
annual report. The comparative figures for the six months ended 31 December
2009 were restated accordingly.
31 December 31 December 30 June 2010
2010 2009
Cents per Cents per Cents per
share share share
Earnings per share
Basic earnings for the 75,3 2,0 5 214,0
period attributable to
ordinary equity holders
adjusted on a two for one
basis.*
Basic earnings for the - 104,4 5 -
period attributable to
preference equity holders.
Diluted earnings for the 75,0 2,0 5 214,0
period attributable to
ordinary equity holders
adjusted on a two for one
basis.*
Diluted earnings for the - 104,4 5 -
period attributable to
preference equity holders.
Earnings per share from
continuing operations
Basic earnings for the 75,3 1,3 5 193,2
period attributable to
ordinary equity holders
adjusted on a two for one
basis*
Basic earnings for the - 68,9 5 -
period attributable to
preference equity holders
Diluted earnings for the 75,0 1,3 5 193,2
period attributable to
ordinary equity holders
adjusted on a two for one
basis*
Diluted earnings for the - 68,9 5 -
period attributable to
preference equity holders.
Headline earnings per
share
Headline earnings for the 73,2 0,9 6
period attributable to 33,1
ordinary equity holders
adjusted on a two for one
basis .*
Headline earnings for the - 48,6 6 -
period attributable to
preference equity holders
Diluted headline earnings 72,8 0,9 6 33,1
for the period
attributable to ordinary
equity holders adjusted on
a two for one basis.*
Dulited headline earnings - 48,6 6 -
for the period
attributable to preference
equity holders
Headline earnings from
continuing operations per
share
Headline earnings for the 73,2 0,3 6 12,3
period attributable to
ordinary equity holders
adjusted on a two for one
basis*
Headline earnings for the - 13,1 6 -
period attributable to
preference equity holders
Diluted headline earnings 72,8 0,3 6 12,3
for the period
attributable to ordinary
equity holders on a two
for one basis*
Dulited headline earnings - 13,1 6 -
for the period
attributable to preference
equity holders
* The ordinary shares were sub divided on a two for one basis on 4 November
2010. The comparative figures for the year ended 30 June 2010 and for the six
months ended on 31 December 2009 were restated accordingly.
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2010
Unaudited Unaudited Notes Audited
as at as at as at
31 December 31 December 30 June 2010
2010 2009
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and
equipment 967 660 915 604 914 413
Investment properties 985 1 034 1 010
Intangible assets 294 744 286 821 287 060
Other investments - 2 -
Deferred tax assets 2 516 134 312 18 740
1 265 905 1 337 773 1 221 223
Current assets
Inventories 561 610 527 993 465 994
Trade and other receivables
Prepayments 1 032 568 952 473 807 463
Income tax receivable 9 884 7 138 6 170
Cash and short-term 1 492 - -
deposits
792 411 963 758 429 274
2 397 965 2 451 362 1 708 901
Assets classified as held- 937 741 421 1 979
for-sale
2 398 902 3 192 783 1 710 880
Total assets 3 664 807 4 530 556 2 932 103
Equity and liabilities
Equity attributable to
equity holders of the
parent
Issued capital 8 598 17 793 7 6 192
Share premium 602 269 123 277 7 115 348
Treasury share capital and
share premium - ( 977) -
Other reserves 245 786 842 443 242 188
Retained earnings 740 566 556 545 684 631
1597 219 1539 081 1 048 359
Non-controlling interests 27 318 26 995 28 108
Total equity 1624 537 1566 076 1 076 467
Non-current liabilities 594 790 460 429 592 504
Interest-bearing loans and - 241 -
borrowings 53 210 59 303 50 357
Share-based payments 11 895 6 016 6 363
Provisions 8 145 - 6 320
Deferred tax liabilities
Trade and other payables
668 040 525 989 655 544
Current liabilities
Trade and other payables 1 320 130 1 302 172 1 115 327
Proceeds on disposal of
associated company received
in advance - 1 085 000 -
Interest-bearing loans and
borrowings 35 622 33 653 66 947
Income tax payable - 1 011 1 368
Provisions 16 478 16 655 16 450
