Clover Corporation's Financial Turnaround in FY24
CLV (CLV) Share Update September 2024 Monday 23rd
Clover Corporation Reports Improved Second Half Results for FY24
Clover Corporation Limited (ASX: CLV), a leading provider of innovative nutritional ingredients, has announced its financial results for the fiscal year 2024 (FY24). Despite a challenging year, the company reported significant improvements in the second half.
Instant Summary:
- Net Sales Revenue for FY24: $62.2 million (FY23: $79.9 million)
- Net Profit after Tax for FY24: $1.5 million (FY23: $6.2 million)
- Second half revenue: $34.9 million (1H: $27.3 million), a 28% increase
- Second half NPAT: $2.1 million (1H NPAT: -$0.6 million)
- Successful commissioning of the Ecuador fish oil facility
- Introduction of a new powdered Choline product
- Dividend declared: 0.75 cent per share
Financial Performance
Clover Corporation reported a Net Sales Revenue of $62.2 million for FY24, in line with its guidance but down from $79.9 million in FY23. The Net Profit after Tax (NPAT) for FY24 was $1.5 million, a decrease from $6.2 million in the previous year.
The second half of FY24 saw a remarkable turnaround, with revenue increasing to $34.9 million from $27.3 million in the first half, representing a 28% rise. The NPAT for the second half was $2.1 million, compared to a loss of $0.6 million in the first half.
Strategic Developments
Clover Corporation made significant strides in its strategic initiatives. The Ecuador fish oil facility was successfully commissioned on time and within budget, enhancing Clover's vertical integration and ensuring supply, quality, and cost efficiency. Fish oil, which constitutes 50% of Clover's cost of goods, will now be more efficiently managed.
The company also introduced a powdered Choline product, which has successfully moved from laboratory trials to scaled production. Choline is essential for lipid deposition in the human body and is a specified ingredient in infant formula and prenatal products. This new product is expected to open new markets for Clover.
Improved Performance and Future Prospects
The latter half of FY24 experienced improved demand, driven by increased sales in China, New Zealand, and Asia. Infant formula manufacturers recovered, and customers transitioned from trials to commercialization. Despite facing inflationary pressures, freight issues, and competitive pricing, Clover focused on new customers and applications, supporting future gross margins.
Clover expanded its stake in Melody Dairies (NZ) from 41.9% to 43.9% during FY24. Changes in the shareholding further aligned the focus on maximizing usage of the facility. The factory achieved a small profit in the last quarter under new management.
Dividend Declaration
Based on the company's underlying performance and cash position, the Directors have declared a fully franked final dividend for FY24 of 0.75 cent per share. Relevant dates for the dividend are:
- Ex-dividend Date: Monday, 21 October 2024
- Record Date: Tuesday, 22 October 2024
- Payment Date: Monday, 18 November 2024
The improved performance in the second half of FY24 is a positive indicator for Clover Corporation's future. The successful commissioning of the Ecuador facility and the introduction of new products like powdered Choline are expected to enhance the company's market position and profitability. The declared dividend also reflects the company's confidence in its financial stability.
Investor Reaction:
Analysts are likely to react positively to Clover Corporation's second-half performance and strategic developments. The successful commissioning of the Ecuador facility and the introduction of new products are seen as strong steps towards future growth. However, the overall decrease in annual revenue and profit may temper some of the enthusiasm.
Conclusion:
Investors should take note of Clover Corporation's strategic advancements and improved second-half performance. The company's focus on vertical integration and new product development positions it well for future growth. The declared dividend is a positive sign of financial health. Staying informed on Clover's progress will be crucial for making informed investment decisions.