Clover Corporation's Financial Year 2024: Revenue and Profit Decline
CLV (CLV) Share Update September 2024 Monday 23rd
Clover Corporation Reports Significant Decline in Annual Revenue and Profit
Clover Corporation Limited (ASX: CLV) has released its preliminary final report for the financial year ended 31 July 2024, revealing a substantial decline in both revenue and net profit.
Instant Summary:
- Total revenue decreased by 22.1% to $62.2 million.
- Net profit after tax fell by 76% to $1.5 million.
- Final dividend of 0.75 cents per share, fully franked.
- Basic and diluted earnings per share dropped to 0.91 cents from 3.72 cents.
Financial Performance Overview
Clover Corporation Limited has reported a challenging financial year, with total revenue dropping by 22.1% to $62.2 million, down from $79.9 million in the previous year. This significant decline in revenue has been coupled with a sharp decrease in net profit after tax, which fell by 76% to $1.5 million, compared to $6.2 million in the previous year.
The company's profit before income tax also saw a notable decline, falling from $8.4 million in 2023 to $1.9 million in 2024. This reduction in profitability is attributed to various factors, including increased interest expenses, which rose from $730,000 to $899,000, and higher raw materials, consumables, and conversion costs, which totaled $45.3 million.
Dividend and Earnings
Despite the challenging financial performance, Clover Corporation has declared a final dividend of 0.75 cents per share, fully franked, to be paid on 18 November 2024. This is consistent with the final dividend paid in the previous year. However, the interim dividend for the current period was not declared, compared to 0.75 cents per share in the previous year.
Basic and diluted earnings per share have both decreased significantly, falling to 0.91 cents from 3.72 cents in the previous year. The net tangible asset backing per ordinary share after tax also saw a slight decrease, from 39.07 cents to 39.02 cents.
Comprehensive Income and Cash Flow
The total comprehensive income for the period, including foreign currency translation adjustments, amounted to $1.1 million, down from $7.0 million in the previous year. The company's cash flow from operating activities saw an increase, with net cash inflow rising to $8.5 million from $6.7 million in the previous year.
However, net cash outflows were reported in both investing and financing activities, resulting in a net increase in cash held of $2.8 million, bringing the total cash at the end of the year to $12.3 million.
The significant decline in revenue and profit is likely to affect Clover Corporation's stock price negatively. Investors may react to the reduced profitability and the absence of an interim dividend. The company's ability to manage costs and improve revenue streams will be crucial in maintaining investor confidence.
Investor Reaction:
Analysts are expected to express concerns over the sharp decline in revenue and profit. The absence of an interim dividend may also be viewed negatively by investors. However, the declaration of a final dividend could provide some reassurance.
Conclusion:
Investors should closely monitor Clover Corporation's strategic responses to these financial challenges. The company's efforts to manage costs and enhance revenue will be key to its future performance. Staying informed on Clover Corporation's updates and market trends will be essential for making informed investment decisions.