1 372 230 2 438 491 1 200 092
Total liabilities 2 040 270 2 964 480 1 855 636
Total equity and 3 664 807 4 530 556 2 932 103
liabilities
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2010
Oridinary Oridinary Preference Treasury Other
and and share capital share capital
preference preference and premium capital reserves
share share transferred and
capital premium to debt premium
issued
R`000 R`000 R`000 R`000 R`000
Balance at 1 July 17 498 270 425 (149 393) (4 024) 848
026
2009
Profit for the
period
Other
comprehensive
income
Total
comprehensive
income
Preference
Shares issued 295 8 967 (4 464)
Reversal of debt
portion on issue
of treasury
preference shares (2 258)
Treasury
Preference
shares issued to
executives 3 047
Dividends of
subsidiaries
Preference shares
repaid
Balance at 31 17 793 279 392 (156 115) (977) 848 026
December 2009
Profit for the
period
Other
comprehensive
income
Total
comprehensive
income
Reduction in (3 088)
ordinary share
capital - HCI
Reduction in ( 504)
ordinary share
capital -
Stabilisation
Trust
Ordinary shares 935 86 394
issued
Increase in debt (103 267)
portion on
conversion of
preference shares
to redeemable
preference shares
Increase in ( 41)
ordinary treasury
shares
Ordinary treasury 1 018
shares realised
and written off on
deconsolidation of
CIL Stabilisation
Trust
Share based 733
payment
transaction
Transfer to (600
194)
retained earnings
Buy-back of equity
rights of
preference shares
(Special dividend)
Balance at 30 June 15 136 365 786 (259 382) - 248
565
2010 (Audited)
Foreign Retained Total Non- Total
currency earnings controlling Equity
translation interests
reserve
R`000 R`000 R`000 R`000 R`000
Balance at 1 July (4 439) 462 029 1440 122 40 886 1481
008
2009
Profit for the
period 94 516 94 516 3 635 98 151
Other
comprehensive
income (1 144) (1 144) ( 433) (1 577)
Total
comprehensive
income (1 144) 94 516 93 372 3 202 96 574
Preference
Shares issued 4 798 4 798
Reversal of debt
portion on issue
of treasury
preference shares (2 258) (2 258)
Treasury
Preference
shares issued to
executives 3 047 3 047
Dividends of
subsidiaries - (1 884) (1 884)
Preference shares
repaid - (15 209) (15 209)
Balance at 31 (5 583) 556 545 1 539 081 26 995 1 566
076
December 2009
Profit for the ( 794) 236 303 236 303 1 459 237
762
period
Other
comprehensive ( 794) ( 346) (1 140)
income
Total ( 794) 236 303 235 509 1 113 236 622
comprehensive
income
Reduction in (337 363) (340 451) (340
451)
ordinary share
capital - HCI
Reduction in ( 504) ( 504)
ordinary share
capital -
Stabilisation
Trust
Ordinary shares 87 329 87 329
issued
Increase in debt (103 267) (103
267)
portion on
conversion of
preference shares
to redeemable
preference shares
Increase in ( 41) ( 41)
ordinary treasury
shares
Ordinary treasury (1 018) - -
shares realised
and written off on
deconsolidation of
CIL Stabilisation
Trust
Share based 733 733
payment
transaction
Transfer to 600 194 - -
retained earnings
Buy-back of equity
rights of
preference shares
(Special dividend) (370 030) (370 030) (370 030)
Balance at 30 June (6 377) 684 631 1048 359 28 108 1 076
467
2010 (Audited)
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2010
Oridinary and Oridinary and Preference Treasury Other
preference preference share capital share capital
share capital share and premium capital reserves
issued premium/ transferred to and
debt premium
R`000 R`000 R`000 R`000 R`000
Balance at 30 15 136 365 786 (259 382) - 248
565
June 2010
Profit for the
period
Other
comprehensive
income
Total
comprehensive
income
Ordinary shares 2 407 499 929
Issued
Share issue cost (13 009)
Dividends
Dividends of
subsidiaries
Share based 4 395
payment reserve
Balance at 31 17 543 852 706 (259 382) - 252
960
December 2010
(Unaudited)
Foreign Retained Total Non- Total
Equity
currency earnings controlling
translation interests
reserve
R`000 R`000 R`000 R`000 R`000
Balance at 30 (6 377) 684 631 1 048 359 28 108 1 076
467
June 2010
Profit for the 96 743 96 743 1 163 97 906
