A force to be reck­oned with

Finweek English Edition - - INVESTMENT - SI­MON BROWN

WE’VE LONG been a holder of Clover*. The long-term pic­ture here is likely to be a larger com­pany dis­tribut­ing a wide range of prod­ucts into thou­sands of stores across the coun­try along­side their dairy prod­ucts. The com­pany al­ready has cheese, fruit juice, and the an­nounce­ment that it is not re­new­ing its Danone SA agree­ment when it ex­pires, fur­ther adds to this strat­egy. Cur­rently, Clover sources in­puts and then dis­trib­utes a range of prod­ucts for Danone, mainly yo­ghurt. Come 2015, when the deal has ended, Clover will have its

RBA HOLD­INGS own branded yo­ghurt. The Nestlé wa­ter deal added to its prod­uct range last month.

The re­cent re­sults were de­cent but not fan­tas­tic as in­put costs hurt and Clover only just man­aged to pass on the in­creases to con­sumers, mean­ing its op­er­at­ing mar­gin slipped from 5.1% to 4.9%. But the re­sults showed that its strat­egy and in­ter­nal re­struc­tur­ing are start­ing to de­liver. We see Clover as a cold prod­uct Tiger Brands of the fu­ture.

*The writer holds shares in Clover.

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