South African branded food group Clover Industries booked a jump in full-year earnings on the back of higher selling prices and higher operating margins.
The company said this morning (16 September) sales rose 8.6% in the year to 30 June, climbing to ZAR9.3bn. Sales growth was driven by price increases and CEO Johann Vorster said that getting the right balance between market share and price points remained a "challenge".
"Given Clover's strong brands and price elasticity, finding an optimal balance between volumes, market shares and price points remains a challenge, influenced by seasonality, levels of discretionary spend and input costs. This process is ongoing for each product category," Vorster said.
Operating profit jumped 80.3% to ZAR509.1m, boosted by a 2.2% increase in operating margin which rose to 5.5% of sales. Headline EPS, a key performance metric in South Africa, increased 69% to 173.6 cents.
During the year, Clover completed some key acquisitions that enabled it to participate in the ongoing sector consolidation process, Vorster said. "During the year under review, we successfully consolidated a number of opportunities in the market. We acquired Dairybelle's yoghurt and UHT businesses as well as Nkunzi Milkyway, the manufacturer of Ayrshire milk and other niche products for and on behalf of Woolworths."
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