period
Other (797) (797) (147) (944)
comprehensive
income
Total (797) 96 743 95 946 1 016 96 962
comprehensive
income
Ordinary shares
Issued 502 336 502 336
Share issue cost (13 009) (13 009)
Dividends (40 808) (40 808) (40 808)
Dividends of - (1 806) (1 806)
subsidiaries
Share based 4 395 - 4 395
payment reserve
Balance at 31 (7 174) 740 566 1 597 219 27 318 1 624
537
December 2010
(Unaudited)
INTERIM CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 December 2010
Unaudited Unaudited Notes Audited
Six months ended Year ended
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
Operating activities
Profit before tax from 149 984 69 650 495 452
continuing operations
Tax paid (33 181) (30 366) (102 124)
Adjustments to reconcile
profit before tax to net
cash flow
Adjustment for non cash
items:
Depreciation and 45 160 44 759 89 253
impairment of property,
plant and equipment
Impairment of plant - - 10 732
included in restructuring
cost
Amortisation and 3 947 3 857 7 438
impairment of intangible
assets
Depreciation investment 24 187 48
properties
Foreign exchange loss 759 2 181 2 005
Impairment of assets held- - - 1 013
for-sale
Movement in provisions 2 881 (1 228) (10 205)
Movement in longterm 1 825 - 6 320
incentive bonus
provisions
Profit on disposal of - - (337 682)
investment in associated
company
Profit on disposal and (3 827) (42 741) (49 011)
scrapping of assets
Foreign exchange 1 595 544 959
differences on fixed
assets
Movement in provision 4 395 (873) (382)
for share based payments
Other Adjustments
Finance cost 32 775 61 178 90 871
Finance income (6 770) (7 726) (27 353)
Dividends received - (650) (649)
Working capital
adjustments
Decrease/(increase) in (95 616) 1 227 63 226
inventories
Increase in trade and (228 819) (163 788) (17 810)
other receivables
Increase in trade and 204 803 311 821 124 976
other payables
Net cash flow from 79 935 248 032 347 077
operating activities
Investing activities
Proceeds from sale of 5 887 150 839 155 661
property, plant and
equipment
Proceed on disposal of - 1 085 000 -
associate company
received in advance
Foreign exchange loss (759) (2 181) (2 005)
Interest received 6 770 7 726 27 353
Proceeds on sale of other - - 3
investments
Dividends received - 650 649
Proceed on sale of - - 1 079 560
associated company
Increase of investment in - (150 051) (150 554)
associated company
Capital expenditure: (101 023) (42 306) (98 089)
tangible assets
Capital expenditure: (11 628) (1 516) (5 527)
intangible assets
Foreign currency (797) (1 154) (1 938)
translation reserve
Net cash flow (used in) / (101 550) 1 047 007 1 005 113
from investing activities
Net cash (outflow) / (21 615) 1 295 039 1 352 190
inflow before financing
activities
Financing activities
Interest paid (32 775) (61 178) (90 871)
Dividends paid (40 808) (29 984) (400 014)
Repayment of preference - (50 000) (50 000)
share liability in
subsidiary company
Decrease in non- (1 953) (2 317) (2 665)
controlling interest
Proceeds from issue of - 9 262 9 262
preference shares
Treasury shares sold - 789 3 006
Ordinary share buy back - - (340 955)
Proceeds from issue of 502 336 - 87 329
ordinary shares
Share issue cost (13 009) - -
Repayment of borrowings (29 039) (471 824) (450 515)
Proceeds from borrowings - - 38 536
Net cash flows from / 384 752 (605 252) (1196 887)
(used in) financing
activities
Net increase in cash and 363 137 689 787 155 303
cash equivalents
Cash and cash equivalents 429 274 273 971 273 971
at the beginning of the
period
Cash and cash equivalents
at the end of the period
792 411 963 758 429 274
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 CORPORATE INFORMATION
Clover is a company incorporated and domiciled in South Africa. The unaudited
consolidated financial statements of the Group for the six months ended 31
December 2010 comprise the Company and its subsidiary companies (together
referred to as the "Group"). The companies within the Group have coterminous
year-ends.
