Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

HY21 result impresses, Clover (ASX:CLV) share price up

The Clover Corporation Limited (ASX:CLV) share price is up 7% after the business reported its FY21 half-year result (HY21). 

The Clover Corporation Limited (ASX: CLV) share price is up 7% after the business reported its FY21 half-year result (HY21).

Why is the Clover share price going up?

The numbers reported by Clover weren’t exactly positive. Net sales revenue decreased by 21.7% to $29.4 million. Excluding the negative foreign currency exchange impacts, net sales revenue was $30.3 million.

Clover’s net profit after tax sank 45.8% to $2.5 million. However, excluding the Melody Dairy start-up costs and IP legal defence costs, it would have made an underlying net profit after tax of $3.3 million.

Why are things difficult?

Clover explained that it experienced tough trading conditions in the first half of FY21. The infant formula market has seen a shift in demand and the supply chain driven by COVID-19 restrictions and market conditions in China. Global infant formula manufacturers are adjusting their market response.

Even so, Clover revealed that it has retained and grown its customer base.

The daigou channel has caused an impact and there is minimal travel by Chinese and students which have slowed the ‘grey market’ importation of many products, including infant formula.

The local Chinese market has also become more competitive with local manufacturers competing on price and aggressive channel strategies.

Dividend

The Clover board decided to declare a dividend of 0.5 cents per share.

Outlook

Clover stated that the fundamentals of the business remain strong with opportunities for growth across markets and segments currently impacted by COVID-19. The global uncertainty is leading to a slow recovery in the infant formula market and Clover has forecast FY21 revenue to be in the range of $60 million to $70 million.

Is the Clover share price a buy opportunity?

This seems like the type of problem that’s affecting businesses like A2 Milk Company Ltd (ASX: A2M), Synlait Milk Ltd (ASX: SM1) and Bubs Australia Ltd (ASX: BUB).

At some point the infant formula sector could bounce back, which would benefit Clover (and the others).

The Clover share price is down a long way from where it was in the middle of 2020. It seems like an interesting business, but it’s not one I’m looking to add to my own portfolio right now because I’m not sure how big of an opportunity the business is.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content