JSE-listed branded consumer goods and beverages group Clover on Tuesday said the 2013 financial year had been one of the “most tremendous” years as the completion of the group’s three-year, multimillion-rand Project Cielo Blu, as well as other significant investments in new products and technologies, set a solid platform for future growth.

The Cielo Blu project, which kicked off at the end of 2010 when Clover listed on the JSE, was expected to rectify historical structural and supply-chain inefficiencies, Clover CEO Johann Vorster said.

This year was the year that the bulk of the project happened, he noted, adding that, “We are very proud of Project Cielo Blu”, which was now nearing completion within budget and on schedule.

The steady migration of dairy farmers to the coast saw Clover invest significant time and resources over the last three years in relocating and repositioning its inland dairy production facilities to Pinetown and Port Elizabeth – nearer the raw materials source – as well as expanding and increasing the production capacity of all of its factories.

Clover was currently moving its beverage production plant from Mayfair, in Johannesburg, to its Clayville facility, in Midrand. This was expected to be completed by the first week in October, with all the machines being commissioned and coming online “one after the other”, he said.

“The successful implementation of Project Cielo Blu will deliver benefits for Clover now and over the long term and will help to mitigate input and high transportation costs.

“It has been disruptive and we have had teething problems with machines being moved but, overall, we are very excited about what has happened this last year,” he told Engineering News Online.

Clover had also launched new technical platforms, including the introduction of an 18-day extended-shelf-life milk and new prisma packaging for milk and beverage products.

Vorster commented that many technical challenges had been overcome in the year under review, which had positioned Clover well going forward and allowed the company to narrow its focus to actively pursue other opportunities in South Africa and the rest of the continent, and to enter new geographies, develop new products and embark on other expansion projects in Africa.

“Long-term investments are paramount to take Clover to the next level of growth and we are confident that the investments made since listing have laid a solid platform for the future,” noted Vorster.

Clover had, during the year, acquired The Real Juice Co and had concluded a transaction with Nestlé to establish a new beverage company called Clover Waters.

From August 2013, Clover Waters started to manufacture and distribute both Clover and Nestlé’s ranges of water and iced tea products such as Nestlé Pure Life and Nestea.

FINANCIAL RESULTS
The group on Tuesday reported higher earnings for the year ended June 2013, supported by a second-half recovery.

Clover had rallied after investments in new products and platforms, increases in other fixed costs, and costs associated with labour-related disruptions had impacted on its first-half financial performance.

The company had hiked its selling prices, reduced promotional activities and initiated cost saving programmes, besides others, to deliver an improved second-half performance.

Headline earnings a share increased 3.4% to 119.9c during the year to June, while operating profit increased 5.4%, from R371.2-million in 2012, to R391.4-million in 2013.

Clover reported generating revenue of R8-billion for the year under review – a 10.7% increase on the R7.2-billion reported for the prior year – on the back of increased prices and higher volume growth.

“We are pleased with the results achieved in the past year and particularly with the second-half performance, which demonstrated the agility of our new structures and our ability to convince consumers of Clover’s value proposition,” said Vorster.

The group declared a dividend of 32c for the financial year.