The unaudited interim condensed financial statements of Clover for the six
months ended 31 December 2010 were authorised for issue in accordance with a
resolution of the Directors on 10 March 2011.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION
The interim condensed consolidated financial statements for the six months
ended 31 December 2010 have been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting Standards
("IFRS"), the presentation as well as the disclosure requirements of IAS 34
Interim Financial Reporting, the listing Requirements of the JSE Limited and
the requirements of the South African Companies Act.
The interim condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Group`s annual financial statements as
at 30 June 2010.
2.2 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group`s annual financial statements for the year ended 30
June 2010.
3 SEASONALITY OF RESULTS
The Group`s operating results from normal trading activities for the first
semester are traditionally better than the second semester. High sales volumes
during the December festive season, and November in anticipation of the
festive season, are much higher than Easter sales volumes during the second
semester. Beverage volumes are also higher during the warm spring and summer
months. Raw milk intake reaches a peak during late spring and early summer and
because all these peak milk volumes are not sold by end December, stock levels
normally increase towards the end of December and are then gradually depleted
towards the end of the financial year. Stock level increases consume cash and
the first semester is therefore a weaker cash flow period than the second
semester when the stock is sold.
4 SEGMENT REPORTING
Segment information is presented in respect of the Group`s business segments.
The business segments are based on the Group`s management and internal
reporting structure. Inter-segment pricing is determined on an arm`s length
basis. Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on a
reasonable basis.
BUSINESS SEGMENTS
The Group comprises the following main business segments:
- The dairy products segment is focused on providing the market with quality
dairy products. Other dairy consist of Clover Botswana, Clover Zambia, Clover
Fonterra, Clover Swaziland and Clover Namibia.
- The non-alcoholic beverages segment focus on the development and marketing
of non-alcoholic, value-added branded beverages products.
- "Other" in the tables below consist of Clover Industries Ltd holding
company and Laktolab (Pty) Ltd that render laboratory services.
OPERATING SEGMENTS
The following tables present revenue, profit and assets and liability
information of the Group`s operating segments for the six months ended 31
December 2010 and 2009, respectively, as well as for the year ended 30 June
2010.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
31 December 2010 Dairy products Non alcoholic
beverages
SEGMENT REPORT Clover S.A. Other Total Clover Other
Beverages
R`000 R`000 R`000 R`000 R`000
Statement of
income
External revenue 2 532 543 216 178 2 748 721 593 802 2 162
Inter-segment 244 621 1 548 246 169 - -
revenue
Total revenue 2 777 164 217 726 2 994 890 593 802 2 162
Revenue 2 777 164 217 726 2 994 890 593 802 2 162
Cost of sales (2 012 676) (179 268) (2 191 944) (369 836) (2
123)
Gross profit 764 488 38 458 802 946 223 966 39
Depreciation (46 700) (645) (47 345) (1 384) (7)
Other (cost) / (615 586) (27 836) (643 422) (158 828) (7
715)
income
Recurring 102 202 9 977 112 179 63 754 (7
