Clover Corporation (CLV) H2 2024 earnings summary

Executive summary

• FY24 revenue was $62.2m, down from $79.9m in FY23, mainly due to reduced demand in the infant formula market, but aligned with guidance.

• Net profit after tax fell 76% to $1.5m compared to $6.2m in FY23.

• Second half saw revenue rebound to $34.9m, up 28% from 1H, with NPAT of $2.1m after a loss in 1H.

• Demand rebounded in the latter half, especially in China, New Zealand, and Asia, as infant formula customers moved from trials to commercialisation.

• Inventory reduced by 19.9% to $29.6m, and cash position strengthened to $12.2m.

Financial highlights

• EBITDA for FY24 was $4.0m, down from $10.0m in FY23.

• Earnings per share dropped to 0.9 cps from 3.7 cps year-over-year.

• Operating expenses decreased 6.6% to $12.9m due to lower headcount and reduced travel/marketing.

• Return on equity fell to 2.3% from 9.2% in FY23.

• Dividend declared: 0.75 cent per share, fully franked.

Outlook and guidance

• FY25 focus on building demand profile achieved in 2H FY24 and further diversification into nutraceuticals.

• Strategic priorities include integrating the Ecuador facility, optimizing Melody Dairies, and commercializing new products like CholineXcel and Premneo.

• Expansion of powdered Choline product offering to existing and new customers.

• Long-term projects like Gelphorm and Premneo targeted for growth.