683)
operating
profit/ (loss)
Dividends 24 039 - 24 039 - -
received
Restructuring (3 388) (204) (3 592) - 441
expenses
Operating profit 122 853 9 773 132 626 63 754 (7
242)
as per statement
of comprehensive
income
Net financing (14 635) (883) (15 518) 7 263 1
cost
Profit / (loss) 108 218 8 890 117 108 71 017 (7
241)
before taxation
Income tax (24 147) (2 654) (26 801) (19 885) 2 074
expense
Profit / (loss) 84 071 6 236 90 307 51 132 5
167)
for the period
Assets and
liabilities
Segment assets 3 426 773 196 799 3 623 572 378 770 4 528
Segment 2 405 941 150 871 2 556 812 19 733 9 253
liabilities
31 December 2010 Other Consolidated - Total
SEGMENT REPORT Clover Industries Adjustments and Clover Industries
and Laktolab eliminations Group
R`000 R`000 R`000
Statement of income
External revenue 4 592 - 3 349 277
Inter-segment revenue - (246 169) -
Total revenue 4 592 (246 169) 3 349 277
Revenue 4 592 (246 169) 3 349 277
Cost of sales (1 477) 113 013 (2 452 367)
Gross profit 3 115 (133 156) 896 910
Depreciation (241) (187) (49 164)
Other (cost) / income 16 270 133 156 (660 539)
Recurring operating 19 144 (187) 187 207
profit/ (loss)
Dividends received 461 012 (485 051) -
Restructuring (8 067) - (11 218)
expenses
Operating profit as 472 089 (485 238) 175 989
per statement of
comprehensive income
Net financing cost (17 751) - (26 005)
Profit / (loss) 454 338 (485 238) 149 984
before taxation
Income tax expense (7 466) - (52 078)
Profit / (loss) for 446 872 (485 238) 97 906
the period
Assets and
liabilities
Segment assets
Segment Assets 830 928 (1 174 483) 3 663 315
Segment liabilities 277 674 (824 694) 2 038 778
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
31 December 2009* Dairy products Non
(Restated) alcoholic
beverages
SEGMENT REPORT Clover S.A. Total Clover
Other Beverages/
R`000 R`000 R`000 R`000
Statement of
income
External revenue 2 491 232 180 102 2 671 334 551 287
Inter-segment 37 821 2 938 40 759 -
revenue
Total revenue 2 529 053 183 040 2 712 093 551 287
Revenue 2 529 053 183 040 2 712 093 551 287
Cost of sales (1 789 083) (138 953) (1 928 036) (341
881)
Gross profit 739 970 44 087 784 057 209 406
Depreciation (46 154) (449) (46 603) (1 665)
Other (cost) / (631 941) (36 802) (668 743) (144
180)
income
Recurring 61 875 6 836 68 711 63 561
operating profit
Profit from sale 93 365 - 93 365 -
of Boksburg
properties
Dividends 22 096 - 22 096 -
received
Restructering (77 688) - (77 688) (1 206)
cost
Operating profit 99 648 6 836 106 484 62 355
as per statement
of comprehensive
income
Net financing (51 562) 188 (51 374) 4 640
cost
Profit before 48 086 7 024 55 110 66 995
taxation
Income tax 23 953 (2 639) 21 314 (18
758)
expense
Profit for the 72 039 4 385 76 424 48 237
period after tax
Profit after tax - - - -
for the period
from discontinued
operations
Profit for the 72 039 4 385 76 423 48 237
period
Assets and
liabilities
Segment assets 3 502 374 129 377 3 631 751 368 569
Segment 2 748 070 81 551 2 829 621 76 017
liabilities
30 June 2010 Non
alcoholic
beverages
Dairy products
SEGMENT REPORT Clover S.A. Other Total Clover
Beverages/
R`000 R`000 R`000 R`000
Statement of
Income
External revenue 4 596 983 333 951 4 930 934 1 055
800
Inter-segment 459 706 5 383 465 089 -
revenue
Total revenue 5 056 689 339 334 5 396 023 1 055
800
Revenue 5 056 689 339 334 5 396 023 1 055
800
Cost of sales (3 644 520) (261 320) (3 905 840) (658
427)
Gross profit 1 412 169 78 014 1 490 183 397 373
Depreciation (92 856) (1 035) (93 891) (3 169)
Other (cost) / (1 161 719) (66 645) (1 228 364) (284
253)
income
Recurring 157 594 10 334 167 928 109 951
operating profit
Profit from sale 908 981 - 908 981 -
of Danone Clover
Profit from sale 93 365 - 93 365 -
of Boksburg
properties
Dividends 25 675 - 25 675 -
received
Restructuring (131 442) - (131 442) (1 289)
expenses
Operating profit 1 054 173 10 334 1 064 507 108 662
as per statement
of comprehensive
income
Net financing (55 351) (24) (55 375) 9 068
cost
Profit before 998 822 10 310 1 009 132 117 730
taxation
Income tax (127 905) (5 215) (133 120) (32 933)
expense
Profit for the 870 917 5 095 876 012 84 797
year after tax
Profit after tax - - - -
for the period
from discontinued
operations
Profit for the 870 917 5 095 876 012 84 797
year
Assets and
liabilities
Segment assets 3 151 070 140 722 3 291 792 374 363
Segment 1 757 693 96 770 1 854 463 45 249
liabilities
31 December Other Consolidated Discontinued
Consolidated
2009* - Continuing operation - Total/
(Restated) operations
SEGMENT REPORT Clover Adjustments Clover Danone Clover Clover
Industries and Industries Industries
and eliminations Group/ Group
Laktolab
R`000 R`000 R`000 R`000 R`000
Statement of
income
External 4 548 (204 301) 3 022 868 - 3 022 868
revenue
Inter-segment - (40 759) - - -
revenue
Total revenue 4 548 (245 060) 3 022 868 - 3 022 868
Revenue 4 548 (245 060) 3 022 868 - 3 022 868
Cost of sales (1 522) 125 245 (2 146 194) - (2 146
194)
Gross profit 3 026 (119 815) 876 674 - 876 674
Depreciation (121) (237) (48 626) - (48 626)
Other (cost) / 14 564 120 839 (677 520) - 677 520
income
Recurring 17 469 787 150 528 - 150 528
operating
profit
Profit from - (42 546) 50 819 - 50 819
sale of
Boksburg
properties
Dividends 30 649 (52 096) 649 - 649
received
Restructering - - (78 894) - (78 894)
cost
Operating 48 118 (93 855) 123 102 - 123 102
profit as per
statement of
comprehensive
income
Net financing (6 718) - (53 452) - (53 452)
cost
Profit before 41 400 (93 855) 69 650 - 69 650
taxation
Income tax (6 178) - (3 622) - (3 622)
expense
Profit for the 35 222 (93 855) 66 028 - 66 028
period after
tax
Profit after - - - 32 123 32 123
tax for the
period from
discontinued
operations
Profit for the 35 222 (93 855) 66 028 32 123 98 151
period
Assets and
liabilities
Segment assets 505 311 24 925 4 530 556 - 4 530 566
Segment 208 356 -149 514 2 964 480 - 2 964 480
liabilities
30 June 2010 Other Consolidated Discontinued
Consolidated
- Continuing operation - Total/
operations
SEGMENT REPORT Clover Adjustments Clover Danone Clover Clover
Industries and Industries Industries
and eliminations Group/ Group
Laktolab
R`000 R`000 R`000 R`000 R`000
Statement of
Income
External 9 006 - 5 995 740 - 5 995 740
revenue
Inter-segment - (465 089) - - -
revenue
Total revenue 9 006 (465 089) 5 995 740 - 5 995 740
Revenue 9 006 (465 089) 5 995 740 - 5 995 740
Cost of sales (2 984) 238 557 (4 328 694) - (4 328
694)
Gross profit 6 022 (226 532) 1 667 046 - 1 667 046
Depreciation (335) (358) (97 753) - (97 753)
Other (cost) / 26 187 236 415 (1 250 015) - (1 250
015)
income
Recurring 31 874 9 525 319 278 - 319 278
operating
profit
Profit from - (571 299) 337 682 - 337 682
sale of Danone
Clover
Profit from - (42 546) 50 819 - 50 819
sale of
Boksburg
properties
Dividends 195 649 (220 675) 649 - 649
received
Restructuring (16 727) - (149 458) - (149 458)
expenses
Operating 210 796 (824 995) 558 970 - 558 970
profit as per
statement of
comprehensive
income
Net financing (17 211) - (63 518) - (63 518)
cost
Profit before 193 585 (824 995) 495 452 - 495 452
taxation
Income tax (63 594) 37 985 (191 662) - (191 662)
expense
Profit for the 129 991 (787 010) 303 790 - 303 790
year after tax
Profit after - - - 32 123 32 123
tax for the
period from
discontinued
operations
Profit for the 129 991 (787 010) 303 790 32 123 335 913
year
Assets and
liabilities
Segment assets 497 605 (1 231 657) 2 932 103 - 2 932 103
Segment 838 285 (882 361) 1 855 636 - 1 855 636
liabilities
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Unaudited Audited
Six months Year ended
ended
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
5 Earnings and diluted earnings per
share
The preference shares participated in the ordinary dividends with the
ordinary shares proportionate to the par value of ordinary shares and the
issue prices of the preference shares, up to 31 May 2010. Even though
preference shares only participate in earnings to the extent that ordinary
dividends have been declared, earnings per share and diluted earnings per
share are disclosed for both ordinary as well as preference shares based
on the dividend rights associated with the type of shares. On 31 May 2010
the preference shares were converted into redeemable preference shares and
the rights of preference shares to ordinary dividends were suspended.
5.1 Profit attributable to the
different classes of shares
Profit attributable to ordinary 96 743 3 151 330 819
shareholders of the parent
company
Profit attributable to preference - 91 365 -
shareholders of the parent
company
Profit attributable to 96 743 94 516 330 819
shareholders of the parent
company
Profit from a discontinued - 32 123 32 123
operation
Profit from continued operations 96 743 62 393 298 696
Profit from continued operations
attributable to the different
classes of shares
Profit attributable to ordinary 96 743 2 080 298 696
shareholders of the parent
company
Profit attributable to preference 60 313
shareholders of the parent
company
Profit attributable to 96 743 62 393 298 696
shareholders of the parent
company
5.2 Weighted and diluted weighted
average number of issued ordinary
shares
Number of Number of Number of
shares shares shares
Weighed average number of issued 128 404 439 88 485 311 86 302 270
ordinary shares
Less: Weighted average number of - (9 773 771) (9 004 549)
treasury shares
Total weighted average number of 128 404 439 78 711 540 77 297 721
issued ordinary shares
Total weighted average number of 128 404 439 157 423 080 154 595 442
issued ordinary shares adjusted
on a two for one basis
Total weighted average number of 129 064 377 157 423 080 154 595 442
issued ordinary share for
calculating of diluted earnings
per share adjusted on a two for
one basis
5.3 Weighted and diluted average
number of issued preference
shares
Number of Number of Number of
shares shares shares
Number of issued preference - 89 442 022 -
shares
Total weighted and diluted - 87 475 733 -
average number of issued
preference shares
6 Headline earnings
As headline earnings were not
disclosed in the annual financial
reports at 30 June 2010, it was
not audited
96 743 94 516 330 819
Profit attributable to equity
holders of the parent
Adjusted for:
Loss/(profit) on sale and (3 826) (2 653) 908
scrapping of property plant and
equipment
Profit on the sale of Boksburg - (50 818) (50 818)
factory
Profit on sale of Danone Clover - (337 682)
Impairment of plant and equipment - 10 532 10 732
recognised as restructuring cost
Impairment of property, plant and - 814
assets held for sale
Tax adjustment on the above items 1 071 (7 596) 96 347
Total of adjustments (2 755) (50 535) (279 699)
Headline earnings 93 988 43 981 51 120
Attributable to:
Continuing operations 93 988 11 858 18 997
Discontinued operations - 32 123 32 123
93 988 43 981 51 120
7 Share capital and share premium
Authorised share capital
2 billion (2009: 100 million) 10 000 10 000 10 000
ordinary shares with a par value
of 5 cents (2009: 10 cents) each
100 million cumulative preference 10 000 10 000 10 000
shares with a par value of 10
cents each
Issued share capital
172,0 million (2009: 88,5 8 598 8 849 6 192
Million) ordinary shares with a
par value of 5 cents (2009: 10
cents) each
89,4 million (2009: 89,4 Million) 8 944 8 944 8 944
preference shares with a par
value of 10 cents each
Total issued share capital 17 542 17 793 15 136
Debt portion of preference share 8 944 - 8 944
capital
Total issued share capital net of 8 598 17 793 6 192
debt
Share premium
Ordinary share premium 601 790 28 476 114 870
Preference share premium 250 916 250 916 250 916
Debt portion of preference share (250 437) (156 115) (250 438)
premium
Total share premium 602 269 123 277 115 348
8 Dividends
Mandatory dividends paid to
preference shareholders are
recognised as finance cost.
During the period equity
dividends were declared as
follows:
To ordinary shareholders 40 808 - -
To preference shareholders - - 370 030
Total dividends declared 40 808 - 370 030
Cents per Cents per Cents per
share share share
Dividend per share based on the
number of shares issued on the
date of payment
To ordinary shareholders 65,9 - -
To preference shareholders - - 413,7
9. Dividend declaration
Notice is hereby given that an ordinary cash dividend has been declared for
the six months ended 31 December 2010, payable in South African currency, on
04 April 2011 and amounts to 10 cents per share.
The salient dates will be as follows:
Last day to trade cum the dividend Friday, 25 March 2011
Shares commence trading "ex" distribution Monday, 28 March 2011
Record date Friday, 01 April 2011
Payment date Monday, 04 April 2011
Share certificates may not be dematerialised or rematerialised between Monday,
28 March 2011 and Friday, 01 April 2011, both days inclusive.
Johannesburg
10 March 2011
DIRECTORATE
NON-EXECUTIVE MILK PRODUCER DIRECTORS
JAH Bredin (Chairman), WI Buchner (Vice-chairman), HPF du Preez, VP Turner
(Resigned: 10 March 2011), MG Elliot, JC Hendriks (Dr), JW Lotz (Resigned: 7
October 2010), MG MacKenzie (Resigned: 7 October 2010), FG Meyer (Resigned: 7
October 2010/Bedank: 7 Oktober 2010)
NON-EXECUTIVE INDEPENDENT DIRECTORS
TA Wixley (Lead Independent Director), SF Booysen (Dr) (Appointed: 7 October
2010), JN du Plessis (Appointed: 7 October 2010, NP Mageza (Appointed: 22
October 2010), DK Smith (Resigned: 22 October 2010)
EXECUTIVE DIRECTORS
JH Vorster (Chief Executive), HB Roode (Deputy Chief Executive), LJ Botha
(Chief Financial Officer), CP Lerm (Dr
COMPANY SECRETARY
HB Roode
ADMINISTRATION
COMPANY REGISTRATION NUMBER
2003/030429/06
JSE Codes
Ordinary Share Code: CLR ISIN: ZAE000152377
Preference Share Code: CLRP ISIN: ZAE000152385
REGISTERED OFFICE
200 Constantia Drive, Constantia Kloof, 1709
TELEPHONE 011 471 1400
TELEFAX 011 471 1504
INTERNET ADDRESS
www.clover.co.za
AUDITORS
Ernst & Young Incorporated
BANKERS
The Absa Group
First National Bank
Investec Bank
ATTORNEYS
Werksmans
Roestoff, Venter and Kruse
Kocks and Dreyer
SPONSOR
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 14/03/2011 07:55:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
